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

text:
    Stanley Brown v. Maryland Casualty Company, et al
    5-4723
    442 S.W. 2d 187
    Opinion Delivered May 26, 1969
    [Rehearing denied July 14, 1969.]

      Accltioue & King for appellants.

      R. Hubert Mayes, Jr. for appellee (Maryland Cas.).

      Clark, Clark & Clark for appellee (Con-Ark.).
   John A. Fogleman, Justice.

The Housing Authority of Pike County, Arkansas, contracted with Plez Lewis & Son, Inc., for the construction of a housing project according to plans and specifications prepared by architect Stanley Brown. After Plez Lewis defaulted, the housing authority called upon Maryland Casualty Company, surety on the contractor’s performance bond, to complete the contract. Maryland contracted with Con-Ark Builders, Lie., to complete the construction in accordance with the original plans. Apparently, it was contemplated that a change would b.e made in the plans and specifications as to foundations, because mention of this was made in the contract between Maryland and Con-Ark. After Con-Ark. took over, “Change Order Gf-2” was added requiring the installation of 124 piles, a minimum of ten feet in length or a total of 1,240 lineal feet. Con-Ark’s proposal to Maryland had contained an item of $6,500 for this work plus $4.75 per foot in excess of 1,240 feet. Con-Ark subcontracted this work to Piling & Repairs, Inc., for $5,084 plus $3.85 for each additional lineal foot. After the piling work started,' R. W. Laird, the architect’s representative on the job site, instructed Piling & Repairs’ workmen to drill the pilings deeper than the originally specified ten feet. Accordingly, this resulted in an additional 1,268 lineal feet of drilling over the original specification of 1,240 lineal feet.

Piling & Repairs, who had been paid by Con-Ark for a portion of the overrun, brought suit against Con-Ark for the balance due on the overrun. Con-Ark admitted the overrun and cross-complained against Maryland Casualty Company on Lhe premise that should Con-Ark be liable to Piling & Repairs, Con-Ark should have judgment against Maryland. Maryland then cross-claimed against the housing authority and Stanley Brown and R. W. Laird seeking judgment against them, jointly and severally, for any amount for which it was held liable.

At the trial it was stipulated that Stanley Brown was the housing authority’s agent and that Laird was Brown’s agent.

The trial court entered judgment for Piling & Repairs against Con-Ark as prayed, for Con-Ark against Maryland Casualty Company as prayed, and for Maryland against the housing authority, Stanley Brown and R. W. Laird, jointly and severally, for anything Maryland might be required to pay to satisfy the judgment in favor of Con-Ark. Brown and Laird filed notice of appeal. Con-Ark gave notice of appeal from the judgment in favor of Piling & Repairs. The appeal by the housing authority was designated as a cross-appeal in the sense used in Ark. Stat. Ann. § 27-2106 (Repl. 1962), Brown v. Maryland Casualty Co., 245 Ark. 70, 431 S.W. 2d 258. Maryland also appealed.

Maryland contends that it is not liable to Con-Ark unless and until it is paid for the extra work by the housing authority and its architect. tinder the terms of the contract between Con-Ark and Maryland allowance of the amount to be paid by the owner was a condition precedent to payment from Maryland to Con-Ark. The pertinent contract portions are as follows:

“7. Maryland agrees to pay the Contractor, as full compensation for all liability assumed hereunder, the sum of $109,500.00, subject to additions and deductions residting from change orders or extras issued by the Owner, to be paid as follows:— a. The sum of $101,729.83, being the balance of the Contract price remaining under tlie said Contract between Lewis and the Owner, out of the estimate and retained percentages to be received by Maryland from the Owner periodically, as provided for in the Contract, between Lewis and the Owner, for work performed by the Contractor, and to be paid to the Contractor within five (5) days after receipt thereof by Maryland, such payment to be in like amounts as Maryland receives from the Owner.
b. The additional sum of $7,770.17 * * *
c. Within five (5) days after receipt by Maryland from the owner of any payment to it for extra work ordered, including but not limited to contemplated change in foundations, on or after the effective date of this AGREEMENT and performed by the Contractor, Maryland mil make payment of an amount equal to the amount received by Maryland from the Owner for the aforesaid extra toork.
d. Within five (5) days after the Owner notified Maryland in writing that the Contract has been completed and accepted and the Owner has paid the final estimate and retained percentage to Maryland, then Maryland will pay to the Contractor the balance due under this AGREEMENT, if any. It is distinctly understood and agreed by the parties hereto that the payments provided for hereunder are to be made only after Maryland receives from the Owner the estimate payments, payments for extras and changes, and retainages to be paid to Maryland by the Owner and Lewis. It is further understood- and agreed that the payments shall, in no event, exceed the sum of $109,500.00, subject to any additions or deductions provided, for hereunder. . Any change or increase in the amount of this AGREEMENT hereinafter provided for shall he paid to the Contractor only in such amount as is allotved therefor by the Owner, anything in this AGREEMENT to the contrary notwithstanding.
It is understood that the payments provided for as above are to be made only after Maryland receives from the Owner the estimate payments, the payments for extras and changes, and retainages to be paid Maryland by the Owner under the terms of its Contract with Lewis, provided, however, that should the Owner withhold any estimate payment, payment for extras, or retainage for a period of twenty (20) days beyond the time it would normally be paid because of any reason not the fault of the Contractor, then Maryland shall nevertheless make payment to the Contractor for any such estimate, extra, or retainage earned by the Contractor and without awaiting payment from the Owner, as provided for in subparagraphs a, b, and c; provided further, however, that should the Owner withhold any payment herein referred to for a period of twenty (20) days beyond the time it would normally be paid, for reasons not the fault of the Contractor, then Maryland shall have the right to cancel this AGREEMENT upon notice to the Contractor. In the event of such cancellation, the Contractor shall be entitled to payment from Maryland for all amounts earned by the Contractor, including retain-age under this AGREEMENT, up to the date of cancellation.” (Emphasis ours.)

It is obvious that all parties knew that this was an undertaking to complete a job on which the original contractor had defaulted. Con-Ark was Maryland’s subcontractor for the completion of the work. There is no reason -why the parties could not contract for this work on any terms they agreed upon. There is no reason wl\y the terms of the contract which both parties agreed to should not be enforced.

In Blair v. United States, 147 F. 2d 840 (8th Cir. 1945), there was a contract between a contractor and a subcontractor which contained provision's very similar to those in this case. A fixed completion date in the contract between the government and Blair, the general contractor, had been extended. By a later supplemental contract, this date was advanced to the original one, upon agreement of the government to reimburse Blair for additional costs resulting from the reduction of time on the basis of expenditures approved by the government’s contracting officer. Blair notified his subcontractors that they were committed to the original completion date, <£ 'with additional compensation as approved by the Government being granted you where applicable, in accordance with Article II of attached Supplemental Agreement. ’ ” In reversing a judgment in favor of the subcontractor, the court said:

"* * * The above, quoted letter discloses not a promise, by Blair to pay, but that additional compensation as approved by the government would be granted where applicable. This implied a promise that Blair would turn over funds if and when realized by allowance and payment by the government. As such payment has not been received by him and no claim is made that he has not diligently attempted to make collection, and it affirmatively appears that he has done so, defendant should not be held liable contrary to the terms of his agreement. * * * (Citations omitted.) We conclude that plaintiffs were not entitled to recover on account of the speed-up agreement though they may be entitled to such recovery dependent upon whether or not defendant Blair received additional compensation from the government on account of the adjustment in the date of the completion of the work under his contract.”

The rule stated there is applicable to this situation. There is no escape from the conclusion that, as to changes adding to the contract price, the liability was not ad-solute but conditional. While some of the clauses of the contract might be construed as only fixing a time for payment of an absolute liability, the provision of Section 7 d that any change or increase be paid to Con-Ark “only in such amount as allowed therefor Irg the Owner, anything in this AGREEMENT to the contrary notwithstanding” can only create a liability conditional upon approval of the change by the owner.

Language contained in Mascioni v. I. B. Miller, Inc., 261 N.Y. 1, 184 N.E. 473 (1933) is pertinent. In that case, the contractor agreed to pay a subcontractor 55 cents per cubic foot for erection of concrete walls. The promise to pay contained the proviso “Payments to be made as received by the Owner.” The court reversed a holding by the appellate division that this provision merely fixed the time of payment and did not create a condition precedent. That court said:

“A provision for the payment of an obligation upon the happening of an event does not become absolute until the happening of the event. Whether the defendant’s express promise to pay is construed as a promise to pay ‘if’ payment is made by the owner or ‘when’ such payment is made, ‘the result must be the same; since, if the event does not befall, or a time coincident with the happening of the event does not arrive, in neither case may performance be exacted.’ * * *
True, a debt with consequent obligation to pay may exist aside from any express promise to pay. Then a condition annexed to an express promise to pay the debt may render the promise to pay conditional without making the debt subject to the same condition. ‘It must be admitted, however, that a condition annexed to a promise to pay a debt will commonly, upon the true construction of the instrument in which it is contained, extend, to the debt itself. There is a difference also between a promise to pay a debt on a certain condition, and a proviso that the debt shall be payable only upon a certain condition; for the latter necessarily renders the debt itself conditional. ’ Langd'ell, Summary of the Law of Contracts, § 36. In this case, if there were no express promise to pay a stipulated price for stipulated work, such a promise would be implied. There is, however, an express promise to pay moneys ‘as received from the Owner,’ and the event upon which that promise would ripen into an absolute, immediate obligation has not occurred. From the express promise to pay upon the happening of an event, an inference may be drawn that the parties did not intend or impliedly agree that payment should be made even if the event does not occur.
In many cases, nevertheless, an inference that an express promise to pay a debt on a certain condition excludes an implication that the debt shall be paid, even though performance of the condition is impossible, would defeat the intention of the parties. The tests approved by the Law Institute in its Restatement of the Law of Contracts, § 295, are whether ‘ (a) a debt for performance rendered has already arisen and the condition relates only to the time when the. debt is to be discharged, or (b) existence of the condition is no material part of the exchange for the promiser’s performance, and the discharge of the promiser will operate as a forfeiture.’ In either case ‘impossibility that would discharge the duty to perform a promise excuses the performance of a condition.’
Here on its face the contract provides for a promise to perform in exchange for a promise to pay as payments are ‘received from the Owner.’ Performance by the plaintiff would inure directly to flie benefit of tbe defendant, because the defendant had a contract with the owner to perform tbe ■work for a stipulated price. Tbe defendant would not profit by the plaintiffs’ performance unless the owner paid the stipulated price. That was the defendant’s risk, but the defendant’s promise to pay the plaintiffs for stipulated work on condition that payment was received by the defendant shifted that risk to the plaintiffs, if tbe condition was a material part of the exchange of plaintiffs’ promise to perform for defendant’s promise to pay.”

