author: Neill Bohlinger, Associate Justice. Sam Robinson, Associate Justice,

text:
    Charles v. Lincoln Construction Co.
    5-2754
    361 S. W. 2d 1
    Opinion delivered October 1, 1962.
    [Rehearing denied November 5, 1962.]

      George Hoivarcl, Jr., for appellant.

      Eugene S. Harris and Bridges, Young & Matthews, for appellee.
   Neill Bohlinger, Associate Justice.

The appellant in this case was a laborer who was injured while working on the construction of a school building at Star City, Arkansas. He filed a claim for workmen’s compensation against the appellee, Lincoln Construction Company, alleging that he was an employee of the Lincoln Construction Company and had a compensable injury.

At a hearing before the Workmen’s Compensation Commission that Commission disallowed his claim and an appeal was taken to the Lincoln Circuit Court which affirmed the finding of the Workmen’s Compensation Commission and denied the claim against the Lincoln Construction Company from which action this appeal is prosecuted.

It appears from the record before us that the appellant had been employed from time to time by the appellee, Lincoln Construction Company, and that he worked under their foreman, Phillip McFall; that some time before the accident complained of the Star City School District decided to build two school buildings and deemed it more economical to do the work by its own employees rather than let a contract. The School District agreed with the appellees upon the use of appellee’s foreman, Mr. McFall, as general superintendent in the operation of building the two schools. There is nothing in the record that indicates that the appellee had any contract with the School District or interest in the erection of the two school buildings. Mr. McFall recruited his own laborers and the School District paid Mr. McFall and the laborers.

Mr. Dayton Fish was one of the partners in the Lincoln Construction Company and was a member of the School Board and in addition thereto he maintained a business known as the Builders Supply Company where for a number of years it was customary for most of the contractors in that vicinity to go to recruit their labor supply. The appellant had, from time to time, gone to the Builders Supply store and had been directed by Mr. McFall where to go or would be transported by McFall to the site of such work as would be required of him. It further appears that at times the appellant would work part of a day on the school job and the balance of the day at a Lincoln Construction job. Appellant’s time on the various jobs was kept separately and he was paid according to the hours he worked on each job. All of his checks were received through McFall but wages earned at the school site were paid by a check on the School District and wages earned at a Lincoln Construction job were paid by a Lincoln Construction check.

In South Arkansas Feed Mills v. Roberts, 234 Ark. 1035, 356 S. W. 2d 645, opinion delivered April 16, 1962, we quoted from Larson’s Workmen’s Compensation Law, 710, under the heading “Lent Employees and Dual Employment”:

“§ 48.00 When a general employer lends an employee to a special employer, the special employer becomes liable for workmen’s compensation only if
(a) The employee has made a contract for hire, express or implied, with the special employer; [Emphasis added]
(b) The work being done is essentially that of the special employer; and
(c) The special employer has the right to control the details of the work.”

In this case we also quoted from Stuyvesant Corporation v. Waterhouse, (Fla.) 74 So. 2d 554, as follows:

“Basically and fundamentally, after all the chaff is cast aside, the solution of almost every such ease finally depends upon the answer to the basic, fundamental and bedrock question of whether as to the special employer the relationship of employer and employee existed at the time of the injury. If the facts show such relationship, the existence of a general employer should not change or be allowed to confuse the solution of the problem. ’ ’

Likewise we quoted from the Nepstad v. Lambert case, 235 Minn. 1, 50 N. W. 2d 614:

Since both employers may each have some control, there is nothing logically inconsistent, when using this test, in finding that a given worker is the servant of one employer for certain acts and the servant of another for other acts . . . The crucial question is which employer had the right to control the particular act giving rise to the injury. In this connection, Restatement Agency, § 227, comment a (2) states:
i * * * gjnce question of liability is always raised because of some specific act done, the important question is not whether or not he remains the servant of the general employer as to matters generally but whether or not, as to the act in question, he is acting in the business of and under the direction of one or the other.’ (Italics supplied.) ”

It appears clear from the record and the Commission and trial court so found, that appellant Charles was working for two different employers at different times and that the work was separable. This presents the question as to whether or not the appellant knew and consented to work for the School District. The case of Ledbetter v. Adams, 217 Ark. 329, 230 S. W. 2d 21, covers this situation:

“* * * the authorities hold (1) that the original employer remains liable under the Workmen’s Compensation Act, until there has been a reasonable time, or course of events, for knowledge of change of employer to be brought home to the employee; and (2) that the relationship of employer and employee is presumed to continue for a reasonable time after a sale of the business made without the knowledge of the employee. See Palmer v. Main, 209 Ky. 226, 272 S. W. 736; Buchanan Min. Co. v. Henson, 228 Ky. 367, 15 S. W. 2d 291; Schneider’s Workmen’s Compensation Test, Perm. Ed., § 788; Horowitz on ‘Workmen’s Compensation,’ p. 228, et seq.; and also 71 C. J. 397 * * [Emphasis added]

The contention is made that Charles, the appellant, was the employee of the appellee but the appellee had no control of nor financial interest in the work on which appellant was injured and we think that more than three months time is a reasonable time and the courses of events are such as to bring home to appellant the status of his employment. Testifying in his own behalf appellant was asked as to the kind of checks he received:

“A. I’d get a green one from over to the school and I’d get a pink one from Lincoln Construction.
Q. And so you knew then that when you were working over at the schools you would get paid by a green check signed by the Superintendent, didn’t you?
A. That’s right.
Q. And you knew that when you went to what you call a Lincoln Construction job you got paid for that by a pink check?
A. That’s right.
Q. I’m talking about when you got hurt that day. You knew by that time that you were being paid by the school district, didn’t you?
A. Oh, yes, sir, I knowed it then.
Q. Didn’t Mr. McFall keep a record of the time you spent out there on the School District and isn’t that the time you got paid for by the school?
A. That’s right.”

A fellow workman, Sherman Rochelle, whose employment was in all respects similar to that of appellant, testified as follows:

‘ ‘ Q. Now, Sherman, when you are working out there for the school, who do you understand you are working for?
A. Mr. Phillip McFall. At least I know what they said, I was working for the school but I was assigned on to him.
Q. You work where Mr. McFall tells you but when you are out there working on the school ground site or you know where they are building the school, don’t you understand you are working for the School District at that time?
A. Yes, sir.
Q. Isn’t that who pays you? I mean isn’t that the kind of check you get at the end of the week?
A. I get a school check. ’ ’

Further on in the testimony he was asked:

“Q. Don’t you know the school is going to pay you for the work you do on their building?
A. Yes, sir.”

It therefore appears clear that the appellee had no interest in the school construction job and in no wise controlled it and that the evidence sustains, and the Commission and the Court so found, that the appellant, by reason of the time and course of events, was bound to have become aware of the status of his employment.

The judgment of the Circuit Court is affirmed.

Harris, C. J., not participating.

Robinson and Johnson, JJ., dissent.

Sam Robinson, Associate Justice,

(Dissenting). There is no substantial dispute about the facts in this case. The appellant claimant, Joe Louis Charles, a negro, 24 years of age, had been working in the construction business as a common laborer for three years. At the time he was sent by his employer, the Lincoln Construction Company, to work on the school job, he had worked continuously for Lincoln without any interruption at all for two years; he had worked every working day.

During the time he worked on the school building, he reported to work every morning at the Lincoln Company’s place of business; the same place he had reported for work every day for two years. Never at any time did his regular employer, Mr. Fish, the owner of the Lincoln Company, Mr. McFall, the superintendent for the Lincoln Company, or anyone else, tell him that he was not working for the Lincoln Company.

With the possible exception of the fact that apparently, on three occasions, he received weekly checks of a different color than those ordinarily used by the Lincoln Company, there is not a scintilla of evidence in the record to the effect that the claimant had any knowledge whatever that he was not working for the Lincoln Company at the time he was injured. Certainly a different colored check would not be of any significance to the employee when all the checks were signed by his regular employer, Dayton Fish. According to the record, Mr. Fish signed the checks issued by the Lincoln Company, and as Secretary of the School Board, he signed checks issued by the school. Can it be said this was sufficient to give a common laborer notice that he had been fired by his regular employer without his knowledge or consent and employed by someone else without his knowledge or consent?

In addition to the positive testimony of the appellant that he thought he was still working for the Lincoln Company, all the circumstantial evidence points to the fact that he had no reason to believe that he was working for someone else. He reported to the Lincoln Company place of business every morning for work; he did not work at one particular job; even on the same days that he was working on the school job, he was sent by the Lincoln Company to various other jobs; Mr. McFall, foreman for the Lincoln Company, was still his foreman; the Lincoln Company’s tools and equipment, including a tractor and a digger, were used on the school job the same as the other jobs; Mr. Fish, the same man who signed his checks for the Lincoln Company, signed the checks it is now claimed that he got from the school board; the checks were delivered to him by Mr. Fish, his regular employer, or Mr. McFall, his regular foreman. It is admitted that during the time it is claimed that McFall was in the employ of the school board he was the general foreman for the Lincoln Company. He kept the alleged school time and the Lincoln Company time all in the same book. Mr. McFall testified:

“Q. Glance back through there if you will for the preceding two or three weeks and see if you find his name as having worked for the Lincoln Construction Company?
A. He worked seven hours on December the 6th.
Q. Who was he working for at that time?
A. Wait just a minute. I am back on the school job here. I got the wrong one.
Q. Is that the last time prior to the January 3rd or whenever it was ?
A. January 10th.
Q. When was that that he worked for the construction company?
A. He worked three days, four days. He worked four days in December. Let’s see, this would be the 12th, 11th, 10th. He worked on the 10th, the 14th, the 15th, and the 17th.
Q. Of December?
A. Of December. I am all messed up here. I am on the School District again. ’ ’

According to Mr. Fish’s testimony, he simply loaned Charles to the School Board. Mr. Fish testified:

“Q. And if I understand your testimony it is then that at this particular time your work was slack so that you were able to spare both McFall and certain workers?
A. That’s correct.
Q. To lend them, to allow them to work for the School District. Is that correct?
A. That is correct. ’ ’

