author: John A. Fogleman, Justice.

text:
    Garland ANTHONY Jr. et ux v. FIRST NATIONAL BANK OF MAGNOLIA et al
    5-4524 & 5-4525
    431 S. W. 2d 267
    Opinions delivered May 27, 1968
    [Rehearing denied September 3, 1968.]

      Dickey & Dickey, for appellants.

      Keith, Clegg & Eckert, for appellees.
   John A. Fogleman, Justice.

These suits were originally brought to recover $100,665.65 on 10 notes of Garland (Jiggs) Anthony, Jr. dating from August 27, 1957, and to foreclose three mortgages or deeds of trust given by appellants.

After first filing a general denial, appellants admitted liability on 6 of the 10 notes, but denied liability on the remainder, among which were notes No. 65935 executed in 1958 in amount of $23,000, No. 86019 in amount of $3,980.29, and No. 87602 in amount of $2,-360.49. Appellants later admitted liability on note No. 84798 in amount of $15,321.88. Notes No. 86019 and No. 87602 were given for interest on the other two notes. In the amendment to the answer, appellants asserted as defenses: (1) lack of consideration for the original obligation; (2) a guarantee of non-liability made to Garland Anthony, Jr. by the bank acting through its president; and (3) unclean hands on the part of the bank. In the same pleading there was a cross complaint for judgment over against one W. C. Blewster in the event that appellants were found liable on the basis that a letter of guarantee over the signature of Blewster was interpreted to be his personal guarantee to Garland Anthony, Jr, rather than that of the bank. A further amendment to the answer of appellants asserted the defense of fraud and misrepresentation. This defense was based on the following allegations: that W. C. Blewster as president and agent of appellee bank misrepresented to Garland Anthony, Jr. that Anthony would not be required to repay the loan; that the note was required to assist the bank in its compliance with'banking regulations and nothing more; that a letter of guarantee given by W. C. Blewster as president was further assurance that Anthony would not be called upon to repay said obligations; that Anthony relied upon these representations to his detriment and to the benefit of the bank; that the board of directors of appellee bank either expressly held out to Garland Anthony, Jr. that Blewster was acting within the scope of his authority or acquiesced in allowing said representations after it knew or had reason to know of such dealings by Blewster; that appellees occupied a superior bargaining position and influence over Anthony; and that the acts of Blew-ster, as the bank’s president, were a breach of fiduciary responsibilities. This amendment contained a counterclaim for judgment against the bank in amount of any judgment against appellants predicated upon the execution of these notes as an accommodation to appellees.

Appellees’ reply was a general and specific denial of allegations of the second amendment and counterclaim. Appellees also asserted that any guarantee to Garland Anthony, Jr. was ultra vires and denied any knowledge or acquiescence by the Board of Directors. Appellees further denied that Anthony accommodated the bank, asserting that the accommodation was for the benefit of Avalene Whitten, a sister of Garland Anthony, Jr., and her husband, Vernon. They also pleaded laches, waiver, estoppel, acquiescence and ratification on the part of Garland Anthony, Jr., based upon alleged interest payments and failure to deny liability until institution of these suits.

The chancery court gave judgment against Garland Anthony, Jr. on note No. 65935 for the principal balance with interest and attorney’s fees, and judgment against Blewster in favor of appellant. It cancelled a deed of trust purportedly given by appellants on their home in Dallas County. No action was taken regarding notes No. 86019 or No. 87602. The chancellor found: that the letter of guarantee referred to in the pleadings was the personal guarantee of Blewster; that Garland Anthony, Jr. had recognized his liability from time to time by payment of interest, and never asserted that he was not liable on the note until after Blewster was dismissed as president; that the note was executed by Garland Anthony, Jr. as an accommodation for his sister and brother-in-law as owners of Garland Anthony Lumber Company, to which credit was given for the proceeds of the note; that a guarantee of non-liability by the bank would have been ultra vires and illegal; that there was valid consideration for the note; that the defense of unclean hands was not sustained because it was not shown that any improper activities of Blewster were known or approved by the board of directors; that Garland Anthony, Jr. should not escape liability for an act which, if wrongful, was made to deceive bank examiners or other persons; and that Blewster had admitted liability to Garland Anthony, Jr.