The principle is succinctly stated in 17 Am. Jur. 2d, Contracts, § 339:

“There is a difference between a promise to pajr a debt on a certain condition, and a provision that the debt shall be payable only upon a certain condition, for the latter necessarily renders tbe debt itself conditional. Although a condition annexed to an express promise to pay a debt may render the promise to pay conditional without making the debt subject to the same condition, a condition annexed to a promise to. pay will commonly be construed to extend to the debt itself.”

It has been recognized and applied by this court as illustrated by the following language from Jacks v. Phillips County, 25 Ark. 64:

“The proposal made by Jacks to the county court, and which was accepted, was, that Jacks was to receive for his services one-half of the money collected off of the lands which he might ascertain to have been omitted in the late assessment of the county taxes; and this right to compensation depended upon the performance of his contract, by ascertaining the omitted lands and bringing them upon the assessor’s list, and that money had been received in payment of taxes on the lands so ascertained and assessed. Then, and not until then, would he have a right to claim of the county one-lialf of the money collected; because his contract was conditional, and his right to compensation depended upon his performance of his contract, and the collection of the money. ’ ’

The above stated principle is applicable to this case. Consequently the judgment against Maryland is reversed.

Inasmuch as the judgments in favor of Maryland and against Brown, Laird and the housing authority were made dependent upon the amount which was paid by Maryland on the judgment in favor of Con-Ark, those judgments must be reversed also, in spite of the fact that we could dismiss the appeal of the housing authority or affirm the judgment against it because of its failure to file a brief on cross-appeal. See Rule 10; Dunham v. Phillips, 154 Ark. 87, 241 S.W. 361; Day v. Langley, 202 Ark. 775, 152 S.W. 2d 308. These judgments were void as conditional judgments in any event. Bank of Commerce v. Goolsby, 129 Ark. 416, 196 S.W. 803; See also Brotherhood of Locomotive Firemen and Engineers v. Simmons, 190 Ark. 480, 79 S.W. 2d 419.

It is necessary that we consider the appeal by Brown and Laird, because, on a retrial, they might be held liable to Maryland for any amounts for which Maryland could not recover from housing authority because of any actions taken by them without authority from the principal. Under the evidence hereinafter set out and the finding of the trial court thereon, Laird could not be liable to Maryland. Its cross-complaint against him is dismissed.

The trial court found that Laird was Stanley Brown’s agent, that Stanley Brown was the housing authority’s agent, and that the agents had either the actual or apparent authority of the housing authority to require the additional piling, in spite of evidence that Laird had exceeded Ms authority. The trial court found that the actions of Laird had been ratified by Brown. There is substantial evidence to support this finding in the testimony of AY. S. Little, field engineer for Brown. Lillie stated that before the drilling was more than one-half completed he discovered that the drilling was beyond the depth specified in the change order. He reported this fact to Brown but did not stop the work. There was testimony by Kennedy, the construction superintendent for Con-Ark, that Air. Little also took part in ioiling him whether or not the holes drilled for piling were deep enough. It was Kennedy’s recollection that Little, came on the job about May 13 and remained for two or three days. He testified that Little was telling him to go to refusal during that time. Kennedy stated that Little was aware of the additional depth to which these drillings were being made. The authorities consistently hold that where an agent is duly constituted, names his principal, contracts in the principal’s name, and does not exceed his authority, the principal is responsible on the contract and not the agent. Neely v. State, 60 Ark. 66, 28 S.W. 800; Dale & Banks v. Donaldson Lbr. Co., 48 Ark. 188, 2 S.W. 703; McCarroll Agency Inc. v. Protectory For Boys, 197 Ark. 534, 124 S.W. 2d 816; Ormsby v. Kendall, 2 Ark. 338; Ogletree v. Smith, 176 Ark. 597, 600, 601, 3 S.W. 2d 683; Meier v. Hart, 143 Ark. 539, 541, 542, 220 S.W. 819; Ferguson v. McMahon, 52 Ark. 433, 12 S.W. 1070. A principal, knowing of the acts of his agent, or of facts putting him on notice thereof, who fails to object cannot be heard to deny the agency but will be held to have acquiesced in and ratified his acts. St. Louis-San Francisco Railway Co. v. Lee Wilson Co., 212 Ark. 474, 206 S.W. 2d 175; American Mortgage Co. v. Williams, 103 Ark. 484, 145 S.W. 234.

The authority of an architect as the owner’s agent is limited. He may not direct that the work be done in any manner other than set out in the plans and specifications, except as lie has been given authority to do so in the contract. Incorporated Town of Bono v. Universal Tank & Iron Works, 239 Ark. 924, 395 S.W. 2d 330. Since there is no evidence in the record to show Brown’s actual or apparent authority to bind housing authority or to show that the housing authority knew of Brown’s or Laird’s actions, we are unable to say whether Brown or Housing Authority, or either of them, is liable to Maryland. Housing Authority liability to Maryland is dependent. upon its contract with Maryland and its contract with the original contractor or upon the extent of (he architect’s actual or apparent authority. Since the record is deficient in these respects, we remand Maryland’s cross-complaint against Brown and the housing authority for a new trial.

The appeal by Con-Ark from the judgment against it in favor of Piling & Repairs is-without merit. There is nothing to indicate that the compensation of Piling & .Repairs depended upon recovery by Con-Ark from Maryland. The contract provided for a fixed compensation. The only contingency was the depth of the drilling for the piling for which Piling & Repairs was to be paid ‡3.85 for each additional foot. There was evidence that the President of Con-Ark approved the additional drilling by Piling & Repairs anct assured them of payment for the additional footing. That judgment is affirmed.

Remanded for further proceedings consistent with this opinion.

Hoot, J., not participating.

George Rose Smith and Byrd, JJ., dissent.

Conley Bybd, Justice.

In dissenting I wish to point out that the majority opinion mistakenly classifies the contract between Con-Ark and Maryland Casualty Co. as a conditional liability rather than an absolute liability. In so classifying the contract as a conditional liability it erroneously describes the contract liere involved as being similar to the one in Blair v. United States, 147 Fed. 2d 840 (8th Cir. 1945).

The record here shows that Con-Ark had no contract with the Housing Authority. Con-Ark’s only contract was with Maryland Casualty Company. The majority opinion quotes a portion of the original contract between Con-Ark and Maryland with respect to payment, but since it omits what I consider an essential part of the contract I am setting forth the portion quoted in the original contract together with that succeeding1 portion omitted from paragraph no. 7 of the contract.

“c. Within five (5) days after receipt by Maryland from the owner of any payment to it for extra work ordered, including but not limited to contemplated change in foundations, on or after the effective date of this AGREEMENT and performed by the Contractor, Maryland will make payment of an amount equal to the amount received by Maryland from the Oioner for the aforesaid extra work.
“d. Within five (5) daj^s after the Owner notifies Maryland in writing that the Contract has been completed and accepted and the Owner has paid the final estimate and retained percentage to Maryland, then Maryland will pay to Contractor the balance due under this AGREEMENT, if any. It is distinctly understood and agreed by the parties hereto that the payments provided for hereunder are to be made only after Maryland receives from the Owner the estimate payments, payments for extras and changes, and retainages to be paid to Maryland by the Owner under the terms of the Contract between the Owner and Lewis. It is further understood and agreed that the payments shall, in no event, exceed the sum of $109,500.00, subject to any additions or deductions provided for hereunder. Any change or increase in the amount of this AGREEMENT hereinafter provided for shall he paid to the Contractor only in such amount as is allowed therefor by the Owner, anything in this AGREEMENT to the contrary notwithstanding.
“It is understood that the payments provided for as above are to be made only after Maryland receives from the Owner the estimate payments, the payments for extras and changes, and retainages to be paid Maryland by the Owner under the terms of its Contract with Lewis, provided, hotoever, that should the Otvner withhold any estimate payment, payment for extras, or retainage for a period of twenty (20) days beyond the time it would normally be paid because of any reason not the fault of the Contractor, then Maryland shall nevertheless make payment to the Contractor for any such estimate, extra, or retainage earned: by the Contractor and without awaiting payment from the Otvner, as provided for in subparagraphs a, b, and c; provided further, however, that should the Owner withhold any payment herein referred to for a period of twenty (20) days beyond the time it would normally be paid, for reasons not the fault of the Contractor, then Maryland shall have the right to cancel this AGREEMENT upon notice to the Contractor. In the event of such cancellation, the Contractor shall be entitled to payment from Maryland for all amounts earned by the Contractor, including retainage under this AGREEMENT, up to the date of the cancellation.

The testimony of Mr. Charles Nabholz was that the specification upon which the original contract was drawn made no provisions for any pilings to be placed as foundation for the structures to bo built on. He said that after they made the original agreement to complete the project, a new order came out to put in 1240 ft. of pilings and that they submitted to Maryland Casualty (to. the following bid:

“Maryland Casualty Company
c/o Edward Corring’ton
325 "Waldron Building
Little Rock, Arkansas
“Re: Grlenwood
Ark Project 45-3
“"We propose to furnish labor and material to install concrete piles as per drawings by Stanley Brown sheets A-2, A-4, A-6, A-7 revised showing concrete piles for the sum of $6,500.00 to be added to our base bid of $109,500.00 on the above referred job.
“This price is based on 124 piles 10’ deep. In event (hero is an overran the price will lie 4.75 per ft. In the event there is a underrun the credit will be at 4.00 per ft.
‘ ‘ R esp ectfullv submitted,
“(¡liarles Nabholz, President
Con-Ark Builders, Inc.”