As heretofore pointed out, no one contends that the claimant, Charles, was ever told by anyone that he was not working for the Lincoln Company, just as he had worked for them continuously every day for two years, and it is not claimed by anyone that Lincoln ever surrendered control of its employee, Charles. In fact, it is entirely clear and beyond dispute that the Lincoln Company moved Charles around from job to job at its will. In Anderson v. Northwestern Hospital, 40 N. W. 2d 442, it was held that in determining who was the actual employer, payment of compensation was important, but where the original employer maintained control over the employee and assigned her to different institutions, there was no change in employer. In Rhinelander Paper Co. v. Industrial Commission, 239 N. W. 412, the Court said: “Where the employee enters the service of another at the command and pursuant to the direction of the master, no new relationship is created. While the employee may be subject to the direction of the temporary master, he is there in obedience to the command of his employer, and in doing what the new master directs him to do, he is performing his duty to the employer who gave the order. ... It is clear that the claimant was performing services in obedience to the direction of the master and there was no consent on his part, express or implied, sufficient to make him the employee of the American Engineering Company. ’ ’

In his work on Workmen’s Compensation Law, Yol. I, at page 710, Professor Larson states: “Although the lent-service doctrine is a familiar one at common law, and has produced some of the most venerated and most intricate cases in the law of master and servant, it is necessary to stress once more that the workmen’s compensation lent-employee problem is different in one significant respect: there can be no compensation liability in the absence of a contract of hire between the employee and the borrowing employer. For vicarious liability purposes, the spotlight was entirely on the two employers— what they agreed, how they divided control, how they shared payment, and whose work, as between themselves, was being done. No one paid much attention to the employee or cared whether he had consented to the transfer of his allegiance, since, after all, his rights were not usually as a practical matter involved in the suit. In compensation law, the spotlight must now he turned upon the employee, for the first question of all is: did he make a contract of hire with the special employer? If this question cannot be answered ‘yes’, the investigation is closed, and there is no need to go into tests of relative control and the like. ’ ’

To support the view expressed, the majority cites two Arkansas cases. In my opinion, neither case is authority to sustain the majority’s position.

The first case cited by the majority is South Arkansas Feed Mills v. Roberts, 234 Ark. 1035. The issue was whether Eoberts was to he considered an employee of South Arkansas. In the case at bar the majority failed to point out that in the Feed Mill case, Eoberts specifically agreed to the employment by the feed mill. There, this Court said: ‘ ‘ The relationship of employer and employee existed between South-Ark. and claimant when he was injured and had so existed for about eleven months theretofore. . . . The most reasonable interpretation of the evidence is that claimant was a special employee of South-Ark. at the time of his injury; 2. Shortly after claimant began work for South-Ark. he agreed to such employment.” Furthermore, South Arkansas paid insurance premiums on Eoberts.

The other case cited by the majority is Ledbetter v. Adams, 217 Ark. 329, 230 S. W. 2d 21. There, the Court held that the employee, Ledbetter, was, for compensation purposes, still the employee of his original employer, Adams, although without Ledbetter’s knowledge, Adams had sold the taxicab driven by Ledbetter to one Pike, who was the actual employer at the time Ledbetter was injured. The Ledbetter case and the authorities cited therein support the employee, Charles’, position in the case at bar.

Mr. Jerry Thomasson, Referee for the Workmen’s Compensation Commission, who had this claim before him in the first place, felt that compensation should be allowed. Mr. Thomasson stated: “In this case I feel the claimant was merely following directions of his employer when he went to work for the school district and therefore, no contract of hire was entered into between the school district and the claimant. ’ ’

In my opinion, Mr. Thomasson was correct in his conclusion. I also think Charles is entitled to compensation for the loss of his finger, and I therefore respectfully dissent from the opinion of the majority.

I am authorized to say that Mr. Justice Johnson joins in this dissent.


source: Caselaw Access Project

author: Carleton Harris, Chief Justice.

license: Public Domain

text:
    Haley v. Greenhaw.
    5-2711
    360 S. W. 2d 753
    Opinion delivered October 8, 1962.

      W. B. Howard, for appellant.

      Gerald E. Pearson, for appellee.
   Carleton Harris, Chief Justice.

The sole question on this appeal is whether a certain transaction was usurious. The facts leading to the litigation are as follows:

Mrs. Mildred Haley, appellant herein, was granted a divorce from Dr. K. J. Haley on May 23,1959. Prior thereto, the parties had entered into a property settlement which included, inter alia, the provision that the doctor would pay Mrs. Haley $500 in cash and execute a promissory note in her favor in the principal sum of $4,200, payable in monthly installments of $150 per month. The payments were to commence on June 1, 1959, and continue until the entire balance was paid. The property settlement further provided that Dr. Haley would pay a real estate mortgage in the amount of $7,500, which existed on the home belonging to his wife; further, that he would transfer title to a certain automobile to Mrs. Haley, and would pay any balance due which might constitute a lien on the car. According to appellant, Dr. Haley did not pay the mortgage, did not satisfy the lien on the Cadillac, made only the first two payments on the note, and thereafter left the state of Arkansas, being in Cotton Valley, Louisiana, at the time of the institution of this suit.

Sometime subsequent to the divorce, Dr. Haley married one Christine Knox, and on April 13,1960, Haley and wife conveyed to Ben R. Scott, approximately 480 acres of land in Greene County, Arkansas, for the consideration of $87,500. Scott and wife, on April 19, 1960, executed to Haley a mortgage on the lands for the amount of $17,500, subject to a lien of the Metropolitan Life Insurance Company for $105,000. The Scotts executed six notes to Haley for the $17,500,- payable over a period from December, 1962, to December, 1967, with interest at rate of six per cent per annum. These notes were subsequently assigned by Haley to appellee, George N. Greenhaw, for the sum of $13,500. The notes provided that the makers and endorsers waived presentment for payment, notice of non-payment and protest, and they were endorsed in blank and without qualification. Mildred Haley instituted suit against Haley, Greenhaw and Scott (as garnishees), asking that Green-haw be declared a trustee of Haley for the notes.

Appellant asserted that “R. J. Haley is liable to the said Greenhaw under his endorsements on said notes and that this transaction amounted to a loan from Greenhaw to Haley of $13,500.00 for which the said Greenhaw was to receive $17,500.00 plus 6 percent interest. Plaintiff says that said transaction was usurious in that it amounted to a taking or an attempting to take interest in excess of 10 percent per annum by Greenhaw from Haley. Plaintiff says that under the constitution and statutes of Arkansas the attempted transfer of said notes from Haley to Green-haw is null and void because of usury. By reason of the fact that said transaction is void on the count of usury, the plaintiff has and the court should declare that plaintiff has an equitable garnishment lien upon said notes for the payment of the amount due plaintiff as set out in the original complaint. ’ ’

Her prayer for relief was as follows:

‘ ‘ That the court enter an order temporarily restraining and enjoining the said Greenhaw from selling, assigning, hypothecating, collecting the proceeds of, or otherwise disposing of the six notes totaling $17,500.00 wherein Ben it. Scott and Maude Scott are makers, R. J. Haley is payee and R. J. Haley is endorser until the further order of this court and that upon final hearing, the court order the said Greenhaw to deposit said notes in the registry of this court in order that they may be subjected to the claim of plaintiff for collection of the amount due her from the defendant Robert J. Haley. Plaintiff further prays that the court decree that plaintiff has an equitable garnishment lien on the notes in question for the amount due her from the defendant Robert J. Haley. Plaintiff further prays that the court find that the purported transfer of said notes from R. J. Haley to George N. Greenhaw was usurious and void and that R. J. Haley be decreed to be the owner of said notes subject to the claims of plaintiff herein. * * *”

The case proceeded to trial, and after the taking of testimony, the court found:

“That the six notes totaling $17,500 dated April 19, 1960, made by Ben R. Scott and Maude Scott, his wife, to R. J. Haley, which said notes were sold, assigned and delivered to defendant, George N. Greenhaw by the said R. J. Haley for the sum of $13,500.00 paid by defendant George N. Greenhaw, to defendant Robert J. Haley, should be found and declared to be the property of defendant George N. Greenhaw, and that the plaintiff, Mildred Haley, has no right, title, interest or claim or equitable garnishment lien upon or against said notes or the proceeds thereof or the security therefor; that said sale, assignment and delivery of said notes by E. J. Haley to George N. Greenhaw was a real and bona fide sale and purchase and was not made as the occasion, subterfuge or pretext for a loan from George N. Greenhaw to E. J. Haley; and that said transaction was not usurious. * * #”

The complaint was accordingly dismissed, and from the decree embracing such findings, appellant brings this appeal.

For reversal, appellant relies upon three points, but we consider point No. 2 decisive in determining the litigation, and accordingly, there is no occasion to discuss the other points. Appellant’s point No. .2 asserts that the transfer of the notes from. Haley to Greenhaw constitutes usury, and the transaction is consequently void. Appellee contends, as found by the Court, that the transaction was a bona fide sale and purchase, and accordingly, was not usurious.

One thing is certain; there can be no usury unless there is a loan, either directly or indirectly. As stated in 55 American Jurisprudence, Usury, § 18, p. 336:

“It is essential to constitute usury that there must be a loan of money or a forbearance of an existing indebtedness ; unless it appears that the transaction in question was in substance a loan or the forbearance of a debt, there is nothing upon which to predicate a charge of usury. ’ ’

In Mitchell v. Duncan, 190 Ark. 598, 79 S. W. 2d 997, we said:

“. . . to constitute, usury, there must be an agreement requiring the borrower to pay and entitling the lender to receive a higher rate of interest than that allowed by statute for the loan or forbearance of money.”

Appellant’s contention of usury is based on the fact that the notes assigned to Greenhaw by Haley were endorsed in blank, and without qualification. The notes contain the following language on their face: ‘ ‘ The makers and endorsers of this note hereby severally waive presentment for payment, notice of non-payment, and protest, and consent to extension of time of payment without notice.” Since, under this endorsement, Haley became equally liable with the maker of the note, Scott, appellant contends that the transaction between Haley and Green-haw became usurious.