Appellee Wilson Rogers, assistant vice president of appellee bank, was the only witness offered by appel-lees. He identified the note in question and stated that interest had been paid on No. 65935 to August 10, 1964, and that there had been one principal payment of $55, leaving a principal balance of $22,945.00. He said that notices for interest payments had been mailed regularly every three months to Garland Anthony, Jr. He also stated that the interest rate shown on the note had been changed from 6% to 7% with Anthony’s consent. There is no question about the proceeds of this note having gone to the account of Garland Anthony Lumber Company, a concern owned by Avalene and Vernon Whitten, the sister and brother-in-law of Garland Anthonyv Jr., and John Franklin Anthony, his brother.

W. C. Blewster was president and chairman of the board of directors of appellee bank from 1942 until he resigned in November 1964. Until his connection with the bank was severed, he handled all of the transactions involved in this litigation and seems to have had a rather free hand in conducting the bank’s business.

Garland Anthony, Jr. had done business with the bank since 1941. While his loan account was paid in full in 1951, he seems to ha/e had a series of business failures after that time. In all of these businesses he in-ciirred debts which, he liquidated by borrowing money from appellee bank. He also borrowed money for living expenses and to pay premiums on life insurance pledged to appellee bank as security. He mortgaged timber lands of the value of $82,000 to secure these debts. The notes on which he admitted liability constituted a part of these debts. He was allowed by the bank to keep a supply of blank notes on hand. He usually arranged for loans over the telephone, after which he would fill in and sign, a note and attach it to a draft for the loan proceeds.

Blewster solicited the account of Garland Anthony Lumber Company for the bank in 1943. He took care of its financial needs at all times and even arranged to “farm out” loans to other banks when the company had exceeded his bank’s legal limits on loans. The Whit-tens had the utmost faith and confidence in Blewster because they knew he could get financial assistance for them whenever they needed it. This assistance was not limited to this business venture, but included a loan of money to a wholesale lumber concern in which Whitten had to be a silent partner because OPA regulations forbade his ownership in such a business. Blewster even arranged for the purchase of lumber by this concern and was paid commissions which he later refunded when financial difficulties arose. The Garland Anthony Lumber Company was permitted to incur overdrafts, in substantial amounts. The Whittens had, on occasion, left blank notes in Blewster’s hands to be used in case of overdrafts. Blewster carried these as “cash items” in the bank’s assets rather than permitting the bank account to be overdrawn, but they aie usually referred to by the parties as overdrafts.

Shortly before the execution of the note in issue, Blewster called Vernon Whitten and said something would have to be done about an accumulated overdraft of $23,000. When Whitten went to the bank to discuss the matter, Blewster said to let him work on it. This was about the time when Blewster expected bank examiners, and lie was doing everything he conld to get all cash items and overdrafts ont of the hank. There is a conflict in the testimony as to what happened from this time on. Blewster said that the matter was discussed with the "Whittens several times and that they stated that they had no way in which they conld pay this amount and that he suggested that they go to Garland Anthony, Jr. to see if some arrangement could he made. He testified, however, that he went to Anthony on his own. Mr. and Mrs. Whitten hoth say they made no request of “ Jiggs” and didn’t talk to him about the matter either before or after their conversations with Blew-ster. They said that they were not close to “Jiggs,” would not have asked him to help, and did not think he would have done so if they had asked. Mrs. Whitten says that she did not authorize Blewster to contact her brother and would have objected had she known that he intended to do so. Vernon Whitten said that they did not ask Blewster to find a solution for them, insofar as going to Anthony, individually, was concerned, but that Blewster said to give him a little time and he would see what he could work out. Blewster says he feels sure that he did tell them he was going to Garland Anthony, Jr. At any rate, Blewster called Anthony. Anthony states that Blewster said, “we’re in trouble” and that he felt Anthony could help. Blewster advised Anthony of the overdraft situation. Blewster says that he discussed the matter with Anthony on the basis of his borrowing $23,000 to cover the overdrafts. Anthony says that Blewster told him these items must be paid before bank examiners appeared but assured him he would not have to pay the note. He says that he agreed to sign a note only because he anticipated future dealings with th,e bank, he was assured he would never have to pay the note, and he felt obligated for accommodations by the bank through Blewster. He said that it was done for the express purpose of helping the bank with examiner? and that there was no request to him from the partners of Garland Anthony Lumber Company. He did say that his sister expressed her appreciation in ,a passing statement made sometime later.