At page 168 of the record Mr. Nabholz testified as follows :

“Q. You had authorization from Maryland for payment on overran in April of ’65, is that correct?
“A. That’s right.”

That the contract in Blair v. United States, 147 Fed. 2d 840 (8th Cir. 1945), is not similar to the contract here involved can readily be demonstrated by quoting the full paragraph from which the majority opinion takes a partial quote on page 3. The full paragraph in the Blair opinion is as follows:

‘ ‘ There is no evidence of any verbal contract by which Blair agreed to pay plaintiffs for extra expense incurred as a result of the “Speed-up Agreement.” The above quoted letter discloses not a promise by Blair to pay, but that additional compensation as approved by.the government would be granted where applicable. This implied a promise that Blair would turn over funds if and when realized by allowance and payment by the government. As such payment has not been received by him and no claim is made that he has not diligently attempted to make collection, and it affirmatively appears that lie has done so, defendant should not be held liable contrary to the terms of his agreement. Thomson v. Leak, 135 Cal. App. 534, 27 P. 2d 795; Wheat v. Platte City Ben. Assessment Special Road List., 227 Mo. App. 869, 59 S.W. 2d 88; Cowan v. Browne, 63 Mont. 82, 206 P. 432. We conclude that plaintiffs were not entitled to recover on account of the speedup agreement though they may be entitled to such recovery dependent upon whether or not defendant Blair received additional compensation from the government on account of the adjustment in the date of the completion of the work under his contract.”

In 17 Am. Jur. 2d, Contracts, § 339, the promise to pay upon a specified event or condition is discussed as follows:

“§ 339. Promise to pay upon specified event, condition, or contingency; payment out of particular fund.
“Where an instrument purports to be payable upon the happening of a certain event, the question which must precede any inquiry as to the time of pay moni, assuming that the event has not happened, is whether the instrument imports an absolute liability. If the event is one that is CERTAIN to happen, the mere promise to pay may import such an absolute liability. If, however, the event is one WHOLLY or PARTIALLY within the promisor’s control and therefore not certain to happen, the absolute character of the liability cannot be inferred from the mere promise, but- must be sought in the other terms of the instrument or in .extrinic circumstances. Thus, the mere fact that the party promised to pay a certain amount when he sold a piece of land is not conclusive of the fact that there was an absolute liability.
‘ ‘ The real significance of the provision that the instrument is payable upon the happening of an event that is wholly or partially within the control of the promisor is apparent after it has been determined whether the debt is an absolute one. If the instrument, read in the light of the surrounding circumstances, shows that the debt is an absolute one, it is reasonable to suppose that the parties intended that a reasonable effort should be made to cause the event to happen within a reasonable time. Some courts declare broadly that where payment is to be made upon a condition under the control of the promisor, an action may be brought within a reasonable time. Moreover, where a debt is due and the happening of a future event is fixed on merely as a convenient time for payment, but the future event does not happen as contemplated, the law implies a promise to pay within a reasonable time. Thus, to an agreement to pay as soon as a crop can be sold or the money raised from any other source the law annexes as an incident that one or the other shall be done within a reasonable time and that the sum admitted to be due shall be paid accordingly. In such a case payment is not conditional to the extent of depending wholly and finally on the alternatives mentioned, but the stipulation merely secures to the debtor a reasonable amount of time within which to procure in one mode or another the means necessary to meet the liability. However, it appears to be the general rule that a promise to-pay out of a particular fund does not create an absolute liability, in the absence of facts or circumstances showing the contrary. Accordingly, where a contract requires payment from a particular fund, it cannot be said that the debt is payable in a reasonable time where the source fails without the fault of the promisor. Nevertheless, where the promise is to pay out of a fund to be realized in a certain way, there is an implied obligation to use reasonable diligence in performing the act upon which payment is contingent. In default of such diligence, payment becomes due without performance of the condition. - -
“In some instances the money is made payable within a specified time after the happening of a certain event, such as the return of a specified vessel, which it is assumed will certainly occur. The fact that the vessel is lost at sea does not prevent the money from being payable within the time stipulated after the expiration of the period usually required for the return trip of the vessel. If a party puts it out of his power to cause the event to happen,• his liability accrues at once.
“There is a difference between a promise to pay a debt on a certain condition, and a provision that the debt shall be payable only upon a certain condition, for the latter necessarily renders the debt itself conditional. Although a condition annexed to an express promise to pay a debt may render the promise to pay conditional without making the debt subject to the same condition,' a condition annexed to a promise to pay will commonly be construed to extend to the debt itself.”

The complaint of Piling and Repairs was filed in the Circuit Court on Dec. 11,1965, the case was tried on Dec. 4,1967, and the judgment was filed on Jan. 2,1968. Thus, under the terms of the contract between Con-Ark and Maryland, it is obvious that the owner has withheld the payment of the extras in excess of twenty (20) days beyond the time it would normally be paid. For these reasons I contend that Maryland’s liability to Con-Ark is an absolute liability and that having performed the work in April of ’65, Con-Ark was certainly entitled to receive its pay in Jan. of ’68. In Maryland Casualty Company’s pleading on page 32 of the record it acknowledges that the additional work has been accepted by the Housing Authority.

FURTHERMORE, I would affirm the judgment in tofo including the judgment against Stanley Brown and the Housing Authority. I would affirm the judgment against the Housing Authority because it has waived any errors with respect to the judgment against it by 'failing to file briefs here within the time allowed. The record at pages 166 and 167 shows that the bid price submitted to the Housing Authority for the additional work contained no provision for the overage and underage as was contained in Piling and Repairs contract. Based on this contract, the Housing Authority relied upon a provision in its contract that no contractual changes should be binding on the Housing Authority unless provided for in writing prior to making such changes. In its complaint, Maryland Casualty Co. in paragraph 3 pleaded as follows:

‘ ‘ Maryland Casualty Company denies that it is liable to Plaintiff or Third Party Plaintiff in any amount, but states that should it be found liable to Third Party Plaintiff in any amount for the cost of additional pilings in excess of 1,240 lineal feet or an amount in excess of $6,500.00, that it should have and recover such sum from Housing Authority of Pike County, Arkansas; Stanley Brown, Architect, and R. Y\T. Laird, jointly and severally.”

Recognizing that there was a contention that. Stanley Brown did have authority to authorize the additional work, Maryland Casualty Co. pleads in paragraph 6 of the complaint as follows:

“In the alternative, should Maryland Casualty Company be required to pay Third Party Plaintiff any sums in excess of $6,500.00 for said piling work and should it be determined that the Plousing Authority of Pike County, Arkansas is not liable to Maryland Casualty Company for such sums, Maryland Casualty Company should have and recover judgment over and against and be fully reimbursed and indemnified for such sums by Stanley Brown, Architect, and his agent, servant and employee, R. W. 1.aird, for reason that said work was performed under their specific instructions and directions, both oral and written, at a time and place when they had actual and apparent authority to authorize same, or held themselves out to have such authority. ’ ’

At the trial Stanley Brown, Architect, called the manager of his Little Rock Office, Mr. George Dowling, who testified that Laird, the man who authorized the extra piling, did not have the actual authority to authorize any excess drillings. He further stated that Laird had told him he did not take such authority. In addition to George Dowling, Stanley Brown called his structural engineer Ronnie Snowden, who testified that the extra piling work done was not called for by their plans and specifications and that from the standpoint of utility the extra piling added nothing to the buildings.

My understanding of the law is set forth in Ormsby & Abraham Hite v. Kendall, 2 Ark. 338, 344 (1839), as follows:

! ‘... The principle is well settled, that if a person undertakes to contract as an agent for an individual or corporation, and contracts in a manner which is not legally binding upon his principal, he is personally responsible. White v. Skinner, 13 J. R. 307; Randall v. Van Vechten, 19 J. R. 60; Taft v. Brewster, 9 J. R. 334; Tippetts v. Walker, 4 Mass. R. 596; and Mott v. Hicks, 1 Cowen 536. The agent, when sued upon a contract, can only exonerate himself from responsibility "by showing his authority to bind those for whom he is undertaking to act. It is not for the plaintiff to show that he has not authority. The application of this principle to the case now under consideration clearly proves that Kendall'is personally responsible, and not the steamboat owners. He was bound to show that he had authority to contract for the steamer Teeumseh and owners, and tb ’prove this affirmatively, and in failing so to do, he becomes himself personally liable upon his undertaking"...”

The architect, Stanley Brown, acting through his agent Laird, authorized the extra work resulting in this litigation. If I correctly read the Ormsby case, the architect became personally responsible unless he showed that he had authority to contract for the extra work and that the burden of proof was on him to do so. Not only did lie not do so here but he affirmatively stated that he had no such authority.

Therefore I would affirm the judgment of Con-Ark against Maryland on the basis that it was an absolute liability which was due at the time of trial. I would also affirm Maryland Casualty Company’s judgment against the Housing Authority by virtue of the Housing Authority not having filed its brief within the time allowed by law. I would also affirm the judgment against the architect because he stated that his agent had no authority from the Housing Authority to authorize the extra work. I am at a loss to see how the architect could take one position in the trial court and a different position on appeal.

For the reasons stated I respectfully dissent.

George Bose Smith, J., joins in this dissent.

      Testimony indicated that drilling started May 10 and was completed on May 19.


source: Caselaw Access Project

author: J. Fred Jones, Justice.

license: Public Domain

text:
    Home Insurance Co. v. Allied Telephone Co., et al
    5-4897
    442 S.W. 2d 211
    Opinion Delivered May 26, 1969
    [Rehearing denied July 14, 1969.]

      Terral, Rawlings, Matthews & Turtle, for appellant.

      McMillan, Teague, Bramlmll & Davis for appellees.
   J. Fred Jones, Justice.