The contention is summarized in her brief as follows:

“We now see that when Dr. R. J. Haley endorsed the notes in question to appellee, he undertook to pay the appellee the total sum of $17,500.00 plus 6% interest in return for the advance of $13,500.00. In other words, Haley agreed to pay Greenhaw $17,500 principal plus $5,405.42 (the total of six percent interest computed on the face amount of each note until their respective maturity dates), plus the additional sum of $4,000.00 (the difference between $17,500.00 and $13,500.00). Haley promised to pay $9,405.42 for the use of the money in question, whereas, 10% interest for the period necessary to retire a principal amount of $13,500.00, in accordance with the schedule of due dates on the notes in question would amount to only $6,071.25. Hence, by endorsing the notes, he agreed to pay Greenhaw 10%, plus $3,334.17 in usury. ’ ’

We have held that waiver of notice and protest accompanied by an unqualified endorsement renders the endorser equally liable to the holder of the note. See Gibson v. Talley, 206 Ark. 1, 174 S. W. 2d 551. This holding is in conformity with Section 68-811, Ark. Stats. Anno. That section provides as follows:

“All indorsers or assignors of any instrument in writing assignable by law, for the payment of money alone, on receiving due notice of the non-payment or protest of any such indorsed or assigned instrument in writing, shall be equally liable with the original maker, obligor or payee of such instrument, and may be sued for the same at the same time with the maker, obligee or payee thereof, or may be sued separately.”

Here, of course, the notice of non-payment and protest have been waived. Appellant points out that by the endorsement, Haley has made himself primarily and unconditionally liable for the repayment of the money; that his liability is not secondary, and conditioned upon the failure of Scott to pay.

There is a divergence of authority on the question of whether the discount of a note with general endorsement for a sum in excess of interest allowed by law, constitutes usury. Both appellant and appellee cite authority in conformity with their respective contentions. However, we are of the opinion that the transaction must be viewed from “its four corners” in determining whether this transaction was usurious. Under the facts in this case, we are not willing to say that, as a matter of law, the transaction between Haley and Greenhaw amounted to usury.

To so hold, would have the same effect as saying that a note bearing ten per cent interest can never be sold at a discount unless the seller sells without recourse. Such a holding would, of course, seriously curtail commerce, and would impair the negotiation and sale of commercial paper. Certainly, negotiable notes and mortgages are subjects of bona fide sales in the usual course of business, and very frequently these sales are at-a discount. Probably, most often the sales are with recourse, for many business concerns would not purchase the paper otherwise. We see no reason why an actual and bona fide sale and purchase of paper at a discount should be hampered by the ruling that appellant seeks.

The penalty for a usurious transaction is indeed heavy, and should therefore be established by clear and convincing evidence. A matter of some similarity existed in Webster v. Sterling Finance Company (Mo.), 195 S. W. 2d 509, in that it involved the assignment of notes from one company to another, and posed the question of whether the transaction constituted a sale or a loan. From the opinion of the Missouri Supreme Court:

“Were the transactions as to the alleged sold installments sales as defendant contends, or was each sale agreement a mere camouflage to disguise a usurious loan, as plaintiff contends 1 It is true that ‘ a loan may be cloaked in the outward form and appearance of a purchase, in which case that will not change the substance of the transaction nor hide the usury. But if there is a real and bona fide purchase, not made as the occasion or pretext for a loan, the transaction will not be usurious even though the sale be for an exorbitant price.’ * * *
‘ ‘ The law will not tolerate any camouflage disguising a usurious transaction to make it seem innocent. ‘ The law looks at the nature and substance of the transaction, and not to the color or form which the parties in their ingenuity have given it. No imaginable act or contrivance to cover up and conceal the usury will avail the parties. They will not be permitted successfully to evade the provisions of the statute by any conceivable scheme or expedient. The courts will follow them through all their shifts and devices, and ascertain the true character and design of the transaction. And if upon such investigation, it appears that there was in substance a loan at an illegal rate of interest, no matter what form or shape the contract has been made to assume, it will be declared to be usurious, and the proper remedy applied. ’ * * *
“We do not find any substantial evidence in the record tending to show that the transaction stated in the sale agreements were loans and not sales.”

In the case before us, there is not one single shred of evidence that would indicate that the Haley-Greenhaw transaction was actually a loan, rather than a sale. For that matter, it does not appear that there was any attempt to conceal any part of the transaction. Appellant is apparently of the view that Haley’s sole purpose was to denude himself of his property in order to avoid paying the amount of money due her, but the record reflects that the notes (as well as the assignment of the second mortgage on the lands) were not transferred to Greenhaw until approximately eleven months after appellant and Dr. Haley were divorced. At any rate, we repeat that there is absolutely no evidence to indicate that the transaction was actually a loan, rather than a sale, or that Greenhaw had any intention to do other than purchase the notes at a discount. The language of the written assignment, delivered with the notes, provides that Haley and wife ‘ ‘ grant, bargain, sell, assign, transfer, set over, deliver, and convey unto George N. Greenhaw ... all of their right, title and interest in and to one certain mortgage * * * together with the notes, debts, and claims secured by said mortgage. * * *” Of course, this language does not conclusively mark the transaction as a sale, but as previously stated, the burden .is upon appellant to establish usury. As was said in Hare v. General Contract Purchasing Corporation, 220 Ark. 601, 249 S. W. 2d 973, “Therefore, when the .intention is not apparent, it is a question for the jury to determine whether it was a bona fide credit sale, or a device to cover usury.” Likewise, we are of.the opinion that whether the transaction between Haley and Green-haw constituted a sale or a loan was a question of fact for the trial court to determine. That court found same to be a bona fide sale, and we think, and hold, that this finding was in accord with the preponderance of the evidence.

Affirmed.

       Scott is also technically an appellee, but has no actual interest, his only concern relating to whom the money should be paid to.

       While primarily liable in the sense that, in case of default by Scott, Greenhaw coiild immediately institute suit against Haley alone for collection of the note, it must be remembered that Haley, in such event, could institute suit against Scott for the amount paid, and so, as we generally use the term; Haley, in reality, is not primarily liable. The primary maker of a note, of course, has no recourse against anyone.


author: Ed F. McFaddin, Associate Justice.

text:
    Baer v. Coleman.
    5-2762
    360 S. W. 2d 761
    Opinion delivered October 8, 1962.

      O. W. “Pete” Wiggins, for appellant.

      Martin, Dodds & Kidd, for appellee.
   Ed F. McFaddin, Associate Justice.

The only question to be decided is whether the Trial Court should be sustained in its holding that the plaintiff (appellee) had established a lost deed by the required quantum of evidence.

Mr. J. B. Coleman, Sr. was married three times, and died in 1934. Appellee, Joseph B. Coleman, is the youngest child of Coleman, Sr. The appellants are the children or descendants of Coleman, Sr. by prior marriages. The mother of appellee was Emma Powell Coleman, now deceased ; and appellee is her only heir. Coleman, Sr. owned eight lots in McIntosh’s Second Addition to Little Bock. In March 1930, Mr. Coleman deeded two of the lots to his oldest daughter, Mrs. Elsie C. Baer; and it was and is appellee’s contention that on or about the same time, Mr. Coleman, Sr. deeded the remaining six lots (here in litigation) to Mrs. Emma Powell Coleman; and that appellee owns the six lots by inheritance from his mother.

It was and is the contention of the appellants that due proof of the execution of said deed from Coleman, Sr. to Mrs. Emma Powell Coleman has not been made and, therefore, the appellants and appellee are co-tenants of said six lots. The Chancery Court held that appellee had established the lost deed from Coleman, Sr. to Emma Powell Coleman; and appellants challenge that holding.

At the outset, we recognize the established rule for proof of a lost deed to be as stated by Justice Millwee in Schwartz v. Hardwicke, 229 Ark. 134, 313 S. W. 2d 832:

“It is well settled by our own cases, and the authorities generally, that the evidence required to prove and establish a lost deed must be clear, satisfactory and convincing, though it need not be undisputed. McCulloch v. McCulloch, 213 Ark. 1004, 214 S. W. 2d 209. In Dillard v. Harden, 197 Ark. 586, 124 S. W. 2d 10, we said it is sufficient if the testimony which the court credits and accepts as true shows clearly, concisely and satisfactorily that the deed sought to be restored had in fact been executed and delivered. We have also said that the burden is upon one who claims under an alleged lost instrument to establish its execution, contents and loss by the same quantum of proof. Slaughter v. Cornie Stave Company, 172 Ark. 952, 291 S. W. 69.”

With the applicable law thus stated and understood, we proceed to examine the evidence to see whether it fulfills the requirements. Mrs. Katie Camp testified: that she was unrelated to the parties, but was well acquainted with Joseph B. Coleman, Sr. and his wife, Mrs. Emma Powell Coleman, having known them since 1930 when they were living near her in Levy; that one Sunday afternoon the Colemans were visiting at the home of Mrs. Camp, and Mr. Coleman made the statement that he had deeded two lots to his oldest daughter (Mrs. Baer), and “I made the others to Emma... I made a deed for them ... ”; that after Mr. Coleman’s death the witness saw the warranty deed from Coleman, Sr. to Emma Powell Coleman, conveying the lots here involved; that Mrs. Coleman kept the deed in a little green box; that Mrs. Emma Powell Coleman claimed the lots as her own, and witness went with Mrs. Coleman to see the lots in 1937 or 1938, which was the last time the witness saw the deed; and that the deed had Mr. Coleman’s signature, but witness could not be positive about an acknowledgment.

Mrs. Helen Harris Oates, a sister of Emma Powell Coleman and an aunt of the appellee, testified that she lived near Mr. Coleman, Sr. and Emma Powell Coleman when they were married in 1928; that this was Emma Powell Coleman’s first marriage; that Emma Powell Coleman owned a house in Levy and the Colemans lived there for some time; and that Mr. Coleman died there on April 24,1934. Mrs. Oates testified positively and unequivocally that she saw the deed from J. B. Coleman, Sr. to Emma Powell Coleman; that witness saw the signature of the grantor on the deed and the lot numbers of the property; that the deed was duly notarized; that Mrs. Coleman kept the deed in a little green box; that Mrs. Coleman paid the taxes on the lots as long as she lived; and that witness paid the taxes for appellee each year thereafter.