At any rate, G-arland Anthony, Jr. did execute the note and was given a guarantee or indemnity agreement. This agreement was written on the letterhead of the hank, was addressed to Anthony, and read as follows:

“Regarding the matter of a $23,000.00 loan to this Bank for the benefit of Garland Anthony Lumber Company, I wish to personally guarantee this loan in the full amount.
Very truly yours,
/s/ W. O. Blewster
President”

Blewster testified that he told Anthony that efforts were being made to get a Small Business Administration loan for the Garland Anthony Lumber Company and that he thought this note would be only a temporary loan which would be paid out of the proceeds of 'the SBA loan. Anthony testified that Blewster guaranteed him he would never have to pay the note. He claims that he was assured that his signing this note would result in a substantial favor to the bank.

Blewster advised the Whittens of the result of his conversation with Anthony. Whitten says that when Blewster called, he asked that he and his wife come over. When they did, Blewster reported that he had worked the matter out for them. He filled out a note for them to sign and said he had to go to “Jiggs” on this. He first testified that they signed a note to “Jiggs” for $23,000, but later he was uncertain as to whether Anthony or the bank was the payee of the note. Mrs. Whit-ten said that Blewster stated that Anthony had done this as a favor to the bank. She signed the note presented by Blewster without looking to see who the payee was. Vernon Whitten said that Blewster said that ‘Gve gave Jiggs a letter of guarantee” and that Anthony would not have to pay, without any suggestion that Blewster was personally guaranteeing Anthony that payment of the debt would he made. While Blewster testified that he was acting as president of the hank, his testimony leaves no doubt about his intention that the guarantee be his own personal obligation, even though he did not contemplate that the payment of the debt would be made with his own funds. Bather, he hoped that the lumber company would be able to make the payment. It was unable to do so when the SBA loan was not made. Efforts to retire this debt through a sale of the company to other owners were likewise unsuccessful. For some unexplained reason, Blewster held the Whitten note (which showed Anthony as payee when delivered) and' never gave it to G-arland Anthony, Jr. He delivered it to appellants ’ attorney only two or three weeks prior to his testimony in this case. Anthony claiiiis that he never knew of the note.

Blewster was asked several times about the reason for getting the note from Garland Anthony, Jr. and giving the guarantee. He always emphasized getting the cash items out of the bank. He mentioned both getting the bank in condition for examination and helping the Whittens. Finally, he says that “Jiggs” Anthony was accommodating the Garland Anthony Lumber Company to get the cash items out of the bank and that both the lumber company and the bank were accommodated by getting the overdraft out. Anthony admitted that his sister benefited but now claims that this was only incidental to the transaction.

Notice of interest payments was sent to Garland Anthony, Jr. as they became due. Anthony admits that he made the first payment, although he claims he did so inadvértently. Later he forwarded the notices to Garland Anthony Lumber Company which made payments until the sale of the company to new owners in 1962. Garland Anthony, Jr. paid interest thereafter at the insistence of the bank. He admits having paid $4,500 on the note. He says that he did so for the same reasons he sighed the note. He claims to have notified Winston Wilson, an officer and director of the bank, sometime in 1963 that this note and one in the amount of $20,000, written to cover an overdraft of another concern in which Vernon Whitten was interested, were not his obligations but those of Blewster. Wilson testified that Anthony never denied liability on the note, but merely said that one of the notes was made for the benefit of Blewster and that he had a note or letter of guarantee and that Blewster owed him part of the money. According to Wilson, this conversation took place “after 1963 or 1964.” An inference might well be drawn that this conversation took place after Blewster left the bank, although there is testimony from which an opposite inference might be drawn.

We are unable to say that the findings of the chancellor are clearly against the preponderance of the evidence. The conduct of Blewster, even if attributed to the bank, is not the kind of corrupt conduct justifying the denial of relief under the clean hands doctrine. The actions of Blewster in the matter were not coercive in any way, nor was Anthony under any legal duress. Representations made by Blewster were not of existing facts but of future prospects and were not such as would form the basis of fraud.