Olin S. Payte sued Allied Telephone Company in the Pike County Circuit Court for property damages growing out of an automobile collision. Olin H Payte died during the pendency of the action and Home Insurance Company, who had paid the collision loss to Payte under tin insurance contract it had with him, was substituted as party plaintiff under -its subrogation agreement with Payte. A jury trial resulted in a judgment for Allied. Home Insurance has appealed and relies on the following points for reversal :

“That the Court erred in allowing the defendant to testify to self-serving, hearsay statements made by the driver of plaintiff’s motor vehicle, a bailee.
That the Court erred in refusing to give the plaintiff’s instruction on the Arkansas law pertaining to the imputation of negligence from bailee to bailor.”

The recorded facts are as follows: Johnny Payte was the son of Olin Payte, and on March 9,1967, between 9:30 and 10:00 a.m., Johnny Payte was driving an automobile registered in his father’s name north on a county road in Pike County and Johnny’s wife was riding as a passenger in the front seat with him. As he drove over a “rise” in the highway, a truck belonging to appellee and being driven by its employee, Richard Ray, was traveling south meeting the Payte automobile. According to the uncontradicted testimony of the investigating officer, the Payte vehicle skidded fifty-four feet and the appellee’s vehicle skidded ten foot, and the two vehicles collided with the point of impact being about one foot and four inches east of the center line, and on Payte’s side of the road. The traveled portion of the gravel road was sixteen feet and six inches wide at this point. The Payte automobile was damaged in the amount of $925.00. The police officer testified that appellee’s truck was over the center line of the highway and that from his investigation at the scene of the collision, he was of the opinion that the Payte automobile was traveling too fast for the conditions of the highway.

Mrs. Payte testified that as she and her husband came over a rise in the highway, the appellee’s vehicle was in the center of the road “a little on our'side.” She testified that her husband was driving about thirty miles per hour. Mrs. Payte was asked and answered questions as follows:

“Q. Where were you going at the time of the collision?
A. We liad just gotten off from school, and we were going to my mother’s — to my mother-in-law’s house.
* # #
C- Who was the registered owner of this car at the time of the collision?
A. Olin S. Payte.
Q. Who is he?
A. He’s my father-in-law.
Q. Were you on an errand for him?
A. No, sir. .
Q. You were on your own personal business?
A. Yes, sir.”

The above questions and answers by Mrs. Payte are the only evidence in the record pertaining .to the agency relationship between the owner and the driver of the automobile. If the pronoun “you” in the questions was used or understood in the singular, it shed no light at all on the agency relationship between the driver and the owner. If the question was asked and understood in the plural, the answers could have been interpreted to say that Mrs. Payte and her husband, who was driving an automobile registered in his father’s name, had just gotten off from school at 9:30 in the morning and had started to Mrs. Payte’s mother-in-law’s house on their own personal business and not on an errand for her husband’s father. Be that as it may, the whole case was tried on the theory that Johnny Payte was a permissive bailee of the automobile and there was no evidence to the contrary.

One subpoena was issued for Trooper Rex Martin. Johnny Payte and Mavis Payte. It was served on Mr. Martin and Mrs. Payte, but was not served on Johnny Payte and he did not testify at the trial. Mr. Ray, the driver of appellee’s truck, was permitted to testify as to statements made to him by Johnny Pa}de following the collision. This testimony was offered and admitted as admissions against interest and it was objected to because Johnny Payte was not a party to the lawsuit and as being self-serving if he were. What the objection actually amounted to was that it was inadmissible, as hearsay evidence. The testimony of Mr. Ray as to what Johnny Payte said to him and the objections made to it are copied from the record as follows:

“Q. T should have asked you one other question. Mr. Ray, since the accident on more than [one] occasion have you had conversation with Mr. Payte, the driver of that automobile?
mr. osterloh:
I am going to object to any conversation he had with Mr. Payte, the driver. He isn’t a party to this lawsuit and has never been.
mr. steel;
He was the driver of the car, and any admissions made against his interest, I think, are certainly admissible.
mr. osterloh;
And they are self-serving, Your Honor.
the court;
Overruled. You may answer.
Q. (Con’d, by Mr. Steel) You may answer the question that I am about to ask — what conversation you had with him as to whose fault it was.
A. "Well, right after the accident we went to the hospital, and I saw him in the hospital. He came over and asked how I was, if I was -doing all right, and he said something about it -looked like we were at the right place at the wrong time.
Q. Now, since that time, were you working along the road, and did he stop and talk to you?
A. Yes, sir.
Q. What did he tell you then?
A. I don’t remember the exact words, but it was just like, in so many words he said it wa.s something that couldn’t be helped.
mr. osterloh:
I object, Your Honor.
the court:
Yes, sir. You will have to repeat the conversation as you remember it, not what you think it was.
Q. (Con’d, by Mr. Steel) Do. you remember the exact words he used, Mr. Bay?
A. He said, ‘It looks like it was something that couldn’t be helped.’ ”

"We are of the opinion that the trial court should not have admitted the statement as an admission against interest in the absence of evidence that Johnny Payte had actual, or implied, authority to make such admission. The record reflects, however, that Johnny Payte was a bailee of the automobile at the time of the collision and as such would have been liable to the owner for any damage to the vehicle caused by his own negligence.

In determining the admissibility of statements into evidence as exceptions to the hearsay rule, there is a distinction between declarations against interest and admissions against interest. In vol. 2, Ark. L. Rev., pages 26-52 (1947-48) appears an article by Dr. Robert A. Leflar entitled “Theory of Evidential Admissibility — Statements Made Out of Court,” and under subheading “Declarations Against Interest” at page 41, Dr. Leñar states:

“Another exception dating from the early days of the Hearsay Rule is that which admits declarations made against the interest of the declarant. It is well settled that to be admissible under this exception the statement must have been against the declarant’s interest when he made it.”

And under subheading “Admissions by a Party or One in Privity” Dr. Leñar says:

“When it is shown that a party has made a statement inconsistent with the position taken by bim in the present suit, the statement so made is admissible in evidence as an ‘admission.’ It is substantive evidence, both in civil and criminal cases, of the facts admitted in the statement.”

And then on page 43 Dr. Leñar continues:

“It is easy to confuse the admission rule with that admitting declarations against interest. Many extrajudicial statements might be admitted in evidence equally under either rule. For example, a statement made b}7 a person to or through whom a party traces his present interest is admissible against that party as the admission of one in privity with him, and the same statement would frequently bo a declaration against the interest of the one who made it. [citing Rotan v. Nichols, 22 Ark. 244 (1860); Peters v. Priest, 134 Ark. 161, 203 S.W. 1042 (1919); Jefferson v. Pouter, 150 Ark. 55, 233 S.W. 804 (1921)]. There are differences, however. A declaration against the interest of the one who made it is always admissible, regardless of who he is, but for a statement to be admissible as an admission it must have been made by a party to the litigation or his authorized agent, or by one having identity or privity of interest in the matter in respect to which the statement was made. [citing 4 Wigmore, Evidence, secs. 1076-87 (3rd ed., 1940)]. And for a statement to be admissible as a declaration against interest, the declarant must be dead or at least unavailable, but admissions by parties, their agents and privies are admissible in evidence even though the declarant be physically available, even to the extent of being personally in the courtroom, as is often the case. Likewise, the admissions of an agent, made within the scope of his authority to speak for his principal, are admissible against the principal, even though they are not declarations against the personal interest of the declarant himself. They are admissible as admissions, but not as declarations against interest.” (Emphasis supplied.)

See also Wilkins v. Enterprise TV, Inc., 231 Ark. 958, 333 S.W. 2d 718.

'We conclude, therefore, in view of young Payte’s potential liability, that any statements made by him absolving another party of fault for the damage inflicted, could not be said to be self-serving and such statements were admissible as declarations against interest if Johnny Payte was not available as a -witness. The burden was on the appellee to show that Payte was not available, but a specific objection to the introduction of testimony because of failure to lay the proper foundation must be made before it can be said that admission of the testimony was error. Smith v. State, 243 Ark. 12, 418 S.W. 2d 627. The reason for this rule is that otherwise the .'court is not apprised of the deficiency and the adverse party is not given an opportunity to supply it. "We conclude, therefore, that the admission of the declarations of Johnny Payte did not constitute error.

The appellant’s proposed instruction does not appear in the record as such, but in chambers the appellant’s attorney made the following statement:

“My proposed instruction reads that ‘any negligence on the part of the defendant entitles the plaintiff to recover one-hundred per cent of whatever ''damages he suffered.’ Now, the Judge has refused to give this, and I would like to object because this leaves me without an instruction as to the law of bailments insofar as negligence is concerned — the imputation of negligence from bailee to bailor, and the law of Arkansas states that the negligence is not imputable.”

The trial court did not err in refusing to give this instruction. Negligence is not compensable in damages unless the damage is caused by the negligence, or the negligence is a proximate cause of the damage. The trial court did give instruction No. 4, as follows:

“In this case, the Home Insurance Company claims damages from Allied Telephone Company, and has the burden of proving each of these essential propositions:
First, that it has sustained damages. Second, that Richard Ray was negligent. And third, that such negligence was a proximate cause of the damage to the Payte vehicle.
If you find from the evidence in this ease that each of these propositions has been proved, then your verdict should be for the Home Insurance Company; but if, on the other hand, you find from the evidence that any of these propositions has not been proved, then your verdict should be for Allied Telephone Company.”

The judgment is affirmed.

Byrd, J., dissents.


text:
    H. T. Brady v. The City of Springdale, Arkansas, a Municipal Corporation
    5-4906
    441 S.W. 2d 81
    Opinion Delivered May 26, 1969

      Leiois D. Jones for appellant.

      Crouch, Blair, Cypert & Waters for appellee.
   J. Fred Jones, Justice.

