author: J. Fred Jones, Justice. Conley Byrd, Justice,

text:
    AMERICAN PIONEER LIFE INSURANCE COMPANY v. Jean TURMAN, Administratrix of the Estate of William H. ADAMS, Deceased
    5-6179
    495 S.W. 2d 866
    Opinion delivered May 14, 1973

      Frierson, Walker, Snellgrove dr Laser, for appellant.

      Pearson dr Parker, for appellee.
   J. Fred Jones, Justice.

This is an appeal by American Pioneer Life Insurance Company, hereinafter called American, from a circuit court judgment in favor of Jean Turman, administratrix of the estate of William H. Adams, in a suit by the administratrix to recover on a credit life insurance certificate issued on the life of Adams.

The facts appear as follows: Mr. Adams was engaged in the business of farming and did business with the Mercantile Bank of Jonesboro. American had issued to the bank a master policy of group credit life insurance insuring the bank against nonpayment of loans made by the bank to its customers. Under the terms of the master policy the bank was authorized to issue certificates of insurance to individual borrowers on printed forms furnished by American. American also furnished to the bank printed “proofs of death” forms in duplicate; one was to be filled out and signed by the claimant, and the other was to be filled out and signed by the attending physician. In the process of making and insuring a loan, the bank would charge and collect an insurance premium from the borrower, then deduct its agent’s commission from the premium and deposit the remainder to the account of American. In other words, the bank made loans to customers and then, as agent for American, it sold life insurance to the borrowing customers in the amount of the loan with death benefits payable to the bank.

On February 16, 1971, Mr. Adams obtained a crop loan from the bank in the amount of $4,750 for a period of 12 months, and a certificate of insurance was issued insuring his life in the amount of the loan for a period of 12 months with the bank as beneficiary. In accepting the certificate of life insurance, Mr. Adams signed a provision on the certificate representing that on that date he was in good and sound health. On April 26, 1971, Mr. Adams died as a result of stomach cancer and on June 16, 1971, the bank made claim against American for the insurance proceeds and submitted “proofs of death” forms completed and signed by its vice-president for the claimant bank and by Dr. H. W. Keisker as Mr. Adams’ attending physician. American refused to pay the bank contending that Mr. Adams falsely represented in the certificate that he was in good and sound health when the certificate was issued, and for that reason the insurance on the life of Mr. Adams was ineffective.

The loan to Adams was evidenced by a promissory note co-signed by his son who farmed with him. After Mr. Adams’ death and American had denied the claim made by the bank, the widow of Mr. Adams repaid the bank loan, and his daughter, as administratrix of his estate, filed suit against American claiming the full face value of the insurance for the estate as secondary beneficiary. At the close of the evidence before the jury, both sides moved for a directed verdict, whereupon the trial court dismissed the jury and tried the case as to the facts and the law. The trial court rendered judgment in favor of the administratrix of the Adams estate in the amount of $4,750 together with costs, penalty and attorney’s fees.

On appeal to this court American contends that the trial court erred in denying its motion for a directed verdict, and that the trial court erred in refusing to receive in evidence the certificate of the attending physician filed as a part of the proofs of death.

In the complaint filed by the administratrix a copy of the insurance certificate was attached and the complaint alleged the issuance of the policy and certificate with the bank as beneficiary, but providing that if the indebtedness to the bank had been paid the beneficiary should.be the estate of the insured. The complaint then alleged that American promised to pay $4,750 if the insured should die within a period of 12 months from the date of the application. Paragraph 4 of the complaint alleged that on April 26, 1971, while the policy was in effect, Mr. Adams died under such circumstances as to come within the promises and undertakings of the policy, and to render American liable to pay to the plaintiff as beneficiary the sum of $4,750. The complaint then alleged that proof of death was filed with American by Carey Smith, Vice President of the bank, and American refused to pay the claim.

In American’s answer it narrowed the issues to some extent by admitting all the allegations in the complaint except those in paragraph 4. As affirmative defense American alleged as follows:

“Defendant states that the policy of insurance sued upon was procured by the insured, William H. Adams, by means of a false and fraudulent misrepresentation of the state of his health in that the insured in his application stated that ‘I am in good and sound health,’ which statement was knowingly false in that the applicant was then suffering from cancer which caused his death less than three months- after the date of issuance of the policy, for which disease he. had previously undergone surgery and was then taking medication and was under the treatment of a physician. The policy was issued by the defendant in reliance upon the said representations, which were knowingly false and made .by the insured with knowledge of their falsity. As a result thereof, the said policy was void.”

As soon as the issues, were thus joined, the appellee served notice on the appellant that she would claim the medical privilege under Ark. Stat. Ann. § 28-607 (Repl. 1962).

The certificate issued on the life of Mr. Adams certified that under and subject to the terms and conditions of the master policy issued to the bank, Mr. Adams was insured “subject to the terms and conditions listed on the reverse side of this certificate and these terms and conditions are a part hereof as fully as if set forth on the face of this certificate.” The face of the certificate then contained the following pertinent provision over Mr. Adams’ signature:

“INSURED MUST SIGN BELOW IF THIS CERTIFICATE IS FOR $1,000.00 OR MORE
I accept the above certificate and the terms of the Master Group Credit Life Insurance Policy under which it is being issued and represent that on the date hereof I am in good and sound health and that a copy of this certificate has been this day delivered to me, and that on the date hereof I was indebted to the above named Creditor in an amount at least equal to the amount of insurance provided herein; and that group credit life insurance, including this certificate, in excess of $10,000.00 is not now in force on my life; and that I am now gainfully employed.”

The back side of the certificate bore language in part as follows:

“. . .If the person whose life is insured by this Certificate was not in good and sound health on the date hereof, the Company shall be liable only for the return of the premium paid hereon. * * *
Upon discharge of the indebtedness by prepayment, renewal, refinancing or otherwise, the insurance shall be terminated. In all cases of termination prior to scheduled maturity, a refund of any unearned amount paid by or charged to the debtor for insurance shall be made as follows. . . .”

Before the jury was discharged in response to the motions for directed verdicts, the trial court sustained the administratrix’s objections to the introduction into evidence of the master policy, the claimant bank’s statement in proof of death, and the doctor’s statement in proof of death. The death certificate was placed in evidence without objection.

Dr. Keisker signed the death certificate setting out the immediate cause of death as intestinal obstruction of three weeks duration due to generalized abdominal metastasis of unknown duration caused by adenocarcinoma of the stomach of 29 months duration. The death certificate also showed that Dr. Keisker attended Mr. Adams from January 27, 1969, to April 26, 1971, and last saw him alive on April 25, 1971. The physician’s statement signed by Dr. H. W. Keisker as a part of the proof of death but excluded from the evidence at the trial, stated that Mr. Adams died in St. Bernard Hospital in Jonesboro on April 26, 1971; that the immediate cause of death was intestinal obstruction which had existed for two weeks; that the date of onset of the first symptom or sign according to the clinical history was April 1, 1971, and the contributory cause of death was adenocarcinoma of the stomach which had existed for two years. In the physician’s statement under a request for particulars of each condition for which Mr. Adams was treated or advised prior to his last illness, Dr. Keisker stated that the disease or condition was adenocarcinoma of the stomach, first treated in January, 1969, and treated for a period of two years resulting in good palliation.

It was stipulated by the parties that Mr. Adams was attended by Dr. Keisker on February 18, 1969, February 19, 1969, March 26, 1969, and six more times during the next two years including February 22, 1971, March 22, 1971, and March 14, 1971, when he was admitted to the hospital in his terminal illness.

The record indicates that there may have been some in-chambers proceedings of which no record was made, but it appears that the administratrix was attempting to hold and restrict American to proof of actionable and knowledgeable fraud under its affirmative defense allegations, and at the same time deny American access to the testimony of Dr. Keisker, the only available witness who would know and could testify as to the extent of Mr. Adams’ knowledge of his condition when he stated he was in good and sound health. The record further indicates that because of limitations in its affirmative plea, American was restricted by the trial court in attempting to prove that Mr. Adams’ false statement was material to the acceptance of the risk or the hazard assumed, and that the certificate would not have been issued had the true facts been known.

Mr. Tice, secretary of American, testified that the certificate would not have been issued if Mr. Adams had not signed the statement that he was in eood health.

“Q. Mr. Tice, when we were interrupted, I started to ask you about the practice of the company. Now, in this certificate of insurance, which is Exhibit A, is the statement 'I represent on the date hereof I ani in good and sound health.’ Did the company rely on that statement to issue this certificate?
A. Yes.
Q. I believe you have already testified that was a requirement before they would issue the certificate?
A. Yes, sir.
Q. If it had not been signed, that would not have been issued?
A. That is correct, sir.”

The master policy was tendered in evidence under offer of proof. It contains separate right of cancellation and incontestable provision as follows:

" RIGHT OF CANCELLATION
The Company may cancel the insurance on the life of any Borrower five (5) days after written notice has been mailed the Creditor; however, the Company cannot cancel the Certificate after it has been in force for a period of sixty (60) days unless it is found to have been issued based upon fraudulent information.
INCONTESTABLE PROVISION
This Policy shall be incontestable; except for nonpayment of premiums after it has been in force for a period of two (2) years from its date of issue, and any Certificate issued hereunder shall be incontestable, except for non-payment of premiums after it has been in force for a period of two (2) years during the Certificate holder’s lifetime.”

The complaint alleged that the policy was in effect at the time of Mr. Adams’ death and there is no contention that there was ever any effort made to cancel it. Mr. Tice testified on direct examination as follows:

“Q. . . . [A]t any time within sixty days after you received that certificate, you might have canceled that policy on five days notice? Is that correct?
A. Yes, sir.”

And on cross-examination he testified as follows:

“Q. Mr. Tice, the policy has not been canceled as of this date, has it? The five days notice to the insured, so forth. It never has been canceled, has it?
A. No, sir.”