In order to sustain their defense based on the “clean hands” maxim, appellants refer to the actions of the bank president in manipulating and controlling notes for the bank’s sole benefit without the maker’s or payee’s knowledge or request, in controlling customers’ accounts without their knowledge or request, in signing checks on customers’ accounts himself, in directing that dummy or fictitious invoices be attached to notes as security for loans, in borrowing money from customers’ accounts without their knowledge or consent, and in devising means of avoiding criticism of overdrafts from bank examiners in instances not related to the obtaining of the particular note in question. It is well settled that wrongs collateral to a complainant’s canse of action may not be invoked as a defense under this maxim. The wrong must have an immediate and necessary relation to the equity complainant seeks to enforce or must affect in some manner equitable relations of the parties in respect to some matter before the court for adjudication. Batesville Truck Line, Inc. v. Martin, 219 Ark. 603, 243 S. W. 2d 729.

Appellants also argue that replacing the overdraft of Garland Anthony Lumber Company with Garland Anthony’s note on which he was protected from liability by a secret agreement constituted a fraud, bringing into play the “clean hands” maxim in his favor. If this constituted a fraud, appellants were not the ones defrauded, and Garland Anthony was a party to the fraud. It is also well settled that one guilty of fraud in a transaction may' not invoke the maxim as that would violate the clean hands principle. Sliman v. Moore, 198 Ark. 734, 131 S. W. 2d 1. Even if deception of bank examiners had been the only purpose of the note in question, this was as well known to Anthony as it was to Blewster, and the “clean hands” defense would not be available to him.

Appellants also contend that there was no consideration for the note, it having been given as an accommodation to the bank. As between accommodating and accommodated parties, the consideration may be shown to be wanting. Boqua v. Brady, 90 Ark. 512, 119 S. W. 677. The burden of proof was upon appellants in this regard, however. Ark. Stat. Ann. § 68-124 [Repl. 1957]; Johnson v. Ankrum, 131 Ark. 557, 199 S. W. 897; Fisher v. Rice Growers Bank, 122 Ark. 600, 184 S. W. 36. Garland Anthony, Jr. admitted that the note was given to help his sister on account of obligations she had made in excess of her credit. There can be no doubt that Garland Anthony Lumber Company received the benefit of the proceeds of the note or that Garland Anthony, Jr. knew that it would. The accommodated party was the lumber company. The court might well have found that the "Whittens authorized Blewster to make the approach to Anthony on this matter, and they certainly accepted the benefits and acknowledged their obligation to him by executing their note, even though it was not delivered to him. The accommodation of these parties constituted valid consideration for the note signed by Anthony.

Anthony sought to establish a pattern of dealing for the benefit of the bank in this manner by testifying of another such transaction which culminated in the execution of note No. 84789 by him. Oddly, he admits liability on this very note. This transaction involved an overdraft of the enterprise in which Whitten was a silent partner. While Anthony says he executed a note for $20,000 without knowing who was involved, he received in return a note of this concern signed by the known partner for the same amount with W. O. Blewster’s personal endorsement thereon. His admission of liability on the note which replaced his original note lends support to the chancellor’s findings rather than to appellants’ position.

In Fisher v. Rice Growers Bank, supra, this court affirmed the judgment of a chancery court sustaining the validity of a note given by the makers in order to cover overdrafts of a friend who was an officer of the payee bank. There it was said that the signing of the notes was not an accommodation merely to the bank, but was in order to help a friend out of a difficulty. We cannot say that the chancellor’s finding on this point is clearly against the preponderance of the evidence, as the signing of the note to help a sister and brother-in-law out of a difficulty could well remove the transaction from the category of merely accommodating the bank. While appellants argue that the note was given wholly for a pre-existing debt, there is evidence that the amount of the note was deposited to the account of G-arlaiid Anthony Luidiber Company and.that a note or cheeks for less than the amount of the note sued on were charged against this account subsequent to or at the time of the deposit. “Whether the indebtedness to the bank was evidenced by the lumber company’s checks or its note at the time, the obligation was surrendered in favor of the new note.

Many of appellants’ contentions are based on their view that the guarantee executed by Blewster was that of the bank. While we cannot say that there was no basis for this contention, or that the letter is without ambiguity, there is evidence that both Blewster and Anthony considered this as a personal guarantee. We have pointed out evidence tending to support the contrary finding by the trial ¡judge. It cannot be said that these findings were against the preponderance of the evidence, particularly in view of the fact that Blewster was indebted to Whitten on an accounting from a business venture. The letter of guarantee written by Blewster, unlike the letter written by the bank president in Binghamton Trust Co. v. Auten, 68 Ark. 299, 57 S. W. 1105, relied on by appellants, pertained only to the guarantee and not to other matters relating to the bank’s participation in the transaction. (In the cited case, the bank president’s fraudulent representations, not his endorsement, were charged to the bank.) Furthermore, there is evidence which would justify a finding that Blewster was acting for the Whittens in this instance.