This is an appeal by the landowner from a judgment of the Washington County Circuit Court denying his motion for a new trial in a condemnation case. The City of Springdale, through eminent domain, condemned a construction easement 50 feet wide and a permanent easement 15 feet wide for a sewer line across ten acres of the appellant’s tract of land containing 114 acres. By answer and counterclaim the appellant alleged damages in the amount of $25,000 for the taking of the easement,- and $20,000 further damage in diminished value of the remaining land because of water and air pollution and noxious odors arising from a sewage disposal plant adjacent to appellant’s property. The appellant also alleged damage in the amount of $5,000 for breach of contract in connection with fencing, paving and preservation of a spring in consideration for the grant of the easement.

A jury trial insulted in a judgment for the appellant landowner in the amount of $750 and upon appeal to this court from a judgment denying a motion for a new trial, the appellant relies on the following points for reversal:

“The court erred in overruling defendant’s motion for a new trial for the reason that the verdict was clearly against the preponderance of the evidence.
The jury’s verdict as to the damages was clearly inadequate and should be set aside with a new trial ordered.”

Botli of the appellant’s points were included in his motion for a new trial based upon his contention that the verdict was against the preponderance of the evidence. In the case of Taylor v. Grant Lumber Co., 94 Ark. 566, 127 S.W. 962, this court said:

“Trial courts have large discretion in the matter of granting new trials, especially upon the weight of the evidence, and this court will not interfere with such discretion unless it be made to appear that it was improvidently exercised.”

The reason for the rule is stated in Blackwood v. Eads, 98 Ark. 304, 135 S.W. 922, wherein this court said:

“Where there is decided conflict in the evidence, this court will leave the question of determining the preponderance with the trial court, and will not disturb his ruling in either sustaining a motion for new trial or overruling same. * * * The witnesses give their testimony under the eye and within the hearing of the trial judge. His opportunities for passing upon the weight of the evidence are far superior to those of this court. Therefore his judgment in ordering a new trial will not be interfered with unless his discretion has been manifestly abused.”

The only question before us on this appeal is whether the trial court abused his discretion in refusing to grant a new trial, and in answering that question, we do not consider preponderance of the evidence in any case. Where the motion is denied, we only consider the legal sufficiency of the evidence to support the jury verdict, and if there is any substantial evidence to support the jury verdict, we do not disturb the trial court’s action in denying a motion for a new trial. Price-Snapp-Jones Co. v. Brown, 184 Ark. 1143, 45 S.W. 2d 517; Chaney v. Missouri Pacific Railroad Co., 167 Ark. 172, 267 S.W. 564. Mueller v. Coffman, 132 Ark. 45, 200 S.W. 136.

So tlie question here boils clown to whether there was any substantial evidence to support the jury verdict. The appellant, Brady, testified that his entire farm consists of 114 acres; that prior to the present taking there was an underground sewer over the same area. Much of Brady’s testimony concerned a breach of contract he alleged in his counterclaim. The contract provided for payment of $3,500 for the easement, and for the reseeding of the damaged surface area. It also provided for the removal of rocks and other debris and for the erection of some fence. The appellee also agreed to build and surface a designated access road into appellant’s property and to install some tile in a spring on the property. In proof of his damages on the alleged breach of contract, the appellant testified that it would cost $200 to reseed the easement area; that it would cost $200 to remove the rock and debris left by the operation and he estimated the before and after value of his entire farm as a result of the destruction of his spring, the taking of the easement, and the offensive odors emanating from the sewage disposal plant at $100,000 before the taking and $55,000 after the taking.

Bale Killian, a real estate broker, relying on his general knowledge and experience in the sale of real estate, and basing his opinion on the area taken and offensive odors emanating from the sewage disposal plant, estimated the value of the entire track of land at $70,000 before the construction of the sewer line and disposal plant, and at $50,000 after the facilities were installed, lie testified that there was an offensive odor from the sewage disposal plant when he was on the property but that his knowledge as to odor prior to the construction of the plant in 1964, would be hearsay.

Candida Crane testified that she works for the appellant and lives about four miles west of the property involved. She testified that she had detected odors from the sewage disposal plant while she was on the appellant’s property mid that the odor was detected at her home four miles away. She testified that the odor was worse at some times than it was at other times.

King "Wheeler, a real estate dealer, testified that he had been familiar with the property since 1943. He testified that its highest and best use prior to 1964 ■would have been for a gentlemen’s estate or a boy’s camp, but since the construction of the sewage facility across the land, its best use would be for grazing. He placed the before and after value at $74,900 prior to 1964 and $51,-866 after the facilities were installed. He testified that the odor from the disposal plant had been apparent on appellant’s property since 1964, but not before that date.

M rs. Harry AVobb testified that she had carried mail to and by the appellant’s property for a number of years and that the odor from the sewage disposal plant had been noticeable during that period of time. She testified that it is possible that the odor may be less now than it was in 1958, but she doesn’t think so.

Clifford Houston testified that his farm adjoins the appellant’s farm and that he started noticing the odor from the sewage disposal in September or October of 1967. He testified that the odor was worse in these fall months. He had lived on his farm since 1948.

Mr. Dave Taylor testified that he was an inspector for the sewer and water department of Springdale and helped install the plant. He testified that prior to 1964 the sewage was partially treated at another location, and that the treatment was completed at the present location in older and smaller facilities. He testified that the partially treated sewage had higher odor producing content. than does the raw sewage now being treated.

L. M. Goodwin, a consulting engineer who designed the disposal plant, testified that when the new plant was first installed it produced considerable trouble from offensive odors, but that in 19G6 additional equipment was installed and that there had been no significant odor emanating from the plant since the fall of 1966. He testified that he had been in the vicinity of appellant’s property many times since 1966 and was unable to detect any significant odor from the plant.

Case}'- Forbes, superintendent of water works and sewers for the appellee, testified that a serious odor problem did develop in 1966, and that this problem had been eliminated by the installation of new odor eliminating equipment which has worked very satisfactorily. He testified that there is no significant odor in connection with the plant at the present time and that the plant does not emit an odor since the new equipment was installed in 1966.

O. J. Snow, a real estate broker and appraiser, testified that in his opinion the before value of the property was $75,750 and the after value was $75,000. He testified that he visited the plant and also the appellant’s property; that he detected some odor at the plant but none at all on the appellant’s property.

The jury not only saw the witnesses and heard them testify in this case, the jury went onto the premises and viewed the alleged damage. We may reasonably assume that the jury also sampled the air over appellant’s land for offensive odors. The preponderance and weight of evidence is for a jury to consider in reaching its verdict and is for the trial court to consider when the verdict is questioned as being against the preponderance of the evidence. When a circuit court judgment is questioned on direct appeal to this court, we examine the record for any substantial evidence to support the judgment, or the verdict upon which it is rendered, and we can do no more than that in determining whether the trial court abused its discretion in overruling a motion for a new trial on the ground that the verdict is against the preponderance of the evidence.

The alleged damages for breach of contract were apparently abandoned by the appellant in favor of the other damages he alleged. No jury instruction on breach of contract was given by the trial court nor requested by the appellant. The appellant relied most heavily on the difference in the market value of his land before and after the easement was taken and the present sewage disposal plant was constructed and placed in operation in .1964.

Aside from the approximate one-third acre in the easement actually taken, the appellant’s only other alleged damage to which the evidence was directed, pertained to reduction in the value of his land because of destruction of a spring on the property and air pollution over the property consisting of offensive odors from the appellee’s sewage disposal plant. The evidence on these two items was in substantial conflict. The conflict in the evidence as to the destruction of the spring ranged all the way from a clear year-round running spring which was covered and destroyed, as testified to by the appellant, to no spring at all, but a damp place in wet weather where a tree was pushed out of the ground and a tile pipe inserted, as testified to by Johnnie Jones. The evidence pertaining to air pollution ranged all the way fi^om constant and unbearable odor, as testified to by the appellant, to no odor at all as testified to by Messrs. Forbes and Snow.

There was substantial evidence to support the jury verdict in this case and we are unable to say that the trial court abused his discretion in refusing to grant the appellant’s motion for a new trial.

Affirmed.


author: ( 'onley Byre, Justice.

text:
    J. B. Council, et ux v. Lewis Clark, et al
    5-4888
    441 S.W. 2d 472
    Opinion Delivered May 26, 1969

      Jack Yales for appellants.

      R. IT. “Buddy” Hixon for appellee (Wright).

      Jela Taylor for appellees (Clark)
   ( 'onley Byre, Justice.

This is a boundary line dispute. The record shows that appellants J. B. and Nina Council at one time owned the W% SW3,4, Sec. 21, T. 8 N., R. 27 W. On February 11, 1947, appellants sold to Millard Wright a portion of the land by the following description: “Part of the West Half of the Southwest Quarter of Section 21, Township 8 North, Range 27 West, lying South of Hurricane Creek and containing in all 40 acres, more or less.”

Within 10 to 60 days after the conveyance, a fence was constructed along the top of the south bank of Hurricane Creek. Mi’. Council testified that it was constructed as a division or boundary fence. Mr. WHight denied that the fence was to be a division fence on the property line, and said that Mr. Council was originally to assist in building the fence and that the plan was for Council to build half-way down the north bank and Wright half-way up the south bank with a water gate to be placed across the creek to connect the two fences. Wrighi denies that Council furnished any of the cost of the original fence; however, Council insists that he did participate in the cost of construction. In 1959 Millard Wright conveyed the lauds under the same description to appellees Lewis Clark and Mrs. Lewis Clark reserving, however, one half of the mineral rights,

hi r. Clark testified that after he purchased the property from Wright, Mr. Council attempted to buy the property from him and that after he declined to sell to Council, Council suggested that they should straighten the deed up. On cross examination Council admitted that he had never told appellee Clark that he -was claiming the laud north of the. fence until shortly before April 1963.

Other testimony shows that Council cleaned up and cleared the north hank of the creek when the Soil Conservation Service did some drainage work but that because of appellee Wright’s objections, nothing was done to the south hank. It is stipulated that Hurricane Creek is nonnavigable.