The deposition of Mrs. Elsie Baer (deceased at the time of the trial) was introduced; and in the deposition Mrs. Baer stated that Mrs. Emma Powell Coleman told Mrs. Baer after the death of Mr. Coleman that he had deeded the lots in question to Mrs. Coleman; and Mrs. Baer accepted it as a fact and so believed for many, many years, until it was learned that no recorded deed could be found.

Mrs. Dillon, a daughter of Coleman, Sr. by a previous marriage, testified that she never heard of any deed from her father to Emma Powell Coleman; but she was confronted by her deposition in which she had conceded that for a period of twenty years she had been under the impression that the lots in question had been deeded to Emma Powell Coleman. In the deposition Mrs. Dillon also conceded that it was only when no deed was found of record that the appellants assumed the position of denying the deed. The appellants furthermore contend that the appellee had first claimed title by adverse possession, and only by subsequent amendment claimed the title by a lost deed.

Without detailing all the evidence, a careful study convinces us that the Chancery Decree should be sustained. For more than twenty years the taxes on the property had been paid for appellee and acts of ownership exercised without any question, and the appellants seemed to believe that Emma Powell Coleman had received a deed for the property. When no deed was discovered of record, some of the appellants undertook to deny the execution of any deed.

Affirmed.


text:
    Harbor v. Campbell.
    5-2755
    360 S. W. 2d 758
    Opinion delivered October 8, 1962.

      Terral & Rawlings and Gail O. Matthews, for appellant.

      Denman & Denman, for appellee.
   Ed F. McFaddin, Associate Justice.

This appeal stems from a traffic mishap which occurred when the appellee Campbell’s car struck the rear of a car occupied by appellants and caused injuries and damages for which appellants sought recovery. The jury verdict and judgment was for Campbell; and appellants seek a reversal because of matters which occurred in the course of the trial.

I. Conviction For Traffic Violation. Appellants sought to introduce in evidence a certified copy of the record of the Municipal Court in which appellee had paid a fine for “failure to yield the right-of-way,” which charge arose because of the traffic mishap here involved. The Trial Court was correct in refusing to allow the Municipal Court record to be introduced in evidence. Section 75-1011 Ark. Stats, says:

“No record of the conviction of any person for any violation of this act shall be admissible as evidence in any court in any civil action.” Our recent cases of Garver v. Utyesonich, 235 Ark. 33, 356 S. W. 2d 744; and Girard v. Kuklinski, 235 Ark. 337, 360 S. W. 2d 115, are in point.

II. Plea of Guilty For Traffic Violation. When Appellee Campbell was testifying, appellants sought to interrogate him to show that for this identical traffic mishap Campbell had entered a plea of guilty in Municipal Court to the charge of failure to yield the right-of-way. The Trial Court refused this evidence of a plea of guilty; and such ruling was error. A plea of guilty for traffic violation for the identical traffic mishap is certainly a declaration against interest; and such plea of guilty is as admissible as any other declaration against interest in any other case. In Covington v. Little Fay Oil Co., 178 Ark. 1046, 13 S. W. 2d 306, we said: “ It is well settled that any statements made by a party, to a suit against his interest, bearing on material facts, are competent as original testimony.” Appellants sued appellee for damages, alleging appellee had been guilty of six acts of negligence. One of these was “failing to have his car under proper control,” and another was ‘ ‘ failing to exercise ordinary care under the existing circumstances.” Appellee’s plea of guilty to “failure to yield the right-of-way,” had clear evidentiary value on the alleged acts of negligence. In Miller v. Blanton, 213 Ark. 246, 210 S. W. 2d 293, we said: “Appellant Miller testified that a charge of reckless driving was filed against him as a result of this collision, and that he pleaded guilty to this charge . . . This testimony as to appellant’s plea of guilty was competent as showing a deliberate declaration against interest by said appellant. 20 Am. Jur. 545”

III. Comments Of The Trial Judge. One of the grounds of negligence levelled against the appellee was the claim that he was driving while intoxicated. Robert Harbor testified that immediately after the traffic mishap he smelled alcohol on Campbell’s breath. Other witnesses testified that immediately after the mishap they saw Campbell throw some beer cans ont of his car into the bushes; and a State Trooper testified that he found four unopened cans of cold beer and one empty can in the bushes pointed out to him by some of the witnesses. When Campbell was on the witness stand, the following occurred on cross-examination:

“By Mr. Rawlings:
“ Q. You don’t know what time you left home?
“A. I don’t remember exactly what time it was. * * *
“ Q. You can’t tell the jury what time you left home ?
“A. I can not.
‘ ‘ Q. The truth of the matter, you were so drunk that you don’t know?
“A. I don’t think so, I - - (interrupted)
“Mr. Denman, Sr.: I object to that.
“The Court: The objection is sustained.
* * * #
Mr. Rawlings: Well, he testified he wasn’t drunk, so don’t I have a right to ask him if the truth of the matter is that, wasn’t he so drunk that he don’t know what time he left home.
“The Court: Well, I don’t think it is proper to come out and ask a man, that kind of a question, when there is no proof about his being drunk, so far.
“Mr. Rawlings: If the court please, I want to ask for a mistrial at this time, because there is evidence in this record that this man threw beer out of his car, that he had an odor of alcohol on his breath; and the statement of the court that - - (interrupted) * * *
‘‘ The Court: That’s far different from being drunk; having the odor of alcohol on his breath is far different from a statement that he was drunk.
“Mr. Rawlings: We wish to object to the statement the court is making in the presence of the jury. ’ ’

We have copied the pertinent cross-examination so there may be seen the full effect of the Court’s remarks. At one place the Court said: “ . . when there is no proof about his being drunk, so far”; and at another place the Court said: “That’s far different from being drunk; having the odor of alcohol on his breath is far different from a statement that he was drunk.” The appellants claim that these remarks of the Trial Judge constituted comments on the weight of the. evidence; and we agree with appellants. When the Court made these remarks, there was already in the record evidence that: (a) the appellee stated he could not remember what time he left home; (b) appellee had driven his car into the rear of a preceding car on the public highway; (c) the appellee had then thrown one empty and four unopened beer cans into the bushes; and (d) a witness had testified that he had smelled the odor of alcohol on the appellee’s breath immediately after the collision.

We are of the opinion that said evidence already offered was sufficient to take the case to the jury on the issue of whether the defendant was guilty of negligence, in that he was driving his car while intoxicated. Such being true, the remark of the Trial Judge was a comment on the weight of the evidence as to intoxication. In Fuller v. State, 217 Ark. 679, 232 S. W. 2d 988, we quoted from our earlier cases, and summarized:

“The requirement of Art. 7, § 23, of our Constitution, that ‘judges shall not charge juries with regard to matters of fact, ’ applies as well to the credibility of witnesses and the weight to be given their testimony as to the outright truth or falsity of what they say. St. L. S. W. Ry. Co. v. Britton, 107 Ark. 158, 154 S. W. 215. And it applies not only to what judges tell juries in the course of formal instructions but also to what they say in colloquys with lawyers in the jury’s hearing.”

IV. Appellate Procedure. The appellee urges one point to overcome appellants ’ entire appeal; and it relates to a procedural matter which we have considered, and which we find does not possess merit. The appellants duly filed notice of appeal and duly obtained extensions for the filing of the record. But the appellants delayed several months before formally filing with the Court the designation of the record and the points relied on for appeal. Appellee says that this delay — in filing the designation of the record and the points on appeal — is violative of Sections 8 and 11 of Act No. 555 of 1953, as now found in § 27-2127.2 and § 27-2127.5 Ark. Stats. We believe that this present contention by the appellee is an afterthought. The appellee apparently considered the time element immaterial, because, when the appellants filed their designation and points, the appellee designated additional matters for the record without making any claim that the original designation of the record and points had come too late. In short, appellee has failed to show any prejudice to him. Furthermore, the appellee filed no motion to dismiss the appeal because of such delay, but only urged it in the brief; so we cannot say that this case falls within our holding in Jones v. Adcock, 233 Ark. 247, 343 S. W. 2d 779.

Because of the errors of the Trial Court, as heretofore discussed, the judgment is reversed and the cause is remanded.

       In 18 A.L.R. 2d 1307, there are cases cited from many jurisdictions to sustain the rule that proof of a plea of guilty is admissible as a declaration against interest.

       There are a series of annotations on the subject, “Driving While Intoxicated,” as contained in 42 A.L.R. 1498; 49 A.L.R. 1392; and 68 A.L.R. 1356. In these annotations there is discussed the sufficiency of the proof of the condition of intoxication in criminal cases, and the admissibility of various bits of evidence. The holdings cited in the annotations fully support the conclusion that we have here reached.


author:
George Rose Smith, J.
      Ed F. McFaddin, Associate Justice

text:
    Harris v. Textor.
    5-2633
    361 S. W. 2d 75
    Opinion delivered October 8, 1962.

      Marcus Fietg, Penix do Penix, Rhine S Rhine and Marshall N. Carlisle, for appellant.

      Kirsch, Cathey & Brown and John Burris, for appellee.
   George Rose Smith, J.

This is an election contest involving the Democratic nomination for the office of aider-man in the city of Paragould. In the court below it was tried together with its companion case, Wood v. Brown, also decided today. In the alderman’s race Textor was the apparent winner by a single vote, 1070 to 1069. The circuit court’s judgment increased his margin to three votes, 1058 to 1055.

At the outset we lay aside the appellant’s contentions with reference to the votes of E. L. Wrape, Sr., L. J. Dowdy, Jerry Jones (and Al Weisberger), Eugene Penney, and Dwight Pranger and his wife. Those issues were considered in the companion case, upon identical evidence, and our decision upon the other appeal is controlling in this case.

I. This appellant also sought a recount of the ballots in Box 2 of Ward 2. We think the trial court erred in sustaining the defendant’s demurrer to this plaintiff’s evidence. While it was not shown that Jones Horne bet on this election, as he did on the mayor’s race, there was other proof entitling Harris to a recount. Several witnesses testified that after the election Jones Horne stated that one vote for Harris had been erroneously counted for Textor and that if there should be a recount Harris would be the winner. This proof, which must be taken to be true on demurrer to the evidence, meets even the most stringent rule in recount cases, for it indicates that a re-examination of the ballots would change the result of the election. Hence a prima facie case was made.