It is obvious, of course, that had American honored the bank’s claim when its statement and proofs of death were filed, the bank would have been obligated to apply the amount of the insurance on the debt owed by Mr. Adams, and to have paid any excess over to Mr. Adams’ estate. It is also obvious that had the bank filed suit to recover under the policy, the medical privilege would not have been available to it under § 28-607, supra, American offered into evidence the proof of death statement made by Dr. Keisker in support of its allegations that Mr. Adams knowingly and intentionally falsified the state of his health in procuring the insurance coverage. American also contended that the true state of Mr. Adams’ health was material to the acceptance of the risk and hazards assumed, and that the certificate would not have been issued if the true facts had been known. The administratrix successfully invoked the medical privilege in opposition to the doctor’s statement and contended that American .had not pleaded materiality under Ark. Stat. Ann. § 66-3208 (b) (Repl. 1966). Section 66-3208 is as follows:

“(1) All statements in any application for a life or disability insurance policy or annuity contract, or in negotiations therefor, by or in behalf of the insured or annuitant, shall be deemed to be representations and not warranties. Misrepresentations, omissions, concealment of facts and incorrect statements shall not prevent a. recovery under the policy or contract unless either:
(a) Fraudulent; or
(b) Material either to the acceptance of the risk, or to the hazard assumed by the insurer; or
(c) The insurer in good faith would either not have issued the policy or contract, or would not have issued a policy or contract in as large an amount or at the same premium or rate, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise.
(2) If, in any action to rescind any policy or contract or to recover thereon, any misrepresentation with respect to a medical impairment is proved by the insurer, and the insured or any other person having or claiming a right under the contract, shall prevent full disclosure and proof of the nature of the medical impairment, the misrepresentation shall be presumed to have been material.”

The certificate of insurance was made an exhibit to the complaint by the appellee in this case and was also offered in evidence by the appellant and received without objection. The loan officer of the bank, Mr. Gairhan, was called as a witness for the appellee and on cross-examination he read from the certificate as follows:

“ ‘If the person whose life is insured by this certificate was not in good and sound health on the date hereof, the company shall be liable only for the return of the premium hereon.’ ”

Mr. Gairhan also testified that he was present when Mr. Adams signed the statement on the certificate and when Mr. Adams was asked about the state of his health, “he said he was all right.”

It is clear that the insurance involved in this case was primarily for the purpose of paying Mr. Adams’ debt to the bank in the event of his death before the debt was paid. No medical examination was required but only the signed statement of Mr. Adams stating that he was in good and sound health when the certificate was issued was all that was required. It is also clear that Mr. Adams was not in good and sound health when he signed the statement and the certificate was issued. According to the death certificate, Mr. Adams had been under treatment for cancer of the stomach by Dr. Keisker for a period of 29 months when he signed the statement that he was in good and sound health.

The appellee argues that the appellant did not plead that the state of Mr. Adams’ health was material to the risk and that the appellant in good faith would not have issued the certificate had it known the true facts. The appellee argues that the appellant relied solely on its affirmative defense that Mr. Adams knowingly and fraudulently signed the false statement that he was in good health, and argues that the appellant failed to prove the fraud it alleged. We agree that the appellant failed to prove the extent of Mr. Adams’ knowledge as to the state of his health when he signed the statement, but Dr. Keisker was the only available witness who would have known the extent of Mr. Adams’ knowledge as to the exact condition of his health and Dr. Keisker was prevented from testifying by action of the appellee in invoking the medical privilege.

The appellant did allege in its answer that the “policy” was issued in reliance upon said false representations and as a result thereof the policy was void, and Mr. Tice testified that it would not have been issued had Mr. Adams not signed the statement he did sign. Certainly the appellee could not have been taken by surprise at appellant’s attempt to prove Mr. Adams’ untrue statements material to the acceptance of the risk or to the hazard assumed by the insurer.

We do not agree with appellee’s theory that the appellant’s failure to allege materiality, etc. under subsections (b) and (c) of § 66-3208, supra, was fatal to its defense. There is no question that the statement signed by Mr. Adams was a misrepresentation with respect to a medical impairment, and there is no question that the appellee prevented a full disclosure and proof of the medical impairment by the exercise of the medical privilege. Consequently, subsection (2) of the above statute creates a presumption that the misrepresentation was material and the appellee offered no evidence in rebuttal to that presumption.

In Union Life Ins. v. Davis, Adm’x, 247 Ark. 1054, 449 S.W. 2d 192, the suit was in chancery for specific performance under a credit life insurance master policy containing “good and sound health” clauses and the defense was based on misrepresentation of true condition of health. The pleadings or medical testimony was not questioned in that case but after setting out subsections (a), (b) and (c) of § 66-3208, supra, we concluded that opinion as follows:

“We have held that materiality to the risk is a question of fact so long as the matter is debatable, but a question of law when so obvious that a contrary inference is not permissible. Old Republic Ins. Co. v. Alexander, 245 Ark. 1029, 436 S.W. 2d 829. The circumstances of this case are such that we do not feel that an inference that Davis’ condition was not material to the risk could properly be drawn.”

In 46 C.J.S. § 1294, p. 346, is found the following statement:

“A plea of fraud or misrepresentations in the procurement of the policy must allege the fact of such fraud, or that insured’s false statements or misrepresentations were made with intent to deceive, or that they related to a matter material to the risk, and that they were relied on by insurer, as an inducement to the contract, unless the conclusion that the false statements were voluntarily and fraudulently made follows from their very nature and evident purpose.” (Emphasis added).

In Life & Casualty Ins. Co. v. Smith, 245 Ark. 934, 436 S.W. 2d 97, we quoted with approval from Couch on Insurance 2d, § 35:24, as follows:

‘If it is shown that the misrepresented, matter was material to or increased the risk it is immaterial and irrelevant that the insured had acted in good faith without any bad motive or intent to deceive. This means that if a representation is made which is untrue and material it taints the contract, whether fraudulent or not, and, if untrue and fraudulent, it taints the contract, whether- material or not.’ ”

In Smith we also said:

“To the same effect see Langlois v. The Wisconsin National Life Ins. Co., 119 N.W. 2d 400 (Wisc. 1963). It was there held that an intent to deceive need not be established. ‘It was enough to prove the making of the misrepresentation and its effect upon the risk undertaken.’ ”

In the Alabama case of Independent Life Ins. Co. v. Seale, 121 So. 714, a clause in a life insurance policy was to the effect that no obligation was assumed by the insurer unless on the date of the delivery of the policy, insured was alive and in sound, health. The insurance company in that case alleged in its affirmative defense:

“[T]hat the insured, at the date of the delivery of the policy, was afflicted with pulmonary tuberculosis, and that this increased the risk of loss.”

In that case the court said:

“[I]f the unsound health consists of tuberculosis, the court takes judicial knowledge that it does increase the risk of loss. * * *
It is therefore not necessary to make a specific allegation that tuberculosis, of which insured is alleged to have been afflicted on the date of the issuance of the policy, increased the risk of loss, or that the warranty of sound health was with the intent to deceive.
The allegation that this increased the risk of loss does not add to the burden of proof, when it is alleged that the unsound health consists of pulmonary tuberculosis, or any other unsound health which the court judicially knows does increase the risk of loss.”

We take judicial notice that cancer of the stomach of 29 months duration is material to the risk involved in writing a non-medical examination life insurance policy for a period of one year. Even if we did not take such judicial notice in this case, the misstatement became prima facie material by statute when the appellee prevented medical proof by claiming the medical privilege.

We conclude, therefore, that the judgment of the trial court must be reversed.

Judgment reversed.

Holt and Byrd, JJ., dissent.

Conley Byrd, Justice,

dissenting. I would affirm this case. Admittedly the appellant, American Pioneer Life Insurance Company did not prove that Mr. Adams procured the credit life policy by means of a false and fraudulent representation. This was the only ground upon which appellant relied in its answer to avoid the policy.

Affirmative matters avoiding a policy must be specifically pleaded. Atlas Insurance Company v. Robison, 94 Ark. 390, 127 S.W. 456 (1910). Appellant here did not plead the provisions of subsections (b) and (c) of Ark. Stat. Ann. § 66-3208 (Repl. 1966).

Furthermore appellant by its contract had agreed that after 60 days the policy could only be canceled for fraud. The policy provided:

“The company may cancel the insurance on the life of any borrower five days after written notice has been mailed to the creditor; however, the company cannot cancel the certificate after it has been in force for a period of sixty days unless it is found to have been issued based upon fraudulent information.”

It is pointed out in 43 Am Jur. 2d Insurance § 1155 that incontestable clauses in insurance policies are favored in the law and that if they are uncertain or ambiguous they are to be construed in favor of the insured.

In Illinois Bankers’ Life Ass’n. v. Hamilton, 188 Ark. 887, 67 S.W. 2d 741 (1934), the defense to the policy was that, as an inducement to reinstate a policy, the insured had represented that the answers she had given as to the state of her health in the original application were true and also true of the date of the reinstatement and that such representations were false. That policy contained a clause which provided: “After this policy shall have been in force two full years during the lifetime of the insured, it shall be incontestable except for nonpayment of premiums.” We there held that after two years the incontestable clause waived all defenses in avoidance of the policy except the one reserved for nonpayment of premiums.

In the case before us the insurance was issued to Mr. Adams on February 17, 1971, and he did not die until April 26, 1971, a period in excess of 60 days. Therefore, I would hold the appellant to the terms of its contract that the policy could not be canceled after sixty days except for fraud. I would award an additional $1,000 attorney’s fee.

For the reasons herein stated I respectfully dissent.

Holt, J., joins.


source: Caselaw Access Project

author: J. Fred Jones, Justice.

license: Public Domain

text:
    Larry BURNS v. BRADLEY COUNTY CIRCUIT COURT and Honorable G. B. COLVIN, Jr., Judge Thereof
    CR 73-30
    494 S.W. 2d 120
    Opinion delivered May 14, 1973

      Huey & Vittitow, for petitioner.