The trial court found that the fence erected by Council and Wright in 1947 was a fence of “convenience” rather than a boundary fence. From a decree determining that the boundary line between the parties was the thread of Hurricane Creek, appellants appeal and rely upon the following points:

“1. That the deeds between the parties hereto show on their face that the grantees were only to receive that portion of real estate south of Hurricane Creek, 40 acres more or less. That the survey ordered by the Chancellor indicates that each party did receive this amount using the fence as a boundary line.
2. The portion of the Court’s Decree in which he relates that the fence was not the boundary lino is erroneous in that the fence was built by agreement as the boundary line between the parties.
3. That the fence had been in place since 1947 and no one at any time ever questioned the fact that the fence was the boundary line, but in fact helped repair and rebuild said fence from time to time over some 20-year period of time.”

POINT 1: We agree with the trial court that under the description of the deed, title extended to the middle of the stream of Hurricane Creek. See Gill v. Hedgecock, 207 Ark. 1079, 184 S.W. 2d 262 (1944).

POINT 2: There was conflict in the testimony between Council and Wright as to whether the fence was an agreed boundary. The burden of proof was on appellants to show that the parties agreed on a boundary other than that described in the deed. Based upon the conflict in testimony between the parties we are not in a position to say the Chancellor erred in finding that the fence did not constitute an agreed boundary line.

POINT 3. Neither do we find any merit in appellants’ argument that the fence had become a boundary line by long acquiescence. In all of the cases cited on boundary lines by acquiescence, Stewart v. Bittle, 236 Ark. 716, 370 S.W. 2d 132 (1963), Gregory v. Jones, 212 Ark. 443, 206 S.W. 2d 18 (1947), and Vaughn v. Chandler, 237 Ark. 214, 372 S.W. 2d 213 (1963), there has been involved a peaceful occupation of the lands up to the fence by the person claiming the boundary to be one by acquiescence. There was testimony here that Council’s cows were never seen on appellees’ side of Hurricane Creek and that because of the terrain it would have been impossible to have built the fence in the middle of the creek according to the description in the deed. "When wo consider that the fence in question was built generally as close to the natural barriers of the creek as possible, we agree with the Chancellor that the fence had not become a boundary line by acquiescence.

In their argument, appellants suggest that since they have used the property up to the north side of the fence since 1947, they have acquired title by adverse possession. Since Mr. Council admitted on cross examination that lie had never given notice of any claim of title to the property between the creek and the fence until some time in April 1963, we find no merit in his position. In Franklin v. Hempstead County Hunting Club, 216 Ark. 927, 228 S.W. 2d 65 (1950), we said:

“The rule is well established that 'retention of the possession of vendors after the execution and delivery of a deed is presumed to be in subordination of the title conveyed and the statute of limitations will not begin to run until notice of the hostility of their claim is actually given to the grantee.’ ”

Affirmed.


author: Conley Byrd, Justice.

text:
    Security Tire and Rubber Company, Inc. v. Stephen E. Hlass d/b/a Stephens Tire Co. and Larry McCord, Trustee in Bankruptcy
    5-4936
    441 S.W. 2d 91
    Opnion Delivered May 26, 1969

      Ham Gooddmi for appellant.

      Hhaw S, Bed well for appellees.
   Conley Byrd, Justice.

Appellant Security Tire and Rubber Co., Inc. on April 25, 1967, took four notes from appellee Stephen E. Hlass secured by the following security agreement:

“I Steve E. Hlass do hereby assign the customer accounts receivables and the Company owned inventory of Stephens Tire Company, 2517 Alma Highway, Van Burén, Arkansas to the Security Tire and Rubber Company, Inc. of Richmond, Virginia, as collateral for four notes Nos. 1, 2, 3 and 4 in the amount of $9,092.00.”

On May 9, Stephen Hlass gave his check for $2,273.00 in payment of the first note which was dishonored because of “insufficient funds.” On June 9, 1967, appellant completed tlie filing of its security agreement and on June 16, 1967, filed its complaint asking for foreclosure under its security agreement of tire inventory liere involved. On August 28, 1967, Hlass was adjudicated a bankrupt and on September 18,1967, appellee Larry McCord, trustee in bankruptcy, intervened claiming that appellant’s security agreement was a voidable preference under ^ 60b of the Bankruptcy Act. When the trustee in bankruptcy filed a motion for summary judgment based upon the pleadings and certain alleged credit memos of appellant, appellant responded and attached an affidavit of its agent, Oscar Hamlett.

In his affidavit Hamlett says that appellant began doing business with Stephen Hlass in December 1965. At one time Hlass owed appellant more than $18,000 but he made substantial payments in November, December, January, February and March immediately preceding making the notes. He then states that Hlass decided that he was overstocked and wanted to reduce his inventory and on Hlass’s request appellant took back some tires and gave Hlass credit. Hamlett says that at the time of taking the notes he made inquiry about Hlass’s business and was told that he just bought a $25,000 home, that Hlass owed nobody except appellant and that his Dunn & Bradstreet rating showed a net worth between $20,000 and $35,000 with a good credit. Hamlett says that he did not know and had no cause to know or believe that Hlass was insolvent either in April or June of 1967.

The Court in awarding summary judgment to the trustee in bankruptcy found as follows:

“The Court specifically finds that the attempted transfer and the suit and attachment based thereon occurred within four (4) months of the bankruptcy action, that the attempted transfer and attachments based thereon were all executed at a time when the debtor was insolvent and had been insolvent for a period of time, and the plaintiff knew oí' liad reasonable g'rounds to know and believe that the Debtor was insolvent when the transaction was arranged, that the consideration therefor was an antecedent debt, and to allow this transfer to the Plaintiff to stand would enable the Plaintiff-creditor to obtain a greater percentage of his debt than other creditors in the same class. Therefore all elements constituting a preference are found to be in existence, and this transfer is accordingly null and void as a preference under the Bankruptcy Act.
“The Court specifically finds further that the attempted assignment to the Plaintiff-creditor was not validly executed under the terms of the Uniform Commercial Code, and a lien predicated on the seeurity instrument is found to be null and void as a secured transaction and this Plaintiff is therefore in the same category as any other unsecured creditor. ’ ’

For reversal of the summary judgment appellant relies upon the following points:

“1. The Court erred in holding that appellant’s lien did not qualify as a security interest under the Commercial Code;
“2. The Court erred in granting a summary judgment, inasmuch as a genuine issue of two material facts existed; the issues being (a) whether Stephens was insolvent and (b) whether appellant had reasonable cause to believe that Stephens was insolvent. ’ ’

POINT 1. Appellees to support the summary judgment argue that the security agreement does not contain a sufficient description of the inventory to comply with Ark. Stat. Ann. § 85-9-110 and Ark. Stat. Ann. § 85-9-402(1) (Add. 1961). They contend that a description of the collateral must be described by type or item to be sufficient. Ark. Stat. Ann. § 85-9-110 upon which they rely provides:

“For purposes of this article any description of personal property or real estate is sufficient whether or not it is specific if it reasonably identifies what is described.”

Ark. Stat. Ann. § 85-9-402(1) provides:

“A financing statement is sufficient if it is signed by the debtor and the secured party, gives an address of the secured party from which information concerning the security interest may be obtained, gives a mailing address of the debtor and CONTAINS A STATEMENT INDICATING THE TYPE, OR DESCRIBING THE ITEMS, OF COLLATERAL. ’ ’

The foregoing sections are commented upon by Mr. Oscar Spivack in his pamphlet, “Secured Transactions” (ALI 1960), and by the honorable Harry Meek in 18 Ark. Law Review 30, (1964). Mr. Meek in his article cites Industrial Packaging Prod. Co. v. Fort Pitt Pack. Int’l., 399 Pa. 643, 161 A. 2d 19 (1960), In re Kowalski, 202 F. Supp. 897 (D. Conn. 1962) and In re Drane, 202 F. Supp. 221 (W.D. Ky. 1962). These authorities agree that the better practice is to describe the collateral by types or items when a security is taken on inventory. However the authorities cited by Mr. Meek point out that the description need not be such as would enable a stranger to select the property and that a description is sufficient which will enable third persons, aided by inquiries which the instrument itself suggests, to identity the property. When the instrument here is considered in that light, if shows that it gave a lien on the “Company owned inventory of Stephens Tire Company, 2517 Alma Highway, Van Burén, Arkansas.” When we consider that the term “inventory” is defined in Ark. Stat. Ann. § 85-9-109(4), we believe that a fact issue was made by which the goods involved here could possibly be identified under the agreement given. The information given here seems to have been adequate for the sheriff to take the property into his possession. The record does not say but it is obviously possible that the Stephens Tire Company is the only business at the address given and that its only business has to do with tires. The record bore does show that the inventory consisted of tiros and tubes. For these reasons we hold that the trial court erred in holding as a matter of law that the description given in the security instrument was insufficient under the statute above.

POINT 2. We are also of the opinion that the trial court erred in rendering summary judgment on the basis that the record conclusively established that the security agreement constituted a preference under § 60b of the Bankruptcy Act. Our cases consistently hold that the theory underlying a motion for summary judgment is the same as that underlying a motion for a directed verdict and that any testimony submitted with such a motion must be viewed in the light most favorable to the party resisting the motion with all doubts and inferences being resolved against the moving party. See Russell v. City of Rogers, 236 Ark. 713, 368 S.W. 2d 89 (1963).

To sustain the summary judgment appellees readily concede that under our decision in Fly & McFall v. Watts, 209 Ark. 282, 190 S.W. 2d 533 (1945), it was necessary for them to show the following:

“1. A transfer on, or payment of, an antecedent debt,
2. by an insolvent debtor,
3. within four (4) months of bankruptcy,
4. resulting in advantage to the creditor,
5. who then had reasonable cause to believe that the debtor ivas insolvent.”

When we consider lire affidavit of Oscar Hamlett in the light most favorable to appellant we believe that a fact issue was made on the solvency of Hlass at the time of perfection of the security agreement asa lien and also ’whether appellant had reasonable cause to believe that Hlass was insolvent. In holding that the trial court erred in awarding the summary judgment we have looked to determine only whether or not there was any substantial evidence presented by appellant to make an issue of fact and have not in auv manner attempted to evaluate the testimony for purposes of credibility.