II. Textor contends that the court erred in rejecting the vote of Elaine King, who was charged by the plaintiff with not having paid her poll tax. The trial court seems to have considered Elaine King’s vote along with that of Lewis Crye, for the two involved the same issue. Since Elaine King voted for the appellant and Lewis Crye voted for the appellee it is evident that one canceled the other, no matter whether they were both held to be valid or both cast out. Hence no prejudicial error occurred.

III. Boyd Martin had paid his poll tax in another county, but he did not file the receipt, or a certified copy of it, with the election officials as required by statute. Ark. Stats., § 3-227. His vote was therefore correctly rejected, for the reason stated with respect to Eugene Penney in Part V of the opinion in Wood v. Brown, the companion ease.

IV. Textor also insists that the court, erred in not rejecting the votes of Mr. and Mrs. N. P. Cartright. This couple lived in Paragould for many years. About five years before this election Cartright’s job with a railroad company was abolished, and he moved to Pnlasld county to continue his work there. His wife joined him two years later and obtained employment in Little Rock at the state hospital. The couple bought a home in Pulaski county and assessed their personal taxes there. At the time of the election they were living in Pulaski county, but they still owned their house in Paragould, paid their poll taxes there, and intended to return to Greene county when Cart-right attained retirement age some four or five years in the future.

Upon these facts the Cartrights were not qualified to vote in Greene county. The constitution provides that an eligible voter must have resided within the county for six months next preceding the election. Ark. Const., Art. 3, § 1. This requirement is mandatory; neither the convenience of the elector nor any practice that he may have been permitted to indulge in can abrogate the plain language of the constitution. Wilson v. Luck, 203 Ark. 377, 156 S. W. 2d 795.

Mr. and Mrs. Cartright were unquestionably residents of Pulaski county, having lived there for five and three years respectively and having established their home there. Leñar, Conflict of Laws (1959 Ed.), §<§, 10 and 16. Their situation was not an exceptional one, like that of a public office holder who lives where the duties of his office require him to be. Wheat v. Smith, 50 Ark. 266, 7 S. W. 161. The constitution, by its mandatory language, excludes the notion that a person may be qualified to vote in two or more counties at the same time. Since the Cartrights were clearly entitled to vote in Pulaski county it follows that they were no longer eligible to cast their ballots in Greene county.

Reversed and remanded for further proceedings with respect to Box 2 in "Ward 2.

Robinson, J., thinks that the Cartrights were qualified to vote in Greene county.

McFaddin, J., dissents.

Ed F. McFaddin, Associate Justice

(Dissenting). This is a companion case to Wood v. Brown, No. 2634; and I dissent from that part of the Majority holding in the present case which allows a recount of the votes in Box 2 of Ward 2. The basis of my dissent in this case is stated in my dissent from the Majority Opinion of this day in Wood v. Brown, No. 2634, and also in the Opinion which I delivered in Wood v. Brown on June 4, 1962, which may be found in 235 Ark. 258.


author: George Rose Smith, J., Ed. F. McFaddin, Associate Justice,

text:
    Wood v. Brown.
    5-2634
    361 S. W. 2d 67
    Supplemental opinion on rehearing delivered October 8, 1962.
    (Original opinion delivered June 4, 1962, p. 258.)

      Marcus Fiets, Penix & Penix, Rhine é Rhine, and Marshall N. Carlisle, for appellant.

      Cecil Grooms, for appellee.
   George Rose Smith, J.,

on rehearing. This election contest involves the Democratic nomination for the office of mayor of Paragould. According to the original returns the appellee Brown was the winner by a vote of 1087 to 1077. The circuit court, after rejecting a number of votes that were found to have been illegally cast, determined that Brown was the winner by a vote of 1078 to 1060. In seeking a reversal the appellant questions a number of the trial court’s rulings.

I. In his complaint Wood specifically asked for a recount of the ballots in Box 2 of Ward 2, asserting misconduct on the part of an election judge. On this issue the trial court, at the close of the plaintiff’s proof, sustained the defendant’s demurrer to the evidence.

In a case tried without a jury, as this one was, the defendant’s demurrer to the evidence is really a motion for judgment and is the equivalent of a motion for a directed verdict in a jury trial. In passing upon such a demurrer the trial judge must give the evidence its strongest probative force in favor of the plaintiff. Werbe v. Holt, 217 Ark. 198, 229 S. W. 2d 225. (That was a chancery case, but we pointed out that the same rule governs cases at law tried without a jury.)

Wood’s proof, viewed in its most favorable light, shows that Jones Horne, one of the election judges at Box 2 in Ward 2 had bet $200 that Brown would win the nomination for mayor. There is also testimony that after the election Horne, a one-armed man, said that he could steal more votes with one arm than the other boys could with two and that the election officials at the box in question “didn’t count the votes, they just estimated them.”

In determining whether this testimony was sufficient to make a prima facie case we have no controlling precedent in this state. The decisions elsewhere range from one extreme to the other. Some jurisdictions hold that a recount should be granted almost as a matter of course, others that one should be granted if the applicant shows a reasonable basis for doubting the accuracy of the original returns, and still others that no recount is to be allowed unless the losing candidate proves that the result of the election will be changed in his favor.

The third view seems to us to be logically untenable, for the apparent loser does not need a recount if he has already shown himself to have really been the winner. It may be observed in passing that some courts, in putting obstacles in the way of a recount, stress the importance of preserving the secrecy of the ballot. Free v. Wood, 137 Kan. 939, 22 P. 2d 978; Markowsky v. Newman, (Tex. Civ. App.) 138 S. W. 2d 896. This consideration is entitled to little weight in Arkansas, for our system of having separate ballot-stubs allows the original ballots to be reexamined without a disclosure of how each person voted. See Ark. Stats. 1947, Title 3, Ch. 8.

It seems evident that not all applications for a recount stand upon the same footing. Whatever may be the rule in some situations, we are of the opinion that an exceptionally strong case is made when the losing candidate proves that an election judge bet on the outcome, in violation of Ark. Stats., §§ 3-704 and 3-1516. That a judge should have a financial interest in the matter to be determined is contrary to the simplest conception of justice. It is no answer to say that there were other election officers at the polling place, who are not shown to have violated the law. By analogy, nine jurors may return a verdict in a civil case, but we would not for that reason uphold even a unanimous verdict if it were shown that one juror had a pecuniary interest in the outcome of the case.

The point is this: If a partisan election official has in fact succeeded in miscounting the votes to the advantage of his favorite, the other candidate is ordinarily helpless to expose the wrong except by means of a recount. A case in point is Meriwether v. Stanfield, (Tex. Civ. App.) 196 S. W. 2d 704, where an election judge had bet on the winning candidate. In answering the argument that the contestant should have been required to show what specific ballots had been falsely tabulated the court reasoned: “ [W]e hold that it was impossible for the contestant to allege what individual voters ’ ballots had been miscalled in time to have made a definite pleading thereof in his petition. Such matters are obviously beyond the knowledge of anyone except the election judge himself. We believe that for the courts to require the contestant in an election contest, before being heard on his petition, to allege specifically the ballots which had been miscalled to his disadvantage would amount to denying to a contestant and to the voters themselves protection from dishonest election judges.”

There is no merit in the suggestion that the granting of a recount would violate the rule that the voters are not to be disfranchised by the misconduct of an election official. Henderson v. Gladish, 198 Ark. 217, 128 S. W. 2d 257. To the contrary, if errors are disclosed by the recount it actually gives effect to the will of the electorate by correcting the returns to speak the truth.

II. The complaint alleged that ft. L. Wrape, Sr., had voted twice, for Brown, and that both his votes should be cast out. No proof upon this issue was offered by either side until the plaintiff’s rebuttal, when he seems to have attempted to change his position and prove that there were two R. L. Wrapes and that both votes were valid. The court rejected this offer of proof, as not being proper rebuttal. Both the votes were cast out, which was the relief that the complaint had sought. We do not find in the appellant’s abstract any statement that the Wrape votes were actually cast for Wood, nor any indication that this information is to be found in the record. We are thus not in a position to say that the appellant was adversely affected by the trial court’s ruling.

III. By cross-complaint Brown challenged the vote of L. J. Dowdy, who had voted in the wrong precinct. At the trial it was impossible to identify Dowdy’s ballot, as his ballot-stub could not be found. In the circumstances the court properly permitted Dowdy to waive the secrecy of his ballot and state which candidate he voted for (it was the appellant). When the ballots are not available the electors may be called to testify for whom they voted. Dixon v. Orr, 49 Ark. 238, 4 S. W. 774, 4 A. S. R. 42.

IV. The complaint attacked the vote of Jerry Jones on the ground that he had not paid his poll tax. This objection was met by proof that Jones was a maiden voter, entitled to vote without a poll tax receipt. It is now argued that Jones improperly cast an absentee ballot, as it turned out that he was not unavoidably absent from his precinct on election day. This issue is presented too late, being raised for the first time on appeal and long after the time for filing a complaint in an election contest. Angelletti v. Angelletti, 209 Ark. 991, 193 S. W. 2d 330; Wilson v. Ellis, 230 Ark. 775, 324 S. W. 2d 513. The same reasoning applies to the appellant’s belated challenge to W. R. Sanders’ vote.

V. The trial court erred in counting, for Brown, the maiden vote of Eugene Penney, since his affidavit of age, required by statute, could not be found. Ark. Stats., § 3-227; Logan v. Moody, 219 Ark. 697, 244 S. W. 2d 499.

VI. The appellee questioned the votes of Dwight Pranger and his wife and at the trial proved that the couple had been living in St. Louis, Missouri, for nine years before the election. The appellant now complains of the court’s refusal to allow him to show that Pranger had a subjective intent to maintain his residence in Greene county, Arkansas. For the reasons stated in Part IV of the opinion in Harris v. Textor, also decided today, the proffered proof would not have established the Prangers ’ right to vote in Greene county.