      Jim Guy Tucker, Atty. Gen., by: James W. Atkins, Asst. Atty. Gen., for respondents.
   J. Fred Jones, Justice.

On July 23, 1971, Larry Burns was charged with the crime of arson by information filed by the prosecuting attorney in the Bradley County Circuit Court. He invokes the original jurisdicdon of this court under Art. 7, § 4, of the state Constitution by a petition for a writ of prohibition directed to the Bradley County Circuit Court prohibiting that court from putting him to trial on the charge against him.

Burns contends that three terms of the Bradley County Circuit Court have expired since information was filed against him; that he has been denied his constitutional rights to .a speedy trial and is now entitled to discharge under Ark. Stat. Ann. § 43-1708 (Repl. 1964). Apparently the petitioner was held to bail and if so, Ark. Stat. Ann. § 43-1709 (Repl. 1964.) rather than § 43-1708 would apply. These two sections of the statute read as follows:

“43-1708 — If any person indicted for any offense, and committed to prison, shall not be brought to trial before the end of the second term of the court having jurisdiction of the offense, which shall be held after the finding of such indictment, he shall be discharged so far as relates to the offense for which he was committed, unless the delay shall happen on the. application of the prisoner.
43-1709 — If any person indicted' for any offense, and held to bail, shall not be brought to trial before the end of the third term of the court in which such indictment is pending, which shall be held after the finding of such indictment, and such holding to bail on such indictment, he shall be discharged, so far as relates to such offense, unless the delay happened on his application.”

The terms of the Bradley County Circuit Court commence on the first Monday in February and second Monday in September each year. Ark. Stat. Ann. § 22-310 (Repl. 1962). The petitioner’s triál was set for April 12, 1973, so whether the petitioner was held in prison or committed to bail, the designated terms had expired on February 5, 1973, when he filed a motion in the trial court to dismiss the charges filed against him.

It will be noted that under §§ 43-1708 — 1709, supra, the accused is entitled to discharge upon the expiration of the terms indicated unless the delay happened on his application. In overruling the petitioner’s motion to dismiss, the trial court found “the defendant has caused the delay of the trial of this cause by reason of filing motions to which the state has responded.”

It would serve no useful purpose to set out the various motions filed by the petitioner but between July 27, 1971, and November 2, 1972, he filed seven motions and supplements thereto primarily for bills of particulars. The one filed on November 2, 1972, was designated “Motion to Suppress” in which he prayed for an evidentiary hearing. The last paragraph of this motion reads as follows:

“Wherefore, for reasons stated herein, the Defendant, Larry Burns, prays this Court grant him an evidentiary hearing of the matters set out herein and that he not be put to trial until after these matters have been determined by this honorable Court.” (Emphasis added).

Whether the delay under §§ 43-1708 — 1709, supra, happens on the application of the prisoner or person indicted, is a question of fact for determination by the trial court and is not.a proper matter for the exercise of the original jurisdiction of this court through writ of prohibition. In Jones v. Coffin, 96 Ark. 332, 131 S.W. 873, we said:

“The writ of prohibition ‘is never granted unless the inferior tribunal has clearly exceeded its authority, and the party applying for it has no other protection against the wrong that shall be done by such usurpation.’ Russell v. Jacoway, 33 Ark. 191.”

See also Kastor v. Elliott, 77 Ark. 148, 91 S.W. 8; Crowe v. Futrell, 186 Ark. 926, 56 S.W. 2d 1030. For our latest word on this point see Slitter v. Ponder, 252 Ark. 414, 479 S.W. 2d 567.

The petition is denied.


author: Conley Byrd, Justice.

text:
    David JONES D/B/A WICKES LUMBER & BUILDING SUPPLY CENTER v. Glen ATKINS
    5-6242
    494 S.W. 2d 448
    Opinion delivered May 14, 1973

      Switzer ir Switzer, for appellant.

      Huey ir Vittitow, for appellee.
   Conley Byrd, Justice.

This litigation arises out of some hog paneling manufactured by Balhan Manufacturing Company. The appellee Glen Atkins being desirous of going into the hog business, looked at a number of installations in other states and decided to install what he describes as the “Cargill system.” He had learned that he needed a heavy duty Balhan panel 16 ft. in length and 35 inches high and that he could acquire them in Missouri at a cost of $8.75 per panel. When appellee got ready to order his wire panels he talked to Larry Johnson an employee of appellant, David Jones D/B/A Wickes Lumber & Building Supply Center, and told him that he would order the heavy duty panels from him if the price was right. When Johnson asked him what price he was talking about, he told Johnson that he could get the panels in Missouri for $8.75 per panel. Johnson later called back and informed appellee that he could deliver the panels for $8.77 per panel. Appellee ordered 228 panels at that time and paid for the same either upon delivery or shortly thereafter. During the construction, appellee determined that he needed an additional 57 panels and upon calling appellant found that Johnson’s employment had been terminated. However, he placed the order with appellant for the 57 panels. Those panels arrived on April 5, 1970, on a truck loaded with some additional panels. At that time appellee discovered that the wire in the other panels loaded on the truck was of a heavier gauge than what he was receiving. He had installed only a few panels of the first order at that time. Because of his breeding and farrowing schedule appellee used the 57 panels to complete his “Cargill system.” Appellee testified that he did not make an earlier complaint after delivery of the second order, because he desperately needed these additional panels to bring his operation up to schedule and it took him some time to see that the wire was unsuitable for his purposes. When appellant refused to make any adjustment, appellee refused to pay for the 57 panels. At the trial appellee testified that because of small difference between the gauge of the wire in the heavy duty panels and the gauge in the light weight panels, it was impossible for him, without a comparison, to determine that the 228 panel shipment did not conform to his heavy duty order. Other testimony on his part showed that Balhan Manufacturing Company regularly retailed the heavy duty panel for $8.75 and the light weight panel for $6.75. The difficulty with the light weight panel arose because the welds broke loose permitting the hogs to go from one pen to another.

Appellant brought this suit to recover the price of the 57 panels. Appellee counterclaimed for damages for the non-conformity between the heavy duty panels he had ordered and the light weight panels he had received. At the close of the evidence appellant moved for a directed verdict under two provisions of the Uniform Commercial Code. — i.e. Ark. Stat. Ann. § 85-2-602 and § 85-2-606. Those sections provide:

“85-2-602. Manner and effect of rightful rejection.—
(1) Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller.
(2) Subject to the provisions of the two [2] following sections on rejected goods (Sections 2-603 and 2-604 [§§ 85-2-603, 85-2-604]),
(a) after rejection any exercise of ownership by the buyer with respect to any commercial unit is wrongful as against the seller; and
(b) if the buyer has before rejection taken physical possession of goods in which he does not have a security interest under the provisions of this Article (Subsection (3) of Section 2-711 [§ 85-2-711]), he is under a duty after rejection to hold them with reasonable care at the seller’s disposition for a time sufficient to permit the seller to remove them; but
(c) the buyer has no further obligations with regard to the goods rightfully rejected.
(3) The seller’s rights with respect to goods wrongfully rejected are governed by the provisions of this Article on Seller’s remedies in general (Section 2-703 [§ 85-2-703]). [Acts 1961, No. 185, § 2-602.]
“85-2-606. What constitutes acceptance of goods.—
(1) Acceptance of goods occurs when the buyer
(a) after a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their non-conformity; or
(b) fails to make an effective rejection (subsection (1) of Section 2-602 [§ 85-2-602]), but such acceptance does not occur until the buyer has had a reasonable opportunity to inspect them; or
(c) does any act inconsistent with the seller’s ownership; but if such act is wrongful as against the seller it is an acceptance only if ratified by him.
(2) Acceptance of a part of any commercial unit is acceptance of that entire unit. [Acts 1961, No. 185, § 2-606]”

The trial court ruled that “the facts in this case, in the Court’s opinion, don’t fit into the statutes that you have quoted, Mr. Switzer” and dismissed both the complaint and counterclaim with prejudice. For reversal appellant contends that the trial court erred in failing to direct a verdict on the basis that the Uniform Commercial Code did not apply and because appellee’s counsel admitted that he was entitled to a directed verdict.

We do not agree with appellant’s argument that the trial court refused to apply the Uniform Commercial Code. Rather it appears to us that he only held inapplicable to the facts of this case the two sections upon which appellant relied. As we view this record a fact issue, particularly as to the 228 panels, was made under Ark. Stat. Ann. § 85-2-608 which provides:

“85-2-608. Revocation of acceptance in whole or in part. — (1) The buyer may revoke his acceptance of a lot or commercial unit whose non-conformity substantially impairs its value to him if he has accepted it.
(a) on the reasonable assumption that its non-conformity would be cured and it has not been seasonably cured; or
(b) without discovery of such non-conformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the ■seller’s assurances.
(2) Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it.
(3) A buyer who so revokes has the same rights and duties with regard to the goods involved as if he had rejected them. [Acts 1961, No. 185, § 2-608.]”