Never sed and remanded.


author: Carleton Harris, Chief Justice.

text:
    Ray Holland v. State of Arkansas
    5-5415
    442 S.W. 2d 218
    Opinion Delivered June 2, 1969
    [Rehearing denied July 14, 1969.]

      Murphy & Carlisle for appellant.

      Joe Purcell, Atty. Gen.; Don Langston, Asst. Atty. Gen.; Jerry D. Pinson, Asst. Atty. Gen. for appellee.
   Carleton Harris, Chief Justice.

This is an appeal by Ray Holland from his conviction of the crime of assault with intent to kill. Holland was found guilty by the Washington County Circuit Court, sitting as a jury, and his punishment fixed at five years in the State Penitentiary. The court further ordered that pronouncement of three years of this five-year sentence be deferred upon the good behavior of the appellant. Six points are urged for reversal, but we can only consider one, the sufficiency of the evidence, since none of the other alleged errors were set out in the motion for new trial. We do not consider asserted errors not preserved in the motion for new trial. Hardin v. State, 225 Ark. 602, 284 S.W. 2d 111.

The testimony reflects that appellant and his wife, Hazel, were divorced in October, 3967, the wife receiving custody of the minor son, 10 years of age. In March, 1968, Hazel married Kenneth Cecil Lawson, and the parties lived in Fayetteville. Mrs. Lawson testified that a restraining order had been issued against Holland, restraining him from coming about the Lawson home, but on the morning of October 10, 3968, around 9:30 or 10:00 A.M., she saw her ex-husband standing in the street, taking the license numbers of her automobile and her husband’s pickup truck. She inquired as to the reason for his presence, and he replied, “Go ahead and call the police.” Mrs. Lawson announced that that was exactly what she intended to do, and asked Holland what he was going to do, appellant replying, “A damned plenty.” Holland left, and Mrs. Lawson said that soon thereafter, her husband also left to take her car to the garage, something being wrong with the transmission. The witness stated that she, after thinking over Holland’s actions in taking the license numbers, left the house (in the pickup truck) for the purpose of going to police headquarters. However, she observed the Lawson automobile stopped on 15th Street, and also saw Ray Holland turning his car around, and coming back in her direction. She parked the pickup behind the Lawson automobile, and saw Mr. Lawson lying on the ground, “just as bloody as he could be all over.” .She did not see the encounter.

Hershel Rogers testified that, on the morning of October 10, as he pulled out of Wal-Mart, and headed east on loth Street, he observed two cars stopping about 200 yards ahead. Upon getting closer, he saw the occupant of the front car, a 1959 Mercury, get out of his vehicle, and go around to the back car, a red Ford, the occupant of that automobile being in the act of getting out of his car, and the two went into a “clinch.” According to the witness, this occurred about at the opening of the Ford door on the driver’s side. The two automobiles were about 60 feet apart. Rogers stopped his automobile, and observed the fight. One man (Lawson) seemed to be getting the worst of the fight, and broke away. Rogers then observed that this man, who ran west from the scene about 200 feet, had bloody spots over his clothes. The witness left to call the officers.

Grlenn Riggins, criminal investigator on the police force of Fayetteville, testified that a call was received about the occurrence, and officers started to the scene, but before arriving there, received a radio message that Holland was already at the station. They returned, and, according to Riggins, another officer, Richard Wells, advised Holland of his constitutional rights by reading from a waiver. Holland then admitted that he had cut Lawson with a knife, and a pocket knife was taken from appellant, which appeared to have blood stains on it.

Kenneth Lawson testified, as follows:

“I started out to see about my car and I seen his car in front of me. He pulled over and stopped and I stopped. I was going to ask him — now, I didn’t know Mr. Holland personally but I did recognize the car and the car had been following me on previous occasions. When I’d take the kids to school, when I’d be going to and from work, and I wanted to know'- why. I stopped to ask him why. I didn’t get a chance to say a word. He come out of his car and he said, ‘You son-of-a-bitch, you’ve caused me enough trouble. I’m going to kill you.’ Aud he come out with a knife.”

The witness said that he liad no weapon of any sort, but was finally able to break away from appellant. He denied that he left his house to “go out after Holland.”

Dr. John W. Vinzant, of Fayetteville, testified relative to the wounds received by Lawson, as follows:

“The man had sustained several knife wounds and had a blood pressure at that time of around eighty systolic with shock. * * * He had seven stab wounds over the shoulder, the thorax above the belt. Two of these wounds were severe, the others were minor. One penetrated the thoracic cage on the left. * * * Out a rib in two, went through the diaphragm and lacerated the liver.”

The doctor testified that the wounds indicated the application of considerable force; that the 'wound caused by the blow that cut the rib in two was 3 or 3% inches long, and approximately 2 inches deep. “It went clear through the thoracic wall.” The witness said all seven wounds required stitches to be closed, aud he stated that Lawson was in serious condition when he (Vinzant) saw him. The doctor testified that Lawson had a collapsed lung,” and remained in the hospital for nine days; further, that the liver was also cut, and Vinzant described a particular wound over the heart, which he found to be serious, as follows:

“Directly over it [the heart] and into the thoracic cage. Again, the lung could have collapsed hut for some reason, it didn’t, on that side.”

More specifically describing this wound, the witness said:

‘ ‘ This wound was approximately two and a half inches in length, it went laterally or in a circle around the body between the ribs. It went completely through the chest wall which would be about the same thickness as the other one, around two inches, and you could explore it with your fingers and touch the heart and lung.”

Holland testified that he was copying the license numbers because he understood that one of the vehicles was registered in the name of Holland, and he was ‘ ‘ curious.” He said:

“Well, Hazel came rushing out of the house there and commenced to throw one of her usual hissies. * * * ‘What are you doing out here bothering us ? Why don’t you go away and let us alone?’ * * * I just went on and let them alone. I had the numbers that I wanted.”

Holland said that he knew someone was following him, and he was suspicious that it was Lawson; the car behind caught up with him at a stop light, and followed him “bumper to bumper” to where appellant stopped his automobile. The record reflects the following:

“Well, I got out to see what was going on and he jumped out of his car and he was messing around there behind the door of his car. I thought he was coming out with a pipe or a tire tool.
Q. Then what occurred?
A. Well, T pulled my knife out and waded in on him.”

He said they “came together,” and Lawson struck him, and “that’s when I went to work [meaning that he used his knife].” When asked if he held any ill will toward Lawson, lie said, “Not a thing only over unchildren. I want to see those children.” Appellant said that Lawson had no weapon, “but I thought he would have.” He stated that, if he had wanted to kill Lawson, he could have done so, but he was only interested in “getting him away from me.”

Of course, the court, sitting as a jury, was the. fact-finder, and it apparently did not believe Holland acted in self-defense. In Davis v. Diate, 206 Ark. 726, 177 S.W. 2d 190, we said:

“Although the state is required to prove that the defendant actually intended to kill, it need not depend upon declarations made by the defendant to establish such fact. While the intent to kill cannot be implied as a matter of law, it may be inferred from facts and circumstances of the assault, such as the use of a deadly weapon in a manner indicating an intention to kill, or an act of violence which ordinarily would be calculated to produce death, or great bodily harm. In determining whether or not the intent to kill should be inferred, the trier of the facts may property consider the character of the weapon employed and the way it was used, the manner of the assault and the violence attendant thereon; the nature, extent and location on the body of the wound inflicted, if any; the state of feeling existing between the parties at and anterior to the difficulty; statements of the defendant, if any; and all other facts and circumstances tending to reveal defendant’s state of mind.”

Certainly, there was substantial evidence to support the verdict. Holland was the first to stop his automobile, and he immediately pulled his knife, though the evidence clearly shows that Lawson was unarmed. Without making any effort to ascertain whether the prosecuting witness had any sort of weapon, appellant, according to his own words, “pulled my knife out and waded in on him.” The number of times appellant struck Lawson with the knife, and the severity of the wounds are clear indications that Holland had the intent to kill. In fact, it seems rather remarkable that Lawson did not die, having a rib cut in two, the diaphragm completely penetrated, a lacerated liver, a collapsed lung, and the knife going so completely through the chest wall that the doctor testified that the heart and lung could be touched by the finger. The evidence is more than ample to support the judgment.

Affirmed.

      This waiver contained all of the so-called Miranda warnings. Miranda v. Arizona, 384 U.S. 436, 16 L. Ed. 2d 694 (1966).

      Holland made a statement at the station, but the court did not admit it into evidence, as it was unsigned.

      The cloctor explained this as “the lung, into the lung cavity.”

      The reference “children” included the two daughters of Mrs. Lawson by an earlier marriage, these children having been adopted by appellant during his marriage to the present Mrs. Lawson.

      From the record: “Q. Then when you get down to the jail, you asked somebody, you said, ‘Is that bird dead yet?’ Some oí the police officers? Didn’t you? The Court: Did you say that? A. I don’t recall saying that in that particular way. Mr. Coxsey: Just a moment. Q. To Riggins and Hutchens, and this young man, Wells? I’ll ask you if you didn’t say this, or this in substance, ‘Is that bird dead yet?’ A. I don’t recall saying it in that — . Q. How did you say it? A. I really don’t recall the exact words. Q. The fact is that you expected him to die and you asked him if he wasn’t dead yet, and you said ‘That bird,’ now didn’t you, Ray? A. I am not going to^ admit to that, Ted, because I don’t think I said it. Q. Are you going to deny it? A. I can’t very well deny it but I am still not going to admit that I said it. Now, if Mr. Wells says I did, I’m not going to argue with him.”


text:
    Leslie Thomas v. Wanda Lee Thomas
    5-4925
    443 S.W. 2d 534
    Opinion Delivered June 2, 1969
    [Rehearing denied August 25, 1969.]

      Jeff Duty for appellant.

      Davis & Reed for appellee.
   Carleton Harris, Chief Justice.