(This opinion, on rehearing, supersedes the original opinion delivered on June 4,1962, 235 Ark. 258.)

Beversed and remanded for further proceedings with respect to Box 2 in Ward 2.

McFaddin, J., dissents.

Ed. F. McFaddin, Associate Justice,

(Dissenting). On June 4, 1962, this Court, by a four to three vote, affirmed the judgment of the Trial Court in this case. The Majority and Dissenting Opinions of June 4,1962 may be found in 235 Ark. 258, et seq.; and the basis of such Majority Opinion was that the proof offered by the contestant as to Box 2 of Ward 2 was not sufficient to support the allegations contained in the contestant’s complaint, or to obtain a recount of the votes in said box.

A petition for rehearing was duly filed, but this Court was in summer vacation from June 4th to September 3rd. Now, the petition for rehearing has been heard and granted; the Majority Opinion of June 4th has been overruled ; the Circuit Court judgment has been reversed; and a new trial has been ordered in regard to Box 2 of Ward 2. In short, three of the Justices who voted for the Opinion of June 4th have changed their minds, as they have a perfect right to do. But before I prepared what was the Majority Opinion of June 4th, I read every word of the transcript and studied all of the applicable law. I still maintain that what was the Majority Opinion of June 4th was and is the correct rule of law on the facts.

So I dissent from the present Majority Opinion, which allows a recount of the votes in Box 2 of Ward 2; and I point to my then Majority Opinion of June 4th as containing all the reasons which support my present dissent.


author: George Rose Smith, J.

text:
    La. & Ark. Ry. Co. v. Ark. Commerce Commission.
    5-2694
    360 S. W. 2d 763
    Opinion delivered October 8, 1962.

      Hardin, Barton db Hardin, for appellant.
    No brief filed for appellee.
   George Rose Smith, J.

The appellant applied to the Arkansas Commerce Commission for permission to eliminate its station agent and to inactivate its depot at Taylor, Arkansas, asserting that this facility is being maintained at a loss. The commission denied the application, finding that the closing of the station would result in undue inconvenience to the public in western Columbia county and would be contrary to the public interest. The circuit court affirmed the decision. The main question is whether the commission’s conclusion is against the weight of the evidence.

Taylor, a city of about 700 people, is on the appellant’s line between Springhill, Louisiana, about seven miles to the south, and Stamps, Arkansas, about nineteen miles to the north. The train service at Taylor has consisted of one freight each way daily and one passenger train each way daily. In 1957 the station agent and depot were maintained at an expense of $4,770.09, while the revenue assignable to the station was only $1,847.72. In 1958 the expense was $5,483.50 and the revenue $3,433.36. These are the only two years for which the appellant introduced evidence pertaining to its operations at Taylor.

Some 3,000 people within a six-mile radius of the community are served by the business houses at Taylor. These establishments include several grocery stores, a hardware and furniture store, a cleaning and pressing shop, cafes, barber and beauty shops, insurance agencies, a drugstore, a recreation hall, and municipal buildings. The merchants are dependent upon the appellant for common carrier service, for the town is not served by any truck line.

If the present application should be granted the city would still be served by rail, but the depot would not be an active facility. Incoming carload shipments could be unloaded by the consignees, as has been the practice in the past. Less than carload lots would have to be picked up by the consignees at Springhill. For outgoing freight the shipper would have to arrange, by a collect telephone call to Springhill, for cars to be spotted at Taylor and for the necessary shipping documents to be dropped off by the conductor upon one of the daily trains. The shipper would not only have to load the car, as in the past, but also have to seal it. There would be no station agent to sell passenger tickets, issue bills of lading, supply information, and perform many other duties. It is quite evident that the proposed do-it-yourself freight service would be decidedly inconvenient to the railroad company’s patrons at Taylor.

In a case of this kind, where substantial losses are resulting from the operation, the question is whether that economic waste outweighs any public benefit or convenience. Chicago & N.W. Ry. Co. v. Mich. P.S.C., 329 Mich. 520, 45 N.W. 2d 520. As the court pointed out in that case the factors to be considered include the character and population of the territory being served, the public patronage or lack of it, the facilities remaining, and the operations of the carrier as a whole.

‘ ‘ Another statement of the principle is that although the operation of the entire system yields a net profit, the loss resulting from the maintenance of a certain service on a particular branch must be of sufficient importance to outweigh the inconvenience which the public will suffer as a result thereof.” Alabama P.S.C. v. Atlantic Coast Line R. Co., Ala., 45 So. 2d 449.

In the case at bar we cannot say that the findings of the commission, a specialized and informed tribunal are against the weight of the evidence. It cannot be doubted that the public would be greatly inconvenienced by the withdrawal of depot service at Taylor. In addition to mere inconvenience there is proof that the cessation of the existing service will adversely affect the economic growth of the community. Taylor has been a growing city; its future is bright. If, however, it no longer has access to good railway service its ability to attract new industry and to continue its progress will, according to the testimony, be substantially impaired.

The applicant’s proof is not as comprehensive as it might be. There is no evidence about the financial situation of the company as a whole; so we cannot say whether it is seriously affected by the comparatively small annual loss at Taylor. Moreover, the proof relates to two years only. The net loss in 1958 was much smaller than that in 1957; the prospects for future improvement may be excellent. On the whole case we do not feel justified in declaring that the commission was required by the preponderance of the evidence to grant the application for a reduction in service.

Inasmuch as the proof establishes the reasonableness of the commission’s order, there is no merit in the appellant’s contention that its property is being arbitrarily taken without due process of law, in violation of the Fourteenth Amendment.

Affirmed.


author: Paul Ward, Associate Justice.

text:
    Lusby v. Herndon.
    5-2708
    361 S. W. 2d 21
    Opinion delivered October 8, 1962.

      Robert W. Henry and Yingling, Henry & Boyett, for appellant.

      Lightle & Tedder, for appellee.
   Paul Ward, Associate Justice.

This litigation is between adjoining landowners over a road which the parties (and their predecessors in title) and the public had (at various times) used over a period of some fifty years. Appellants closed the road (by erecting gates and fences) and appellees brought suit in chancery to prohibit appellants from doing so. In appellants ’ answer they admitted erecting fences across the road, but denied the said road was a public road. They stated also that appellees were estopped from claiming a right to nse the road since they had deeded the land (where the road was located) to appellants.

The chancellor held that the road had been abandoned as to the public but ordered appellants to maintain two gates so that appellees, Browning and Herndon, could use the road, and he gave appellants judgment for damages in the sum of $200 against those two appellees. Title to the roadway was quieted in appellant, Lusby. Appellants have appealed and appellees have cross-appealed.

In order to understand the issues hereafter discussed it is necessary to give a general summary of the factual background.

Appellant, Lusby, owns the southeast quarter of Section 20, Township 7 north, Range 10 west, having bought the land in 1955 from appellant, Nolen Troxell, who now holds a mortgage for a portion of the purchase pi-ice. Appellee, Sanders, owns the southwest quarter of Section 21, lying on the east side of Lusby’s land, and also owns lands on the north side. There is a public road (Romance Road) running east and west a short distance north of the center of Sections 20 and 21. There was an old community road which ran from the public road south along the section line between the two landowners, thence south to the Red Hill Community. Appellees claim this road is still open to them and the public. Appellee, Browning, owns fifty acres just south of (and adjoining) Sanders’ land, but the west line of Browning’s land is five chains east of the section line, i.e. east of the old road in controversy. Herndon’s land joins Browning’s land on the south, and the west line is likewise five chains east of the road. Appellant, Troxell, is a party merely because he holds the mortgage on Lusby’s land.

One. We hold the chancellor was correct in finding the old community road had been abandoned as a public highway. It clearly appears that for many years, until about 1945 or 1950, the public did travel the road (A to C on map) which appears to have been rough and unimproved. On the other hand, the weight of the testimony shows that Lusby and his predecessors had maintained fences or gates across the road for more than seven years before this suit was filed. That being true it must be legally presumed that when any member of the public traveled the road during that period he did so by permission. See: Porter v. Huff, 162 Ark. 52, 257 S. W. 393.

Two. The chancellor erred in quieting title in Lusby to that portion of the road (A to B on map) which is situated on Sanders ’ land. Lusby claims this portion of the road by virtue of a warranty deed executed in 1945 by Sanders to one Seats who was then the owner of the Lusby land. This deed purported to convey a strip of land one rod wide ‘ ‘ for road purposes only. ’ ’ This being true, the use of this strip of land for a roadway by Seats, Troxell, and Lusby was permissive and would remain so for seven years after Sanders had notice to the contrary. No such notice appears in the record. See: Dial v. Armstrong, 195 Ark. 621, 113 S. W. 2d 503; Britt v. Berry, 133 Ark. 589, 202 S. W. 830.

Three. It follows from what we have previously said that Sanders has a right to use the road (A to B on map) and the chancellor, for that reason, was justified in requiring Lusby to maintain gates for that purpose. By the same token it was error to require Lusby to maintain gates for the sole benefit of appellees, Browning and Herndon. Their land was at least a half-mile away from the land conveyed to Seats by Sanders, and they show no privity of interest with Sanders. If these appellees have no way of ingress and egress to and from their lands their remedy is to apply to the county court in accordance with the applicable statutes.

Four. The chancellor ordered Browning and Herndon to pay Lusby $200 as damages for destroying Lusby’s fences and gates across the road. That the fences and gates were destroyed is not denied, but appellants say the amount awarded is inadequate. On this point we think the record sustains appellants.

Lusby testified one gate was broken down and the chain and lock were broken; the fences were cut to pieces, torn to pieces, and the posts pulled up; the guy wires on the fences were cut; some terraces were damaged; and the total cost of repairs will be $400. None of this testimony is denied by Browning and Herndon. Their main defense is based on the alleged right to the use of the road, and not to the amount of damage done. Both sides recognize that the testimony of Lusby, an interested party, is not regarded as uncontradicted. However this testimony was positive and undenied, and we know of no contradicting fact or circumstance in the record. Consequently we are bound to say the weight of the evidence sustains a finding that Lusby has been damaged in the sum of $400, and we so find.