In speaking of the rights of a buyer to recover damages for breach in regard to accepted goods, the American Law Institute pamphlet on Sales and Bulk Sales by William D. Hawkland, contains this language:

“We have seen that a buyer’s acceptance of the goods (2-606) only necessarily precludes his right to reject them. In proper cases, he may revoke his acceptance and claim the same rights and duties with regard to the goods involved as if he had rejected them (2-608). Thus, a buyer properly revoking acceptance can 'cover’ under section 2-712, recover damages for non-delivery under section 2-713, obtain specific performance in a proper case (2-716), and hold a security interest in the ‘rejected’ goods for the price paid for them. Section 2-714 deals with the remedies of the buyer after the goods have been accepted and revocation of acceptance is not possible. In such a case, the seller must be given credit for the value to the buyer of the accepted goods, and normally the measure of damages should be the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had conformed to the contract, unless special circumstance show proximate damages of a different amount. Subsection 2-714 (2) expressly lays down this test as the measure of damages for breach of warranty. Subsection 2-714 (1) provides that the buyer ‘may recover as damages for any nonconformity of tender the loss resulting in the ordinary course of events from the seller’s breach as determined in any manner which is reasonable.’ The ‘non-conformity of tender’ referred to in this section includes breach of warranty, but the measure of damages for breach of warranty is specifically set out in subsection 2-714(2) and apparently supersedes the more general test of subsection 2-714(1). Subsection 2-714(3) makes it clear that consequential or incidental damages as provided by section 2-715 can be had in proper cases.
“We have seen that a buyer who has accepted nonconforming goods does not have an absolute defense to the seller’s action for the price if the acceptance has barred his right to revoke his acceptance. His redress, assuming he is not completely barred by lack of proper notice or by agreement, is an action or counterclaim for damages or a recoupment from the price. The recoupment remedy is set out in section 2-717. Under this section, a buyer on notifying the seller of his intention so to do may deduct all or any part of the damages resulting from any breach from any part of the price still due. The requirement of notice changes the law of recoupment under the Uniform Sales Act. It is a sensible requirement, for the seller should be apprised of the buyer’s intentions in withholding the price. No formality of notice, however, is required by the section, and any language which reasonably indicates the buyer’s reason for holding up his payment is sufficient. There would seem to be no reason why the notice of breach required by subsection 2-607(3) to save the buyer’s rights after accepting the goods could not include a statement of intention to recoup as required by section 2-717.”

In arguing his case to the trial court sitting as a fact finder, appellee’s counsel stated:

“If it please the Court, we can’t figure out how you can reject it after they had been installed, and we submit that Mr. Atkins relied upon Wickes that he was receiving the heavy duty wire, and acting upon that, he installed it. He had the pigs coming in, and, after some use, and completed the cycle to where his pens were all full where they were pushing up on either side of the posts, the wire didn’t hold up, I suggest, is not trying to have his cake and eat it too. After spending some five or six thousand dollars with Wickes and not trying to beat people out of a five hundred bill, he found out that he had been sold the lighter wire at the heavy duty price, and that is what this lawsuit is about. Certainly he was upset about it. He made a personal trip down there to tell them about it. Now, he did not say that I am bringing these wire panels back to you. They had already been installed and were welded to posts. This is an impossible situation. He did receive it, and he is still trying to use it. He has accepted it, and I am satisfied that he owes this five hundred and nineteen dollars for it even though he got something that he didn’t order. But I am saying that we are entitled to a set-off on this case. He has been damaged twelve hundred and fifty two dollars. It has cost him that much money to accept it and to use it, and he hopes that it will continue to hold up. But, he has had to reinforce it, re-weld it and if he had to pay for that wire under what. he ordered it for, he should certainly be reimbursed for what he had to spend to get the use out of it.”

Of course the acceptance of the 57 panels does not in itself bar appellees right to counterclaim for the damages for the. non-conformity of the 228 panels. As pointed out in the article by Mr. Hawkland, above, it does not in itself bar a counterclaim for damages because of the nonconformity of the 57 panels. Thus for either reason the trial court did not err in failing to direct a verdict for appellant.

Affirmed.


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

text:
    WESTERN SURETY COMPANY v. Jimmy GATES
    73-25
    494 S.W. 2d 479
    Opinion delivered May 14, 1973

      Shackleford ér Shackleford, for appellant.

      Haley ir- Clay comb, for appellee.
   Conley Byrd, Justice.

Appellee Jimmy Gates, the surface owner of some land in Sec. 28, T. 16 S, R. 12 W, and Franklin Oil Company, Inc., as the owner of some oil and gas leases entered into a contract for the building of roads and the clearing of oil well drilling sites on the land. It was agreed that each oil drilling site would be 200 ft. by 200 ft. and that Franklin would pay |400 for each site. The contract further provided that Gates and Franklin would mutually agree on the location and width of all tributary roads to each well site. Texas Continental Oil Company, Inc., assignee of Franklin entered the land to drill oil wells. During the drilling of the third well, Gates barred Texas’ right of ingress and egress. Texas filed suit alleging a breach of the contract and asked for a temporary injunction. Gates defended on the ground that Texas was taking more land than was necessary to serve its purposes. Appellant Western Surety Company became the surety on two temporary injunctions issued pursuant to Ark. Stat. Ann. § 32-206 (Repl. 1962), the bonds being in the total amount of $4,400.00. The last temporary injunction order provided that the two bonds together with prior cash payments to Gates represented adequate deposits to protect the interest of Gates and reserved the issue raised by Gates in his answer until such time as a determination could be made. After Texas had drilled eleven wells and had gone into bankruptcy, Gates pursued his cause for the excessive use of his land against the surety bonds issued by appellant. The chancellor found that Gates’s damages exceeded the amount of the bonds and entered judgment for the full amount of the bonds.

For reversal appellant, contends:

“I. THERE HAS BEEN NO BREACH OF THE INJUNCTION BOND.

A. There has been no final decision that the injunction ought not to have been granted.
B. Neither dissolution of the injunction nor dismissal of the action for want of prosecution establish breach of the bond condition.

II. THE TRIAL COURT AWARDED DAMAGES NOT RECOVERABLE UNDER THE BOND OBLIGATION. '

A. Damages awarded were not result of the act enjoined.
B. Bond was not conditioned on the payment of damages allowable under 'Road Building Contract.’

III. THE AWARD WAS EXCESSIVE AND NOT SUPPORTED BY THE EVIDENCE.”

The record shows that Gates in the construction of well sites greatly exceeded the 200 X 200 feet agreed to in the contract. The clearing around one well site was as much as 575 feet long and 300 feet wide. The testimony is to the effect that a reasonable tributary road would be from 12 to 16 feet in width but that some of the roads constructed by Texas were 75 feet wide. To some wells, Texas constructed more than one tributary road. The witnesses estimated that the value of the land in a cleared condition was $50 per acre as compared to $275 to $280 per acre with the timber on it at the time the temporary injunctions were issued. Texas did not consult with Gates as to the width and location of the roads.

Under points I and II, appellant argues that there was no breach of the injunction bond and that the court wrongfully awarded judgment for damages to Gates’s land as a result of Texas’ activity and not as a result of the issuance of the injunction,*— i.e. appellant argues that the injunction bond was not an indemnity agreement nor was it insurance for damages that Gates sustained as a result of Texas’ entry on the land under the road building contract.

Ark. Stat. Ann. § 32-206 (Repl. 1962), provides:

“In every case, the court or judge granting an injunction shall specify in the order therefor an amount, for which the party obtaining it shall give security in a bond to the party enjoined, before the injunction shall become effectual; which amount shall be sufficient to cover all the probable damages and costs that may be occasioned by the injunction. The court or judge may prescribe the effect of the bond, so as to secure to the party enjoined the damages to which he may become entitled, if it is finally decided that the injunction ought not to have been granted...”

As we view the evidence in this case it shows that Texas was ignoring the terms of the road building contract at the time Gates barred its right of ingress and egress and that it continued to do so after the issuance of the temporary injunction. Since the termporary injunction permitted Texas to continue to violate the terms of the road building contract, we conclude that the evidence shows that it was wrongfully issued. In so holding we point out that the issues here are not those regulated by law between the surface holder and the lessee of mineral interests but that the issue here involves a matter about which the parties had contracted. Under the terms of that contract the size of the drilling site was fixed and Gates was entitled to be consulted as to the location and width of the tributary roads. Of course without the injunction Gates could have insisted upon Texas’ compliance with the road building contract. Under the injunction he was helpless to interfere.

Neither do we find any merit in the contention that the damages are excessive. Appellant in making this argument does so on the basis that the court erred in stating the amount of land taken. As we understand appellant’s argument, it uses the wrong formula in calculating the excess area used in the well sites.

Affirmed.

Fogleman, J., concurs.

John A. Fogleman, Justice.

Concurring. I concur. I cannot agree, however, that the evidence shows that the injunction was wrongfully issued for the reasons stated in the majority opinion. Nevertheless, I conclude that it was. The record seems to me to be silent on that point, except that it is clear that the dissolution of the injunction was based upon the dismissal for want of prosecution of Texas Continental Oil Company’s original action for injunction. It further appears that there was a proper basis for this action.

Our pertinent statutes relating to injunction bonds are Ark. Stat. Ann. §§ 32-206, 32-207 (Repl. 1962), which are Sections 302 and 303 of the Civil Code of 1869. This code was an adoption of the Kentucky Code. Consequently, decisions of the Kentucky Court of Appeals construing their code after its adoption in this state are highly persuasive. It was held in Kentucky that dismissal of the petition upon which an injunction had been issued constitutes a judicial determination that the injunction ought not to have been granted and gives rise to a cause of action against the obligor on the injunction bond. Pugh v. White, 78 Ky. 210 (1879). One of the authorities cited for this holding was Dowling v. Polack, 18 Cal. 625 (1861), in which the dismissal was for want of prosecution. In the California case the court said that the judgment of dismissal had the same effect upon the rights of the parties as would have resulted from a hearing on the merits. Other authorities supporting the court’s conclusion were cited, including Loomis v. Brown, 16 Barb. 325 (N.Y.Sup.Ct. 1853), in which it was held that the dismissal of a complaint, included by force of the term itself, a determination that the party was not equitably entitled to the injunction.

I would follow the holding of the Kentucky court and say that the dismissal of the action for injunction constituted a determination that the injunction based thereon should not have been granted. In spite of the bankruptcy of the company bringing the action, there was evidence that someone had conducted operations on appellee’s land after the bankruptcy and, as the chancellor remarked, there must have been a successor to the original plaintiff’s rights under the contract.

I do not consider Blakeney v. Ferguson, 18 Ark. 347, cited by appellant to be governing here for several reasons. It is a pre-Civil Code decision. It is based upon a statute having different language. The court there simply held that the failure of the court dissolving the injunction in that suit to award damages barred a common law action on the bond.