This is a case of first impression in this state. On January 15, 1968, appellee, Wanda Lee Thomas, instituted suit against appellant, Leslie Thomas, seeking an absolute divorce. On March 26, 1968, the parties entered into a “property and support agreement,” setting out that it was “the desire' of the parties hereto to settle, compromise and determine their respective rights, duties and obligations with regard to support, property and financial matters * * Included in the agreement was a provision requiring Mr. Thomas to pay to Mrs. Thomas, as alimony and support, the sum of $35.00 per week, beginning on April 6, 1968. Thereafter, on May 29, 1968, a decree of divorce was entered, granting appellee an absolute divorce from appellant, the decree reciting that the parties had entered into a certain property and support agreement, which liad been filed and approved by the court. The actual order in the decree reads as follows :

It is, therefore, by the Court considered, ordered, adjudged and decreed that the plaintiff be, and she is hereby, awarded an absolute divorce of and from the defendant; that the Property and Support Agreement entered into by the parties which is filed herein, be, and the same is hereby, specifically approved by the Court and is adopted and incorporated herein as a part and parcel of this Decree in settlement of the respective rights, liabilities, and obligations of the parties hereto; and that the defendant bear the costs of this action and attorney’s fees incurred herein.
“It is so ordered.”

Thereafter, appellee filed a petition asking that Leslie Thomas be cited for contempt of court, the petition alleging that appellant had failed to comply with the provision in the agreement requiring the payment of $35.00 per week to Mrs. Thomas. On hearing, the court found appellant in contempt, and ordered that he be confined in the Washington County Jail for a period of 10 days. From the order so entered, appellant brings this appeal. The sole point for reversal is that the court had no authority to hold appellant in contempt under the wording of the decree, appellant asserting that the court made no order requiring Mr. Thomas to comply with the terms of the property settlement.

At the outset, it might be stated that there is authority on both sides of the question of whether' a court can enforce, by contempt proceedings, a property agreement reached in contemplation of divorce. Cases are cited by both appellant and appellee, holding with their respective positions. It is our view that the question, in this state, is determined by statute, viz., Ark. Stat. Ann. §. 34-1212 (Repl. 1962). Prior to 1941, the controlling statute was Section 4391 of Pope’s Digest, which provided :

“The court may enforce the performance of any decree or order for alimony and maintenance by sequestration of the defendant’s property, or that of his securities, or by such other lawful ways and means as are according to the rules and practice of the court.”

In 1941, the Legislature amended this section, same now appearing as Section 34-1212, and reading as follows :

“Courts of equity may enforce the performance of written agreements between husband and wife made and entered into in contemplation of either separation or divorce and decrees or orders for alimony and maintenance by sequestration of the defendant’s property, or that of his sureties, or by such other lawful ways and means, including equitable garnishments or contempt proceedings as are in conformity with rules and practices of courts of equity.”

This action by the Legislature clearly seems to have been taken for the purpose of enabling the Chancery Court to enforce the performance of written agreements between husband and wife entered into in contemplation of divorce, i.e., to cover situations like the one presently before us. It will be noted that the amended statute also specifically includes contempt proceedings as one means of enforcement.

Nor do we agree with appellant that, under the decree, no order to make the weekly payments was entered. The pertinent part of that decree, heretofore quoted, commences, “It is, therefore, by the Court considered, ordered, adjudged and decreed.” this language relating to three items which follow. .First, it is ordered that the plaintiff is awarded an absolute divorce “from the defendant; * * V’ Following the semi-colon, the decree provides that the property and support agreement is incorporated as a part of the decree in settlement of “the rights, liabilities, and obligations of the parties hereto; * * Immediately after this semi-colon, there appears the language, “and that the defendant bear the costs of this action and attorney’s fees incurred herein.” In other words, the opening line wherein the word, “ordered,” is used, applies fully as much to the second clause (relating to the settlement) and to the third clause (referring to the costs) as to the first clause (awarding the divorce).

We think that, in addition to the statute, simple logic supports this view. It is certainly logical that a court, in order to maintain the respect of those who appear before it, be able to enforce the provisions sanctioned by it in a decree of divorce. A like situation was at issue in the case of Solomon v. Solomon, 149 Fla. 174, 5 So. 2d 265. There, a husband and wife executed a property agreement in contemplation of divorce, the agreement setting out that the “ ‘ decree shall provide that the husband shall pay to the wife $300.00 per month on the first of each * * * month.’ ” The final divorce decree was eventually entered, but contained no express provision for the payment of the stipulated amount of alimony, such decree simply reciting “that the property settlement and agreement * * * is hereby approved and ratified in all respects, and incorporated by reference into this decree and made a part hereof. ’ ’ The Chancellor directed the husband to show cause why he should not be held in contempt for disobedience of the decree by failing to meet some of the payments, but on hearing, refused to hold the husband in contempt. On appeal, Mr. Solomon took the same position relied upon by Mr. Thomas in the case before us. Mr. Justice Thomas in a succinct and learned opinion, speaking for the court, said:

“There can be no doubt that the court in the decree sanctioned the arrangement the parties had made between themselves anent the discharge by the husband of his legal and marital duty to support the wife even after the marriage tie was severed and until she remarried.
“It is the appellee’s position that, although the appellant has her remedy to collect the amount due, she cannot resort to proceedings in contempt for that purpose because no specific order was made by the chancellor commanding the appellee to meet the promised payments and that, therefore, he could not be puuished for defiance of the decree.
“It seems to be the rule that where such an agreement is merely ratified and not made a part of the final decree, the husband is not responsible in contempt proceedings for default on his part, but if the agreement is embodied in the decree and contemplates when executed that it shall become a part of the court’s order, a failure of the husband is punishable by contempt.

Here, the property and support agreement was not only specifically approved by the court, but -was adopted and incorporated as part of the decree in setting out the obligations of the parties.

Affirmed.


author: Georoe Nose Smith, Justice.

text:
    Charles P. Ouletta v. State of Arkansas
    5-5406
    442 S.W. 2d 216
    Opinion Delivered June 2, 1969
    [Rehearing denied July 14, 1969.]

      Q. Byrum Hurst and Harmon & Wallace for appellant.

      Joe Purcell, Atty. Gen. and Don Langston, Ass’t. A tty. Gen. for appellee.
   Georoe Nose Smith, Justice.

The appellant was charged with 138 counts of forgery and uttering, all arising from his business transactions with the Benton State Bank. In 1966 and 1967 Ouletta was a contractor, building houses that were financed by the bank. The informations were filed in. 1968, after it was discovered that Ouletta bad transferred to tlie bank, for value, a great many construction notes and mortgages that were signed with fictitious names of persons who were supposedly employing Ouletta to build houses. The circuit court, trying the case without a jury, found the defendant guilty and imposed two ten-year sentences, to run concurrently, with a minimum of one third to be actually served.

TTe first consider Ouletta’s contention that lie should have been acquitted, for insufficiency of the State’s evielenco. II is insisted that the bank’s officers knew the signatures to be fictitious and that therefore Ouletta was not shown to have had the necessary intent to defraud.

That issue involved a question of fact about Avh.ich the testimony Avas iu conflict. Ouletta usually dealt Avith W. A. Springer, formerly a vice-president of the bank. Springer testified that he regularly chocked on the progress of Ouletta’s houses when Ouletta first began business. After several years, however, Springer came to have confidence in Ouletta and discontinued any attempt to verify the notes and mortgages that he brought to the bank. Springer testified that he had no idea that the instruments were forgeries. W. R. Also-brook, president of the bank, corroborated Springer’s testimony.

Ouletta, testifying in his own defeuse, maintained in substance that his financial condition had deteriorated to such an extent that the bankers must have knoAvn that the instruments were not genuine. When, however, Ouletta AAms asked point-blank by his own attorney AAdiother he said anything to Mr. Springer about Ihe use of fictitious names on the notes, his reply AAras evasive: “Well, I might have. I probably did say that they probably were fictitious, to which he probably got the idea.” Thus the issue was essentially one of credibility, upon which the trial court’s finding is conclusive.

Secondly, it is argued that the court erred in allowing Fred Caudle, a. Federal Deposit Insurance Corporation bank examiner, to testify that Ouletta made a statement in writing that he had signed the fictitious names without anyone else knowing about it. It is insisted that Caudle’s testimony and the signed statement should have been excluded, because Ouletta was not given a Miranda warning by Caudle.

That argument is not sound. Counsel rely upon two cases: United States v. Wainwright, 284 F. Supp. 129 (D.C. Colo. 1968), and United States v. Turzynski, 268 F. Supp. 847 (D.C. Ill. 1967). In those cases it was held that a taxpayer should he warned of his rights before being interrogated about his income tax returns by the Intelligence Division of the Internal Revenue Service. In both cases, however, it was pointed out that a tax matter is not referred to the Intelligence Division until there is reason to believe that the taxpayer has committed a crime. The jurisdiction of the Intelligence Division is limited to criminal matters. Thus those cases merely followed Escobedo v. Illinois, 378 U.S. 478 (1964), in holding that the warning must be given when an investigation reaches the accusatory stage.

That was not the case here. Caudle testified that he was not a member of any law enforcement agency. In making his examination of the bank he noticed the similarity of handwriting on the notes and asked Ouletta to come in, because his name and address were on the documents. According to Caudle, Ouletta came to the bank voluntarily and signed the statement in the course of a conversation about the documents. It cannot be said that Ouletta was in custody or was deprived of his freedom of action in any wav. See Miranda v. Arizona, 384 U.S. 436 86 S. Ct. 1602, 16 L. Ed. 2d. 694 (1966), and Orosco v. Texas, 394 U.S. 324, 89 S. Ct. 1095, 22 L. Ed. 2d 311 (1969). The trial court correctly admitted in evidence Caudle’s testimony and the statement signed by Ouletta.

Finally, it is argued that after the trial judge had made a finding of guilty and had announced the sentence, the court erred in stating that he would suspend the sentence if the bank president, Alsobrook, recommended it — ■ which Alsobrook refused to do. . We find no error, not only because the matter of suspending the sentence lay within the discretion of the trial court, but also because there was no objection nor exception to the court’s request for Alsobrook’s recommendation. McDonald v. State 160 Ark. 185, 254 S.W. 549 (1923).

Affirmed.

Jonhs, J., not participating.