The decree of the trial court is affirmed in part and reversed in part to the extent heretofore indicated, and the cause is remanded for entry of a decree in accordance with this opinion.

Affirmed in part, reversed in part, and remanded.


author: Sam Robinson, Associate Justice.

text:
    Pendleton v. Stuttgart and King’s Bayou Drainage and Irrigation Dist. No. 1.
    5-2684
    360 S. W. 2d 750
    Opinion delivered October 8, 1962.

      Paul B. Pendleton and William G. Daviss, for appellant.

      Cecil G. Matthews and George E. Pike, for appellee.
   Sam Robinson, Associate Justice.

During 1911 there were created in Arkansas County two drainage districts —King’s Bayou Drainage District and Wulff Drainage District; Wulff Bayou drains into King’s Bayou. The districts are contiguous and extend from the City of Stuttgart to some 12 miles south. The districts accomplished the intended purposes and for a long time have been inactive and dormant; no drainage taxes having been levied for many years. No work has been done in either district since 1935; however, neither district has been formally dissolved.

In 1959 a new district, to be known as the ‘ ‘ Stuttgart and King’s Bayou Drainage and Irrigation District, ” was proposed. In this connection a petition was filed in the Arkansas Chancery Court asking that the Court establish a drainage and irrigation district embracing certain described lands, including most of the land in the old King’s Bayou District and some of the land embraced in the Wulff District. The petition was granted and the remonstrants have appealed.

First, appellants contend that the plan of the proposed district does not meet the requirements of the statute under which such district is being formed; that the order authorizing the formation of the district is not supported by a preponderance of the evidence, and that there is no substantial evidence to sustain the order.

The new district was organized by authority of Act 329 of 1949, as amended by Act 171 of 1957. Section V of this Act (Ark. Stats. 21-905) sets out the necessary requisites for the formation of a district under the Act. It appears that the Act was fully complied with.

Appellants strongly argue that there is no showing that the project is feasible. Those petitioning for the formation of the district secured an order of the Court appointing an engineer. The engineer provided the required bond; made a survey and ascertained the limits of the region that would be profited by the proposed improvement ; made his report giving a general idea of the character and expense, and made suggestions as to the proposed improvements and their location. Mr. Fricke, an engineer employed by appellants, testified that the preliminary data is sufficient to let a contract and complies with all requirements.

Appellants contend that the estimated cost of the improvements does not take into consideration the cost of the right-of-way, and that such cost will be $19,000.00. Even if the right-of-way costs that amount it would not render the project unfeasible. Twenty-six thousand acres of rich land are in the new district and the total cost of the improvements is estimated to be $71,032.80. Ark. Stats. 21-905 provides that the petition for the formation of a district shall contain “the estimated cost of the project as then estimated by those filing such petition from such information as they may have at that time, with reasonable detail and definiteness in order that the court may understand therefrom the purpose, utility, feasibility, and need or necessity therefor.” Although the improvements may cost $19,000.00 above the estimate, it would not be such a great difference as to be unreasonable and not in conformity with the estimate.

It is argued that the trial court erred in not removing from the petition the names of Billy J. Burkett and H. H. McCauley. Without their land the petition would not represent the majority necessary for the formation of the district. Appellants rely on Mahan v. Wilson, 169 Ark. 117, 273 S. W. 383, but in that action, a drainage district case, the Court held that the signers of a petition for the formation of a district could not withdraw their names, except for cause, after the filing of the petition. In Echols v. Trice, 130 Ark. 97, 196 S. W. 801, the Court held that the only valid reason for removing a name from a petition is some good reason that will justify the change in the attitude on the part of the petitioner, such as fraud, deceit, misrepresentation, duress, etc. In their motion asking that their names be removed from the petition, Burkett and McCauley state: “That, at the time Movants signed said petition, they did so under a misapprehension and misunderstanding of the project, insofar as the type of work; the amount thereof, the complete and total cost thereof, the lands to be included in said proposed district, the complete and total cost per acre as it affected Movants land, and the mode of payment therefor, and Movants here and now state to the Court that, if they had a complete understanding of the above details of said proposal, they would not have signed the same, and are now most unwilling to have their names included on said petition.” No fraud, duress, deception, or anything of that kind is alleged.

The petition for the formation of the .district was filed December 17,1959. Subsequent to. that time a great deal of work was done and expense incurred in connection with the project. A lengthy trial was had in which all of the issues were fully developed. The trial ended on March 7, 1960; the case was closed on May 12, 1960; and it was not until May 27, 1960 that Burkett and McCauley asked the Court to remove their names from the petition. In view of all the circumstances, the Court committed no error in denying the motion.

It is next argued by appellants that the trial court erred in ordering lands and improvements already in Wulff Drainage District.included in the new district. The inclusion in a new district of lands already in an existing district has been approved several times. Keystone Drainage District v. Drainage District No. 16, 121 Ark. 13, 180 S. W. 215; Lee Wilson & Co. v. Compton Bond & Mortgage Co., 103 Ark. 452, 463 S. W. 110. In. the last case the Court said: ‘‘It is also urged that one tract of land included in this drainage district was located in another drainage district, and was therefore not subject to an assessment in this district, which, it is claimed, would be making a double assessment upon this land for drainage purposes. But this question involves solely the amount of the benefit which such land receives from the drainage system within this district, and with which it should alone be charged. It does not involve the power to include this land within the drainage district. The land may be benefited by both drainage districts.”

Appellants cite Sembler v. Water & Light Imp. Dist., 109 Ark. 90, 158 S. W. 972, but there the question was whether or not a new district could take over property belonging to an old district. This involved the transfer of title to property — a water and light plant, etc., and the Court held that the statutes did not provide for the acquisition of property of the old district by the new district; but the Court said: ‘ ‘ The fact that part of the territory embraced in the new district is already covered, and the property therein assessed for the construction of the old water and light plants, affords no reason why it cannot, be embraced in a new district covering a broader territory if additional benefits accrue to the property in the old district.”

But appellants maintain that since the adoption of Act 180 of 1927, lands in an existing drainage district cannot be taken into a new district. Act 180 of 1927 is entitled “An Act to Provide for Adding to Drainage Districts Lands which have been actually Drained into the Ditches of such Districts Where Lands so Added Are Not in any other Drainage District. ’ ’

The preamble to this Act provides: “WHEREAS, into the ditches of some drainage districts of the State, after the ditches were completed, other lands have been drained by digging private ditches, thereby draining sloughs, marshes and lakes that could not otherwise be drained, and WHEREAS, in certain instances, sanitary sewer lines have made use of such drainage ditches to procure an emptying outlet, thereby saving the sanitary sewer district large sums of money, and WHEREAS, it is right and just that such lands as make use of and are benefited by such drainage ditches of any such drainage districts should stand their just portion of the costs of the construction and maintenance of such drainage ditches in proportion to the benefits received. ’ ’

Section I provides: “Where any slough, marsh or lake has been drained into the drainage ditches of any drainage district which has completed its work of construction, lands benefited by the drainage of such slough, marsh or lake may be added to such drainage district in the manner provided by Section 3 of this Act; but in no case shall lands paying taxes in another drainage district be added to any drainage district under the provisions of this act, and in no case shall lands, lots or blocks already in a drainage district be in any way affected by the provisions of this act.”

Appellants contend that Section I of Act 180 of 1927 prohibits the inclusion in the new district of lands already in King’s Bayou and Wulff Districts. Section I of Act 180 has no application whatever to the situation existing between the King’s Bayou District, the Wulff District, and the new district. It is perfectly clear from Act 180 that the purpose of Section I is to prevent owners of sewer lines, sloughs, marshes and lakes, from making use of the drainage district’s improvements without just compensation. Moreover, Section I of the Act applies only to lands added to an existing district under the provisions of the Act. The new district is not formed under the provisions of Act 180 of 1927; it is created under the provisions of Act 329 of 1949, as amended by Act 171 of 1957.

Appellant’s fourth proposition is that the court erred in including the lands of Georgia Pendleton, Hugh Partridge and Harold Partridge in the new district. It is claimed that the lands of these parties will receive no benefits from the proposed improvements. True, the trial court found that the lands in question would receive no direct benefits, but the court also found that the lands would receive indirect benefits. In Memphis Land & Timber Co. v. St. Francis Levee District, 64 Ark. 258, 42 S. W. 763, the Court said: “And the lands above overflow would be increased in value by reason of changes made in their surroundings. ’ ’ In Carson v. St. Francis Levee District, 59 Ark. 513, 27 S. W. 590, the Court said: “A tract within the District may be above overflow without the levee and yet in various ways be greatly benefited by the levee.” To the same effect is Oats v. Cypress Creek Drainage District, 135 Ark. 149, 205 S. W. 293.

Of course the entire situation will be taken into consideration in the assessment of benefits. In an excellent opinion, the trial court said: “The evidence reflects that all of the protesting Petitioners are in close proximity to the King’s Bayou Ditch and that they will receive indirect benefits as a natural result of the proposed improvements to this district. Certainly, to paraphrase from the Lessenberry case (Lessenberry v. Little Rock-Pulaski Drainage District, 211 Ark. 1046, 204 S. W. 2d 554) the proposed improvement is one in which all the landowners within the territory of the proposed District have, to a certain extent, a common interest, and the improvement cannot be accomplished effectively without the help of all within the area.”

Affirmed.


author: Jim Johnson, Associate Justice.

text:
    Simmons v. Murphy.
    5-2744
    360 S. W. 2d 765
    Opinion delivered October 8, 1962.

      Bruce Bennett and Mahony & Yocum, for appellant.

      J. 8. Brooks and Spencer & Spencer, for appellee.
   Jim Johnson, Associate Justice.

This is an action by appellant, J. A. Simmons, against appellee, Marie Murphy, seeking to set aside and cancel a warranty deed which was executed and delivered by appellant to appellee on August 18, 1958, and recorded on February 2, 1959, purporting to convey certain lands in Union County. The complaint admitted that appellant executed the deed here in question, but alleged inter alia that appellant was ill and afraid he was going to die, and made the deed intending only to convey title to appellee in event of his death. Appellee answered, pleading inter alia that the deed was made and delivered with no reservations or conditions, either express or implied. The trial court held that appellant failed to sustain the burden of proof and dismissed the cause for want of equity and quieted and confirmed title to the land in the appellee as against all claims of appellant. This appeal followed.