I am aware of the fact that our statute governing dismissals for want of prosecution provides that the dismissal is without prejudice to a future action and that such a dismissal is not a decision on the merits. Nevertheless, our statutes provide for the award of damages on an injunction bond, whenever an injunction is dissolved. Ark. Stat. Ann. § 32-307 (Repl. 1962). The right to damages is not limited by the right of the plaintiff to institute a new suit upon the same cause of action.


author: Frank Holt, Justice.

text:
    Roger HENRY and ACLIN FORD COMPANY, INC. v. Faye LANDRETH
    73-13
    494 S.W. 2d 114
    Opinion delivered May 14, 1973

      Whetstone ir Whetstone, for appellants.

      Hardin br Rickard, for appellee.
   Frank Holt, Justice.

Appellants admitted liability in this action brought by the appellee to recover injuries sustained by her arising out of an automobile accident in which her car was rear-ended. Her damages, being the only issue at trial, were set at $81,125 by the jury verdict. Appellants have consolidated some points for reversal. The main thrust of their argument is that the court erred in refusing to permit exploration of testimony on cross-examination of witnesses with reference to an undisputed incident involving a self-inflicted gunshot wound by appellee approximately two months before the automobile accident. The court refused to permit appellants to establish this injury was self-inflicted and, also, refused to permit certain other inquiries. We agree with appellants’ contention.

On direct examination the appellee, a divorcee, testified that before the automobile accident her medical condition was good and that she was planning to go to work to support her children. In chambers the appellants requested the court’s permission, which was denied, to cross-examine the appellee about the episode at the time of the gunshot wound to refute her positive statements with regard to her physical condition. As indicated, it is undisputed that approximately two months before the automobile accident appellee suffered a self-inflicted gunshot wound which was serious enough to warrant hospitalization for approximately 18 days. One of her doctors testified that appellee was asked by him if she had ever suffered a previous injury. Appellee denied to him that she had. This doctor testified further that he was aware of her numerous other medical problems. Her family doctor said that for the past four years she had experienced . .a lot of illness. Several illnesses.” The appellants’ medical witness testified she specifically reported to him she had suffered no previous accidents or injuries and reported no past illnesses.

Appellants were, also, refused the right to propound questions relative to her asserted instructions to the hospital personnel not to let any one see her hospital records relative to the self-inflicted injury. Appellants were further refused permission to utilize a part of the hospital records, a summary sheet, reflecting the gunshot wound. Appellants were refused in their efforts to show that she was ambulatory and visited in another room on another floor during her hospitilization subsequent to the automobile injury although she had testified she was bedfast and confined to her room.

Certainly the foregoing evidence is contradictory to the appellee’s testimony on direct examination. We have long recognized the important significance of cross-examination and the wide latitude which should be permitted the cross-examiner in eliciting any contradictory facts affecting the witness’ credibility. Wilson v. Thurston Nat’l. Ins. Co., 251 Ark. 929, 475 S.W. 2d 881 (1972). Also, the purpose of cross-examination is to test and sift for the truth of statements made by a witness on direct examination. Huffman v. City of Hot Springs, 237 Ark. 756, 375 S.W. 2d 795 (1964). In Washington National Ins. Co. v. Meeks, 249 Ark. 73, 458 S.W. 2d 135 (1970), we stated:

“We have said that cross-examination is a leading and searching inquiry of a witness for further disclosure touching the particular matters detailed by him in his direct examination, that it serves to sift, modify or explain what has been said in order to develop facts in a view favorable to the cross-examiner, and that its objects include weakening or disproving the case of the adversary, breaking down his testimony in chief, testing his veracity, accuracy and honesty, and exhibiting the improbabilities of his testimony.”

We have, also, recognized the wide discretion vested in the trial court to limit cross-examination. However, we have not been hesitant to find a limitation as being unduly restrictive. Washington National Ins. Co. v. Meeks, supra. In the case at bar appellants’ proposed . inquiries were within the proper scope of cross-examination inasmuch as they directly related to appellee’s testimony on direct examination and they undeniably had a significant bearing on her credibility as a witness. It is appellants’ position that appellee’s persistent headaches and pain requiring considerable analgesics and medication were not altogether attributable to her automobile injury since she had suffered from several illnesses the past four years, including the self-inflicted gunshot wound about two months before the present injury for which she seeks damages. Therefore, we feel all of these inquiries should have been allowed and the trial court’s refusal to do so was too restrictive. Furthermore, we are in agreement with appellants’ assertion that they had the right to ask appellee’s medical witness on cross-examination about testifying in previous cases for appellee’s attorney.

Appellants, also, contend that the trial court erred in permitting appellee to present her medical bills “in a bundle” without proper authentication. Suffice it to say that it was appellee’s burden to show that each of these bills was necessary as a result of the automobile accident rather than from the gunshot wound or any other cause or illness. However, it is unlikely that this asserted error will arise again on retrial.

Another of appellants’ contentions for reversal relates to the trial court’s alleged error in refusing a requested instruction to the effect that withholding evidence from the jury raises a presumption that the evidence would have been unfavorable. This contention relates to the failure to call her divorced husband as a witness. The argument is made that he was knowledgeable as to her past and present condition. The proffered instruction, however, reads:

“If you find that either party to the suit has withheld any evidence under his control, the law presumes that such evidence, if introduced, would be against her or him whichever the case might be.”

It is true, as appellants assert, that we have approved such an instruction where the litigant or litigants themselves are present in court and do not testify. Saliba v. Saliba, 178 Ark. 250, 11 S.W. 2d 774 (1928), Jones v. Brown, et al, Trustees, 242 Ark. 537, 414 S.W. 2d 618 (1967). In the case at bar, on the record before us, we do not think these cases relied upon by appellants are applicable and required giving the proffered instruction.

The judgment is reversed and the cause remanded because of the errors previously indicated.

Reversed and remanded.


author: Carleton Harris, Chief Justice. George Rose Smith, Justice,

text:
    J. B. WILSON v. Joan RODGERS, Nancy TULLOS, Kalynn HARRIS, Mrs. Katherine WILSON, Katherine WILSON, Admx. Estate of George WILSON, Deceased
    73-12
    494 S.W. 2d 484
    Opinion delivered May 21, 1973

      Milton G. Robinson, for appellant.

      Macon, Moorhead & Green, for appellees.
   Carleton Harris, Chief Justice.

This is the second appeal of this case which relates to whether certain realty belonged to a partnership composed of two brothers, or whether such realty belonged to only one of the brothers. There is no need to further detail the facts as these previous opinions fully discuss the factual situation. After first affirming the decree of the Arkansas County Chancery Court, this court, on rehearing, held that the case had been tried upon an erroneous theory, noted that the evidence was deficient in several particulars, set aside our opinion, and remanded the case back to the Arkansas County Chancery Court for further consideration. In doing so, we directed the trial court to permit additional evidence to be offered on five points, as follows:

“1. How the record title to the lands was held, and the identity of the grantee in any unrecorded deeds conveying the property.
2. The reasons for taking the title in the names of the grantees of all conveyances of lands alleged to be partnership property, rather than in the names of the two alleged partners.
3. The names in which bank accounts were held, the source of funds deposited thereto, the person authorized to draw checks on each such account, the arrangements between the depositors and the banks, and the disposition of the funds deposited.
4. The source of the funds used to pay the purchase price of any of the lands in which the grantee in the deeds when purchased was George Wilson.
5. Any accountings between the partners and withdrawal of partnership funds by the individual partners for their own account.”

Perhaps we did not make clear in our per curiam order on rehearing exactly what the trial court should do, for it is evident that the chancellor did not construe the order as we intended. Apparently, the trial court was of the view that it had been directed to permit evidence on the five points heretofore enumerated, and if the additional evidence was not sufficient to justify a different conclusion, the original opinion of this court would stand. That this is true appears evident from the comments of the chancellor on retrial. As to point one, the appellees introduced a fourth warranty deed dated January 15, 1946 from C. F. McPherson and wife to George Wilson, but the identity of the grantee in the remaining tract of land was not shown by either side and the court, summing up as to one point, stated:

“So, as to Point 1, this Court is of the opinion that except as herein noted no such further evidence was elicited or introduced as would change the balance of the sufficiency of the evidence to meet the burden of proof or the burden of persuasion.”

As to point two, the court found that no further evidence was offered on retrial, and accordingly only the evidence introduced in the original trial would have any bearing on the sufficiency of the evidence. “Therefore, retrial did nothing to dispose of the dilemma of persuasion.”

As to point three, the trial court found that the evidence offered by appellant “is not substantially different from that introduced in the original trial.” Though stating that it was somewhat more comprehensive in scope, the chancellor then stated that such evidence “in and of itself (our emphasis) does not sufficiently convince this court as to the partnership theory of the ownership of the land.”

As to point four, the court found that the evidence offered by appellant was no more enlightening on the matter of the source of funds, or whose funds purchased the land than was the evidence in the original trial. The court then said, “This court does not believe sufficient additional evidence on retrial (Our emphasis) has been introduced to support a finding of fact that the funds used to pay the purchase price of the lands at the time of purchase, in which George Wilson was the grantee in recorded conveyances, and even as to the one tract where there was no recorded instrument, where in fact parthership funds notwithstanding that the source of those funds came from the partnership.”

As to point five, the court commented that there had been no additional evidence.

Finally, the court stated:

“The Court is of the opinion that the finding of the majority of the Supreme Court that the overall testimony left the circumstantial evidence as to.ownership so evenly balanced that it could not be said that a preponderance lay either way is the ‘law of the case.’ That therefore that finding of the Court on appeal as to the sufficiency of the evidence controls the decision of this Court. (Our emphasis) This Court accordingly is not persuaded by the evidence introduced on retrial that there is a change in the sufficiency of the evidence.”

We think it is apparent from the findings set out that the chancellor, though stating that the majority opinion, dissenting opinion and opinion on rehearing were read many dmes, in rendering his decision, did not consider the entire record, but only whether the additional evidence was sufficient to change the original result (both in the trial court and supreme court). This is why it appears that our per curiam order was evidently not clear for, in granting the rehearing, we intended that our original opinion be set aside, and in remanding the case, intended that the chancellor consider all of the evidence, presented at both the first and second trials, in rendering his decision.

The per curiam opinion does not flatly state that the case was tried on an erroneous theory, but the language of the opinion, we think, clearly indicates that this was the view of the court. For instance, after stating that the general rule in equity cases is that, with all the record fully developed, we generally decide the case here instead of remanding it to the chancery court, we then stated:

“Yet there are exceptions. This court has the power, in furtherance of justice, to remand any case in equity for further proceedings. Carmack v. Lovett, 44 Ark. 180. We have done this when the chancery court had based its decision on an erroneous theory. ###
“When we can plainly see what the rights and equities of the parties are, we will not remand a chancery cause. Pickett v. Ferguson, 45 Ark. 177, 55 Am. St. R. 545. On the other hand, when it is clear that the cause was tried in the chancery court upon an erroneous theory, and we are unable to determine from the evidence before us the decree that should have been rendered, we will, in furtherance of justice, remand the cause to be reopened, to permit further proof so the case may be determined upon the proper principles. Long v. Charles T. Abeles, supra (on rehearing). In Fordyce v. Vickers, supra, we said:
‘But where the chancellor has decided a case upon an issue involving virtually a question of law, in which we find that he was in error, and leaves undecided other issues in the case involving questions of fact, which he is probably better able to pass upon by reason of his greater familiarity with the cir-circumstances and conditions surrounding said issues, this court in its discretion may remand the case for his decision upon said issues of fact. Under the circumstances of this case, we deem it wise to remand the cause for a determination by the chancellor of the matters relative to the improvements, taxes, and rents.’ ***
“Even when all the parties tried a case upon an erroneous theory and the chancery court decided the case upon that theory, we have exercised our discretion to remand such a case so that pertinent facts, not fully developed, might be ascertained. Brizzolara v. Powell, 214 Ark. 870, 218 S.W. 2d 728. ***
“Appellant filed an answer to appellee’s original complaint, in which he alleged that he was not wrongfully interfering with appellee’s use and control of the land involved here, because it was a partnership asset of which he was properly in control and in which he had a partnership interest. He filed a cross-complaint against the appellee widow and heirs in which he alleged that all assets and property held in the name of George Wilson, with minor exceptions, were owned by a partnership consisting of George Wilson and J. B. Wilson, that the legal title was held by George Wilson in trust for the partnership and the partners, that land held in the name of George Wilson would constitute a fraud, actual or constructive, which would impress a trust upon the property in his favor. He asked that title to a one-half interest be vested in him, subject to mortgages and to claims of creditors against the estate of George Wilson.
“A reading of the chancellor’s opinion discloses that the question of title to the real estate must have ultimately been treated as if the determination of the case turned upon the existence of a trust ex maleficio or resulting trust. Every authority cited in this opinion has to do with an alleged trust, either constructive or resulting. None relates to the situation where partnership funds were used in paying the purchase price. ***
“We certainly agree that neither a constructive nor resulting trust was established by the evidence. Inasmuch as the authorities upon which the chancellor rested his finding were based upon this decision, we cannot be certain that there was a clear-cut decision on the partnership theory.”

The difference, of course, is in the quantum of proof required. The constructive and resulting trust theory requires clear, cogent, and convincing evidence while establishing a trust under partnership law would require only a preponderance. Of course, it is well established and all parties concede that the two brothers operated their business as a partnership. The chancellor, on retrial, clearly understood the question at issue in the litigation, for in his opinion, he stated:

“There is no doubt the brothers were partners and no doubt that most all of their funds came from the partnership. But merely because all funds either partner had came from that partnership does not necessarily mean they were partners in land bought with funds that either drew from the partnership. There is nothing in the retrial that indicates that George Wilson could or could not have bought the land from funds he withdrew as his own from the partnership source. The whole of the problem is not that the land was bought with funds derived from the partnership, for this is true. It is rather whose money purchased the lands. If partnership funds were used to purchase the lands as a partnership asset, then it is partnership lands, but if George Wilson purchased the lands for himself from funds he withdrew for himself from the partnership then the lands were George Wilson’s.”

This is exactly the issue.

Since it is evident thát the chancellor considered only whether the additional evidence at the second trial justified a change in the findings, rather than determining the litigation from the full record, and since we consider that the testimony of all the witnesses leaves the evidence as to the ownership so evenly balanced that it cannot be said that a preponderance lies either way, we, though reluctantly, remand the case for a determination as to this point, without additional testimony, but based upon the entire record.

Let it be said that, in ordering the case remanded, we do not, in any sense, mean to indicate, nor imply in any manner, that the result was either correct or erroneous; we only desire that the findings be based upon the entire record.

It is so ordered.

George Rose Smith, Lyle Brown, and John A. Fogleman, JJ., dissent.

George Rose Smith, Justice,

dissenting. Basically, I disagree with the majority’s assertion, in the next to the last paragraph of the opinion, that “the testimony of all the witnesses leaves the evidence as to the ownership so evenly balanced that it cannot be said that a preponderance lies either way.”

That assertion is the cornerstone of the majority’s decision to remand the case to the chancellor for a decision about where the weight of the evidence lies. Quite obviously the chancellor’s determination will not be open to review by this court. That is so because all the evidence is now before us. If a clear preponderance of the proof favors one side or the other, nothing is to be gained by sending the case back to the chancery court, because we can and should end the litigation right now by announcing a decision in accordance with the weight of the evidence. Hence the majority’s election to remand the case to the trial court necessarily and logically depends upon the finding that the testimony is so evenly balanced that the preponderance must be determined by the chancellor (who had the slight advantage of hearing the additional witnesses who testified at the second trial).

In my opinion the evidence now preponderates decidedly in favor of appellant. We might have made that determination upon the first appeal except for the deficiencies of proof that were discussed in the per curiam opinion on rehearing. At the end of that opinion we listed five specific issues which might well have been clarified by the presentation of evidence not heard at the original trial.

Our doubts about the deficiencies in the proof have now been set at rest. Despite the efforts of able counsel to find the missing proof, it is now apparent that hardly any further clarification of the issues' is possible. The evidence is simply not available. The case must therefore be finally decided, either here or in the trial court, upon the present record.

I think it should be decided here, for I believe that the clear weight of the competent evidence supports the appellant’s position. There is no doubt that a partnership existed between the two brothers. There is no doubt that funds derived from the partnership were used to purchase lands that were deeded to George Wilson only. Hence, unless a contrary intention appears, the lands became partnership property. Ark. Stat. Ann. § 65-108 (Repl. 1966). In addition to the statutory presumption there is the testimony of witness after witness that George Wilson repeatedly stated that there was a partnership and that the lands belonged to him and to his brother. Such declarations were unquestionably competent evidence, as statements against interest.

On the other hand, there is hardly any competent proof in favor of the appellees. The deeds, of course, were made to George alone, but when the partnership issue is taken into account the form of the conveyances becomes immaterial. Proof that the purchases were made with funds derived from the partnership established a prima facie case for the appellant, shifting to the appellees the burden of going forward with the evidence. That burden was not met. The chancellor, I submit, misinterpreted the issues when he based his decision upon this reasoning in his opinion: “There is nothing in the retrial that indicates that George Wilson could or could not have bought the land from funds he withdrew as his own from the partnership source. The whole of the problem is not that the land was bought with funds derived from the partnership, for this is true. It is rather whose money purchased the lands. If partnership funds were used to purchase the lands as a partnership asset, then it is partnership lands, but if George Wilson purchased the lands for himself from funds he withdrew for himself from the partnership then the lands were George Wilson’s.” The defect in the chancellor’s reasoning lies in the concession that there is nothing in the proof to show whether George bought the lands with partnership funds or with his own funds derived from the partnership. The gap in the proof is fatal to the appellees’ position, for they had the burden of overcoming the appellant’s prima facie case.

There remains, as far as I can see, no other proof to support the appellees except George’s repeated statements, made to his accountant, to Mrs. Lillian Young, and to others, that he was the owner of the land. Those statements, however, were inadmissible, being self-serving declarations. Beichslich v. Beichslich, 177 Ark. 47, 5 S.W. 2d 739 (1928); Waldroop v. Ruddell, 96 Ark. 171, 131 S.W. 670 (1910).

When the deeds and the self-serving declarations are laid aside, I find no proof to offset the strong case made by the appellant. It is regrettable that the majority, in delegating to the chancellor the responsibility for deciding the case, have not seen fit to set forth the competent evidence which is thought to be so strong as to leave the preponderance in doubt. That course casts upon me the burden of proving the negative, which is not ordinarily a simple task. Here, however, the majority do recognize that the facts are fully discussed in the three opinions delivered upon the first appeal. I have reread those opinions carefully, and if they recite any competent evidence tending to support the appellees’ position as the record now stands, I have not found it.

Brown and Fogleman, JJ., join in this dissent.

        Wilson v. Rodgers, et al, 250 Ark. 335, 468 S.W. 2d 739 (April 5, 1971). Rehearing granted, 250 Ark. 356 (June 21, 1971).

      In the original trial, it developed that George Wilson was the grantee in three of five conveyances at issue.


author: Carleton Harris, Chief Justice.

text:
    Jerry Edward AUSTIN v. STATE of Arkansas
    CR 73-9
    494 S.W. 2d 472
    Opinion delivered May 21, 1973

      Skillman, Durrett ¿r Davis, for appellant.

      Jim Guy Tucker, Atty. Gen., by: Clarence Walden Cash, Asst. Atty. Gen., for appellee.
   Carleton Harris, Chief Justice.