For reversal, appellant contends the trial court’s finding that the deed was delivered within the meaning of the law is not sustained by the evidence.

Appellee is the niece of appellant’s first wife. Following the death of appellee’s mother, when appellee was about one year old, she and her three sisters were taken into appellant’s home and raised as his own children. The record is replete with testimony of appellant’s goodness to appellee and her sisters over a long period of time. His kindness is not in issue. The question in issue is whether appellant proved there was no delivery of the deed.

From appellant’s own testimony, he had drawn many deeds over a period of 45 years for himself and his employers. He had purchased some 40,000 to 50,000 acres of land, 250 million feet of timber, 2,000 acres of mineral rights, 15,000 acres of oil and gas leases, and he had also prepared leases and deeds for friends and neighbors “numbers and numbers of times.” He testified that he had drawn “numbers” of deeds containing conditions, exceptions and reservations, and that the deed to appellee contained none. From a reading of the testimony, appellant obviously has a thorough understanding of deeds and property transactions.

There is evidence that shortly after the death of appellant’s first wife, he told appellee and her sisters that he wanted to deed the “home property” to them or to some of them. The deed was prepared at appellant’s direction. He executed it, had it acknowledged, and manually delivered the deed to appellee, without any words or acts indicating any reservations or restrictions. Some months after the conveyance appellee had the deed recorded.

There is evidence that appellant was a sick man about the time he made this deed, but there is also evidence of mineral deeds negotiated, prepared and recorded at this same time, in the furtherance of appellant’s usual business.

Subsequent to the execution and recordation, appellant leased the property from appellee at a time when apparently he was no longer sick nor afraid he was going to die but in fact was preparing to remarry. He drafted and signed a rental contract in which appellee is named as owner of the property, and actually paid rent for seven months. Both appellant’s and appellee’s acts arc consistent with a completed delivery — appellee paid taxes and insurance on the property, and lived there until appellant’s remarriage. Now, some two years after the conveyance, appellant claims there was no delivery.

In the Chancellor’s detailed and cogent opinion, he stated:

“In the case at bar, plaintiff (appellant) alleged and so testified that he was in ‘very bad health’ and was afraid he was going to die when he made and delivered the deed to her, ‘intending for title to pass to her in the event that death ensued such illness.’
“It must be noted, however, that plaintiff (appellant), did not allege nor did he testify that defendant (appellee) was aware of any mental reservations, nor did he testify that he told her of such intention or that there was any reservation on his part.”

As stated in 26 C. J. S. at page 681:

“A mental reservation contrary to the grantor’s expressed intention to convey title, or a subsequent change of intention, does not destroy the effect of a completed delivery. ’ ’

This court has consistently held that in a proceeding to cancel a solemn deed, on the theory of nondelivery or otherwise, the quantum of proof required must rise above a preponderance of the testimony: it must be clear, cogent and convincing. Stephens v. Keener, 199 Ark. 1051, 137 S. W. 253.

While there was testimony elicited from appellee on cross-examination tending to show that she was somewhat confused as to when she thought legal title passed, and that she had knowledge of appellant’s intention to remarry prior to the recordation of the deed, and further evidence that in the course of appellant’s vast real estate transactions title to various properties was, from time to time, placed in her name as a “straw” title-holder for the convenience of appellant, we cannot, from the record before us on trial de novo, in the instant case, say that the learned Chancellor was wrong in concluding that appellant failed to produce the quantum of proof required to set aside the deed.

Affirmed.


author: Neill Bohlinger, Associate Justice.

text:
    Hargett v. Miller.
    5-2746
    361 S. W. 2d 83
    Opinion delivered October 8, 1962.
    [Rehearing denied November 12, 1962.]

      Melvin E. Mayfield and W. A. Speer, for appellant.

      Mahony $ Yocum, for appellee.
   Neill Bohlinger, Associate Justice.

This ease involves an accounting between two partners, E. W. Hargett, the appellant here, and Dr. J. W. Miller, who is the appellee. The partnership was formed for the purpose of erecting and operating a motel at Lake Village, Arkansas.

Sometime prior to June, 1955, the appellant had procured a verbal option on a piece of property upon which he desired to erect a motel. He cleaned off the property and poured the footings for the building but being unable to exercise his option or erect the buildings, he formed a partnership with his brother-in-law, the appellee, for the accomplishment of these purposes.

Thereafter the parties decided to finance the venture by borrowing $30,000.00 from a bank in El Dorado and to this end the appellee made a note for $21,000.00 secured by a mortgage on property owned by him, and the appellant, Mr. Hargett, made a note for $9,000.00 secured by property owned by him and each partner signed the other’s note.

There seems to have been no written agreement between the parties but it was agreed that Mr. Hargett would build the motel and operate it when finished. The appellee, Dr. Miller, was to continue to practice medicine and pay a monthly installment of $825.00 on the indebtedness at the bank each month until the motel was in operation and funds were thereby in hand to make the monthly payments and Dr, Miller would be reimbursed, as the conditions at the motel permitted, for the monthly payments he had made. In due time the motel was constructed and opened for business with 12 units and later 8 additional units were built.

In June, 1957, the motel was sold for $120,000.00 and with that money in hand the partners paid off the balance of the loan at the bank in El Dorado in the sum of $11,920.80, reimbursed Dr. Miller, the appellee, the monthly loan payments made by him and discharged an obligation of the partnership to Mr. W. C. Lovett in the sum of $53,417.75. The parties to the partnership were unable to agree as to the division between them of the remaining money. The appellant contended that he was (a) entitled to reimbursement for his expenditures, prior to the partnership, in preparing the property which the partnership took over, (b) and further that he was entitled to be paid for the expense of operating his personal truck while using it in the construction and operation of the partnership’s business, (c) that he was entitled.to compensation for the work and labor performed by him after the formation of the partnership in the construction of the 20 units which comprised the motel, (d) and that the appellee, Dr. J. W. Miller, was not entitled to interest on the monthly payments made by him to the First National Bank of El Dorado where the original loan for the partnership was procured.

The solution of the problems presented here has been hampered at every stage by an absence of records, or inadequately kept records, but through many days of trial, which dealt in large part with minutia, the learned chancellor has ably stated an account between the parties hereto.

The appellant contends, however, that the court erred in holding that he was not entitled to reimbursement for his expenditures prior to the formation of the partnership. On that point we agree with appellant. There is testimony that the appellant spent $2,398.96 preparing the lots for the motel and starting the foundations. This was work which was necessary for the purposes of the partnership and had it not been done then, it would have to have been done subsequently and the partnership would have borne that cost in any event. Since it was cash expended for the partnership, the appellant is entitled to one-half of the $2,398.96, or $1,199.48. Ark. Stats. (1947) Anno., § 65-118: “(a) Each partner shall be repaid for his contributions, * *

On his second point the appellant contends that he was entitled to payment for the expenses of operating his personal truck while used in the construction and operation of the partnership business and for the depreciation of same while so used. On this point we do not agree. On appellant’s point three which is that the trial court erred in holding that the appellant is not entitled to compensation for the work and labor performed by him after the formation of the partnership in the construction of the original twelve units and the additional eight units, we do agree.

The use of appellant’s truck and the time for his labor are well covered by § 65-118, Ark. Stats, cited su-pra, sub-paragraph (f): “No partner is entitled to remuneration for acting in the partnership business, ...” Hargett was acting in the partnership business and, in the absence of an agreement to the contrary, is not entitled to payment either for the use of his truck or for his personal time.

Appellant further urges that the trial court erred in holding that the appellee, Dr. J. W. Miller, was entitled to interest on the payment of the monthly installments by him to the First National Bank on the obligation of the partnership. In this he is correct. Under the Uniform Partnership Act, § 65-118, cited supra, sub-paragraph (d) provides: “A partner shall receive interest on the capital contributed by him only from the date when repayment should be made.”

The original agreement was that Miller would be repaid when the business of the motel would produce enough money for that purpose. That time does not appear to have arrived, but the motel was sold and that was the time for Miller to be, and he was, paid. Hence no interest on his monthly payments to the bank should have been allowed.

Taking the excellent compilation of the learned chancellor, we have amended it in conformity with the conclusion cited supra and it now appears in this form.

Sale price of Motel $120,000.00

Cash in cash drawer (admitted by Hargett) 300.00

Cash in cash drawer (additional amount found by chancellor from testimony) 2,035.39

A — TOTAL ASSETS OF PAETNEESHIP $122,335.39

Payments from Assets:

(1) To Lovett in discharge of loan 53,417.75

(2) To Bank in discharge of loan 11,920.80

(3) To Hargett in additional salary 2,219.91

(4) To Miller, reimbursement for loan payments and other advances 20,875.00

(5) To Miller, interest on advances beyond capital 92.23

(6) Cash paid for property improvement by Hargett (capital contribution) 2,398.96

B — TOTAL OBLIGATIONS............................................. 90,924.65

C — BALANCE TO DIVIDE............................................. 31,410.74

D — AMOUNT DUE EACH PARTNER FROM BALANCE............................................................$ 15,705.37

Amount due Miller from above calculation:

(4) Reimbursement for loan payments and other advances $20,875.00

(5) Interest on advances beyond capital 92.23

(D) Amount due Miller from balance 15,705.37

E — TOTAL DUE MILLER .............................................$ 36,672.60

Amount in Miller’s possession 36,912.25

F — OVERPAYMENT TO MILLER........................$ 239.65

Amount due Hargett from above calculation:

(3) Additional salary $ 2,219.91

(6) Cash paid (capital contribution) 2,398.96

(D) Amount due Hargett from balance 15,705.37

G — TOTAL DUE HARGETT..........................................$ 20,324.24

Amount in Hargett’s possession 20,084,59

H — BALANCE DUE HARGETT..............................$ 239.65

It thus appearing that appellant, Hargett, is entitled to recover the sum of $239.65 from appellee, Miller, judgment here is rendered in that amount. The appellant will also recover his costs.