Appellant, Jerry Edward Austin, was charged with the offense of murder in the first degree, it being alleged that he did “feloniously, wilfully, deliberately, with malice aforethought and with premeditation and deliberation shoot and kill Mack Crawford Howell, or did stand by, aid, abet, assist, advise or encourage another in the shooting and killing of the said Mack Crawford Howell”. On trial, Austin was convicted and sentenced to life imprisonment in the Arkansas Department of Correction. From the judgment so entered, Austin brings this appeal. For reversal, two points are asserted, first that the court erred in not directing a verdict for the defendant, it being contended that the evidence was not sufficient to support a conviction, and second it is alleged that the court erred in not declaring Garth W. Stewart, a witness on behalf of the state, an accomplice as a matter of law. We proceed to a discussion of these points.

According to Mrs. Nell Howell, wife of Mack Crawford Howell, they were residents of West Memphis, having lived there fifteen or sixteen years. At about 3:30 A.M. on June 14, she was awakened from sleep by a knock at the door. Mrs. Howell was sleeping with her youngest son in his room because he had been ill the night before. As she walked to the hall toward the door, her husband, who had been sleeping in the bedroom, having also been awakended, was putting on his trousers. Mrs. Howell pulled back the curtain and saw the figure of a person outside, opened the door and said, “Yes?” and the person asked, “Is Mack home?” By the time she had answered in the affirmative, her husband had reached the living room and came on to the door. He turned on the living room light and she stepped back since she was in her gown, and heard someone say, “Mack”, and as she went to get her robe, she heard words, “Step around the corner”. After putting on her robe, she came back, but could see no sign of anyone; she then went to the drive, but still could see no one and as she reached the front door she heard three loud “claps”. Subsequently, she called a neighbor from the bedroom telephone. They looked around the house and she decided the police should be called, endeavored to use the telephone in the kitchen, but it was “dead”. In searching around the house, it was found that one of the telephone wires had been cut. Mrs. Howell was subsequently advised that her husband’s body had been found in a nearby field.

Police officers testified about the finding of the body and they related their investigation in the neighborhood. Howell’s body contained three wounds to the left side of the face, and two other wounds to the left shoulder, and three bullets were removed and turned over, with other items, to the F. B. I. laboratory in Washington, D.C. The officers received a telephone call from Savanna, Tennessee, which proved helpful in furnishing a lead and further investigation indicated the involvement of appellant, Jerry Austin, and his wife, Linda, who lived next door to the Howells, Gene DuBois, cousin of appellant, and Garth W. Stewart. In trying Austin, the state never contended that appellant actually fired the shots that killed Howell, but only that he planned, aided, and abetted DuBois in perpetrating the crime. In other words, it was contended that Austin was an accessory before the fact, which, of course, under our statutes, means that, if guilty, he was guilty as a principal.

The main witness for the state was Garth W. Stewart, twenty-five years of age, and a resident of Cortland, Alabama. Stewart testified that he had known DuBois for two or three months; that he met Austin and wife on June 13 at Waterloo, Alabama at a time when the witness was with DuBois. He said that Austin wanted to return to his home at West Memphis and agreed to pay Stewart $35.00 if the latter would use his car and take the Austins to West Memphis. Stewart agreed, the parties first stopping at Savanna, Tennessee, the home of Linda Austin’s parents. This occurred between 8:00 and 9:00 P.M. When they left Savanna, Mrs. Austin drove the car, her husband and DuBois sitting in the front with her. Stewart lay down in the back seat and went to sleep and did not awaken until they pulled into a truck stop at Memphis. At that time, according to the witness, appellant was driving the car. All four went into the truck stop, ate a sandwich, Stewart noticing that the time was about 2:30 A.M. They left from there and went to the Austin house in West Memphis. Stewart heard Austin point out to DuBois a stop sign, which it later developed was located at the intersection of Jackson and Woods in West Memphis and also heard Austin tell DuBois where Mack Howell lived. After going into the Austin house, Stewart testified that he went into the kitchen and drank a cup of coffee with Mrs. Austin while appellant and DuBois went on towards the back of the house through a hallway. When they returned, DuBois was putting on a black shirt over his other shirt. As DuBois started out the door, Stewart got up to go with him, reached the door, but Austin caught him by the collar of his shirt, jerked him back and he observed a pistol in Austin’s hand, the latter stating, “You learned too much as it is. Furthermore, you learned the whole details.” He said that DuBois came back to the door and Austin handed him either a knife or wire pliers, told DuBois to go up the side of his house, and stay in the dark. Subsequently, Austin directed the witness to get into his (Stewart’s) automobile, Stewart getting under the wheel and Austin sitting on the passenger side. He was then directed to back the car out of the driveway, but not to turn on his lights; further, he was told to stop the car “a little piece past the second house”. The witness said that appellant then told him to cut off the motor and give to Austin the car keys, and appellant “then got out and went out around behind the car”. Stewart stated that the porch light came on at the house and he observed DuBois standing on the front porch and that Austin was standing between the car and the house. Austin was wearing a light colored shirt. Stewart observed a woman come to the door, close it, and then a man came to the door, put out his hand as if to shake hands, and the witness stated:

“Then DuBois motioned like this, with his hand, then DuBois and this man jumped off the porch and started running towards that bush or tree where Jerry Austin was standing at, then when they got even with him, Jerry got on one side and Gene on the other side coming on. . .* * * Then come on to my car, Jerry or Gene one opened the back car door, I don’t know which one it was opened the back car door. And told this man to get in. He got in, Gene DuBois got in, then he throwed me the key, then Jerry said, 'Be sure to put the gun where I told you to put it at.’ ”

The man got into the back seat, DuBois getting in after him and then handing the keys to Stewart. DuBois then told Stewart to “crank up and go on”. Austin stood at the car until it left. The witness said that the man stated that he had never seen either of the two (Stewart and DuBois) and asked what they wanted. Subsequently, he begged DuBois not to kill him. As Stewart started to make a turn, the man (Howell) jumped from the back seat and began to run out across a field. DuBois fired a shot and jumped out of the car following Howell. Several shots were fired and DuBois ran back to the car, telling Stewart, “All right, let’s go.” He said that DuBois threw the pistol out of the car by the stop sign where Austin had told him to throw it. According to the witness, “He pulled a little old double barrell gun, one barrel on top of another one, on me”, took over the driving, and drove on back to Alabama. Stewart testified that he remained quiet and made no report of the matter because DuBois threatened to kill him and his family. He insisted that he knew nothing in advance about any plans to kill Howell. Though Stewart subsequently fled with DuBois to Mexico, and then back to Miami, Florida, he insisted that these actions were occasioned by fear for his life. Stewart did eventually surrender himself to the police and voluntarily return to Arkansas.

Other facts tend to connect Austin with the murder. We list these pertinent facts as follows:

1. Howell was killed by a .22 caliber revolver and Jim Bell of the West Memphis Police Department testified that he found a .22 caliber cartridge casing and Remington-Peters brand .22 cartridges at the home of Joshua Austin, father of appellant. Bell also found a pair of wire pliers and a steak knife at appellant’s home néxt door to the home of the victim.

2. Officer Keen of the West Memphis Police testified that he found a Harrington & Richardson 9 shot .22 revolver at the intersection of Jackson and Woods Streets in West Memphis, not too far from the place where the body was found, being the location where Stewart said Austin had told DuBois to throw the pistol.

S. James Daniel Beck, a firearms expert from the Federal Bureau of Investigation, testified that two of the bullets taken from the victim were fired from a .22 caliber revolver of the type found by Detective Keen. He testified that the bullets were brass coated and manufactured by Remington-Peters, and were the same type as the cartridges found at the home of appellant’s father in Waterloo, Alabama. The witness also testified that a cartridge hull found at the father’s home was definitely fired by the Harrington 8c Richardson 9 shot revolver found at the intersection of Jackson and Woods in West Memphis.

4. Wanda Shaw, appellant’s sister-in-law, testified that she saw appellant shoot a pistol while at the Joshua Austin home in Waterloo on June 12, 1971.

5. Frederick Edwards of the Federal Bureau of Investigation, an expert, testified that fragments of the telephone wires cut at the Howell home matched fragments taken from a steak knife found at the Jerry Austin home. “What I’m telling you is, as I said before, is that the elements that are present in State’s Exhibit 18 [telephone wires] matched the elements in the copper particles and black inclusions on Plaintiff’s Exhibit 20 [steak knife]. And, it either came from that particular source, 18, or some other source that had the same trace elements.”

6. James Shaw, father-in-law of Austin, testified that appellant came to his home on June 11, 1971, and told him that Howell was trying to date appellant’s wife, and “he just said something about he couldn’t get away with it, but he was drinking like everything, he got in a good way though before he left.”

7. Mrs. Gladys Shaw, mother-in-law of Austin, testified that a few nights after June 14, 1971; appellant called her at the home in Savanna, Tennessee, and told her that if any of the police or anyone came around asking questions, to tell her husband to say that he had carried appellant and his wife, Linda, to their home on June 14. Mrs. Shaw replied that her husband would not do that “because he wouldn’t tell a story about it.”

Let it be remembered that Stewart testified that he heard Austin point out the house where Howell lived; that he observed Austin giving DuBois a knife or pliers; that he heard Austin tell DuBois to go up the side of the house and stay in the dark; that he saw Austin assist DuBois in bringing Howell to the car; that he saw Austin point out the location where the pistol should be thrown and where it was actually found. The defense offered no testimony. We hold that the evidence was ample to go to the jury.

Appellant insists that Stewart was an accomplice as a matter of law. We do not agree. Stewart, as heretofore related, testified that he knew nothing about the plan to kill Howell until that event happened, and that his participation was occasioned by fear, being directed by Austin, who held a pistol in his hand, to get into the automobile. After the shooting, he testified that DuBois pulled a gun on him and subsequently threatened his life and that of his family if he revealed the events that had occurred. Of course, there were some facts which tended to discredit this contention; on the other hand, Stewart did not even know the Austins until the night of the murder, and there was no reason for him to be angered or to become exercised because of actions of Howell toward Linda Austin. At any rate, the evidence raised a fact question and it was entirely within the province of the jury to make the determination. The court properly in-strutted the jury on this phase of the case. See Froman and Sanders v. State, 232 Ark. 697, 339 S.W. 2d 601, with particular reference to the citations from Wharton’s Criminal Evidence and Underhill’s Criminal Evidence. In Ford v. State, 205 Ark. 706, 170 S.W. 2d 671. we said, citing numerous other Arkansas cases, that “The rule in this state is that the corroborating evidence need only tend to connect the defendant with the commission of the offense, and not that such evidence of itself be sufficient, and where there is substantial corroborating evidence tending to connect the defendant with the offense, its sufficiency is a question for the jury, together with that of the accomplice.”

In accordance with what has been said, it was for the jury to determine whether Stewart was an accomplice. If they found that he was not an accomplice, of course there was no necessity for any corroboration. On the other hand, if they found him to be an accomplice, we are of the view that the items mentioned under Point One tend to connect appellant with the killing, independent of the testimony of Stewart, and such evidence was sufficient corroboration of Stewart’s testimony to support the conviction.

Affirmed.

Fogleman, J., not participating.

      Beck testified that the barrel of the .22 caliber Harrington & Richardson revolver was rifled with six lands and grooves twisting to the right. As to these bullets, the witness stated:
      “Two of these bullets have been fired from a barrel that has six lands and grooves twisting to the right. However, these bullets do not bear a sufficient amount of microscopic amounts to positively identify the weapon from which it was fired. All that can be said about two of these bullets is that they were fired from a weapon that had six lands and grooves twisting to the right.”

      “Q. Mr. Beck, Plaintiff Exhibit 28, this hull, has been identified previously as coming from Waterloo, Alabama. Is it my understanding that your testimony is that Plaintiff Exhibit 19 [Harrington & Richardson revolver], fired that cartridge hull, to the exclusion of every other weapon in the world?
      A. That is correct. Yes, sir.”

      From the record:
      “No one may be convicted of a felony upon the uncorroborated testimony of an accomplice.
      An accomplice is one who stands by and aids, abets or assists in the perpetration of a crime or who after a crime has been committed, by some affirmative act, harbors and- protects the person who perpetrated the crime. One, who knowing of a crime, harbors and protects the felon from anxiety for his own safety and not to shield the felon is not an accomplice and the mere fact that one remains silent with knowledge that a crime been committed without intending to shield the criminal does not, of itself alone, make him an accomplice.
      If you find that G. W. Stewart was an accomplice you cannot convict the defendant upon his testimony unless you find his testimony is corroborated by other evidence in the case tending to connect the defendant with the commission of the crime; and the corroboration is not sufficient if it merely shows that the crime was committed, and the circumstances thereof. But you are instructed that the amount of such corroborating evidence and its weight is a matter solely for the jury, and if you find that such witness has been corroborated by the evidence, positive or circumstantial, other than his own, tending to show that the crime was committed and connecting the defendant with its commission, you will be justified in convicting the defendant, provided you believe him guilty from all the evidence in the case and beyond a reasonable doubt.”


author: George Rose Smith, Justice.

text:
    NATIONAL TRAILER CONVOY, INC. et al v. TRANSIT HOMES, INC.
    73-26
    494 S.W. 2d 446
    Opinion delivered May 21, 1973

      Louis Tarlowski and Roy Finch Jr., for appellants.

      Howell, Price, Howell <b Barron, for appellee.
   George Rose Smith, Justice.

The appellee, Transit Homes, Inc., of Greenville, S.C., applied to the Arkansas Transportation Commission for a certificate of convenience and necessity authorizing it, as a common carrier, to transport mobile homes by motor vehicle in intrastate commerce in Arkansas. The application was opposed by the three appellants, National Trailer Convoy, Arkansas Transit Homes, and Chandler Trailer Convoy, which are now engaged in that business. After an extensive hearing the Commission ordered that the requested certificate be issued. The Commission’s decision was affirmed by the circuit court. The question here is whether the Commission’s order is contrary to the preponderance of the evidence. We have concluded that it is.

Transit Homes, the appellee, is a substantial concern doing an interstate business throughout almost the entire United States and an intrastate business in most of the states. Its financial ability to expand its operations to include intrastate movements in Arkansas is not questioned. Rather, the narrow issue before us is whether Transit Homes met its burden of proving that the service being rendered by the three appellants is so inadequate that the public convenience and necessity require that another common carrier be permitted to enter the field.

Transit Homes, in building its case, relied primarily upon the testimony of seven witnesses, six of them being employees of mobile-home manufacturers and the seventh being a retail dealer in such homes. All except one of the concerns in question owned or leased their own trucks and used them to transport the great majority of their mobile home units. The various companies called upon the common carriers only when they were unable to move their units with their own equipment.

Three of the witnesses, Brewer, Nance, and Palmer, complained of a condition for which the three protesting carriers cannot fairly be said to be responsible. According to those witnesses, their employers withhold certain bonuses if mobile home units that have been sold during each month are still on the company’s premises at the end of the month. Thus there is an extensive, but somewhat artificial, demand for service at the end of every month. For instance, Nance complained that at the end of one month he called for 24 trucks, upon 24 to 36 hours notice, but he was able to obtain only 8. Nance had no comparable demand for common carrier service during the rest of the month. Obviously the appellants cannot be expected to maintain a fleet of trucks sufficently large to accommodate such once-a-month demands. Moreover, it would appear that the complaining companies might alleviate their own problems by changing their accounting systems so that they would not all demand extra service on the same day of each month.

On direct examination the various witnesses supporting the application testified that additional carrier services were needed. That view, of course, was to their own pecuniary interest, since, as some of them admitted, an additional carrier in the field would give them a correspondingly better chance of finding a truck just when they needed it. In considering a somewhat similar argument with respect to the need for added passenger bus schedules we have said: “There was a showing also that the service rendered was not convenient to all persons along the route between Newport and Little Rock. In answer to this, it may be said that it would unquestionably be a convenience, and a very great one, to have afforded a bus service giving one the opportunity to leave one town for another when he pleased, just as he might do if he were traveling in his own private car. But this is not a necessity within the meaning of the law, which must be construed in its practical application to service of this kind.” Missouri Pac. R.R. v. Williams, 201 Ark. 895, 148 S.W. 2d 644 (1941).

On cross examination, however, the witnesses were for the most part unable to state facts calling for the licensing of another common carrier in the field. The witness Palmer, for example, in effect admitted that his company had no extensive need for common carrier service. He could remember having made only two or three calls for service in four months. Another witness, Richardson, was not his company’s dispatcher and did not know whether one of the appellants, National Trailer Convoy, had been called for service after having been given two days notice. The dealer, Molder, who sells 200 mobile homes a month, had called National for service only twice in 1971, and both calls were in an emergency situation when his own equipment had suffered a breakdown on the highway. The witness Robinson had no present need for common carrier service but speculated about what his needs would be in 60 days, when a leased truck would no longer be available to him. The witness Brewer conceded on cross examination that a month before the hearing he had acquired three new trucks and had had no subsequent need for common carrier service.

On the other hand, the protesting carriers offered proof of their ability to provide satisfactory services, of their willingness to meet any additional needs that night arise, and of the extent to which their trucks were frequently idle, for want of sufficient business to keep them occupied. We have carefully studied the record and have concluded that the applicant did not establish by a preponderance of the evidence that public necessity requires the issuance of the requested certificate.

Reversed.


author: Lyle Brown, Justice.

text:
    Elaine BURNETT v. Bobby Joe BURNETT
    73-27
    494 S.W. 2d 482
    Opinion delivered May 21, 1973

      Simpson ir Riffel, for appellant.

      Burris & Berry, for appellee.
   Lyle Brown, Justice.

Appellant’s motion to set aside a divorce decree was denied and she appeals. The chancellor found that more than ninety days had elapsed between the entry of the decree of divorce and the presentation of the motion, therefore concluding that the motion should be denied.

The petition for divorce was filed April 27, 1972, and personal service was had on June 7, 1972. Appellant did not appear or plead and a decree was entered on July 11, 1972. Some eight days before the expiration of ninety days, appellant filed a motion to set aside the decree. She alleged that she had been advised by the husband that the action would be dismissed, that she was not notified of the hearing which resulted in the decree, and that she had a valid defense. Appellant contends that the chancellor should have granted a hearing on the motion because her motion was filed within 90 days of the entry of the decree, citing Ark. Stat. Ann. § 22-406.4 (Supp. 1971).

We find it unnecessary to interpret the recited statute because, as pointed out by appellee, appellant did not make a prima facie showing of a valid defense. Our Ark. Stat. Ann. § 29-509 (1962 Repl.) provides that a judgment shall not be vacated “until it is adjudged that there is a valid defense to the action. . .” The word “valid” as used in the statute means “meritorious”. Berringer v. Stevens, 145 Ark. 293, 225 S.W. 14 (1920). In Nichols v. Arkansas Trust Co., 207 Ark. 174, 179 S.W. 2d 857 (1944) we said:

In a long line of cases beginning with State v. Hill, 50 Ark. 458, 8 S.W. 401, and extending to O’Neal v. Goodrich Rubber Co., 204 Ark. 371, 162 S.W. 2d 52, and Davis v. Bank of Atkins, 205 Ark. 144, 167 S.W. 2d 876, this statute has been construed as imposing the requirement that a prima facie showing of a valid defense be made before the judgment will be vacated, although it is shown that it was rendered without notice.

Later holdings of the same import are Haville v. Pearrow, 233 Ark. 586, 346 S.W. 2d 204 (1961), and Agee v. Wildman, 240 Ark. 111, 398 S.W. 2d 542 (1966).

Affirmed.