Appellants’ next point is that there was error in failing to find that the bank was barred from recovery by reason of fraud and fraudulent, misrepresentations on the part of Blewster. They base this contention upon statements by Blewster that Anthony would not have to pay the note and that it would be paid out of a Small Business Administration loan and the failure of Blewster to inform him that a bank could not legally guarantee its own loan or that deceiving the bank examiners might be a violation of law. As previously pointed out, we do not feel that the trial court’s finding that the guarantee to Anthony was given by Blewster personally, rather than on behalf of the bank, is clearly against the preponderance of the evidence. An honest but erroneous expression of opinion or belief is not fraud, even though made in terms of positive personal knowledge. One making such a statement concerning a matter not susceptible of exact knowledge in good faith is not liable for its falsity. National Life & Accident Ins. Co. v. Hitt, 194 Ark. 691, 109 S. W. 2d 426. Representations that are promissory in nature or of facts that will exist in the future, though false, do not support an action for fraud. Harriage v. Daley, 121 Ark. 23, 180 S. W. 333; Bankers’ Utilities Co. v. Cotton Belt Savings & Trust Co., 152 Ark. 135, 237 S. W. 707; Abramson v. Franks, 194 Ark. 971, 109 S. W. 2d 1271. The rule just stated would not apply if Blewster had made a false promise knowing at the time it would not be kept. Victor Broadcasting Company v. Mahurin, 236 Ark. 196, 365 S. W. 2d 265. Yet, there is nothing to show that Blewster did not have absolute confidence that Garland Anthony Lumber Company would receive an SBA loan from which the note payable to Anthony, which he obtained from the Whittens, would be paid. His good faith in i making this representation was indicated by his willingness to execute a personal guarantee. Appellants’ contention is that the transaction violated 18 USC § 656 prohibiting misapplication of funds of the bank. But the cancellation of the overdrafts by reason of, or from the proceeds of, the Garland Anthony, Jr. note could hardly be said to make the bank’s position worse or to constitute a misapplication of funds. See Adler v. United States, 182 F. 464 (1910). We find no basis here for disturbing the findings of the chancellor.

In a case such as this where the testimony is so conflicting, even to the extent that there are conflicts in different portions of the testimony of individual witnesses, the advantage of the trier of the facts in the opportunity to observe the conduct, manner and demean- or of the witness is significant. We are unwilling to say that his findings are against the preponderance of the evidence.

Appellants argue that the court erred in not finding that appellees were estopped to assert liability on this note. While we find no support for this argument, es-toppel was not pleaded and appears to be asserted for the first time on appeal.

The court failed to act on notes No. 86019 and No. 87602. It appears that they are included in judgments for interest, so they should be cancelled.

The decree is modified to cancel the notes just described, and, as modified, is affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Garland ANTHONY Jr. et ux v. FIRST NATIONAL BANK OF MAGNOLIA et al
    5-4524 & 5-4525
    431 S. W. 2d 267
    Supplemental opinion delivered September 3, 1968
   John A. Fogleman, Justice.

Appellants state in their motion for rehearing that notes #86019 and #87602 have been paid from funds handled by the First National Bank of Magnolia, through mistake and without any authority from appellants. The inference is that this was done without the knowledge of the appellants until sometime after the trial of the case.

A re-examination of the record in this case shows that these notes were never offered in evidence, although copies were exhibited with the complaint. While there is an admission on the part of Garland Anthony, Jr. that he executed these notes, appellants are correct that their validity as evidence of an indebtedness by'him was questioned throughout the proceedings and on this appeal. Judgment could not have been rendered in favor of appellants without the introduction of the original notes or an explanation for the failure to do so. Clark v. Shockley, 205 Ark. 507, 169 S. W. 2d 635. This reexamination also reveals that the statement in the original opinion that these notes were included in judgments for interest may not be justified. The record reflects that it was conceded through statements of counsel that these notes related to interest attributable to note #65935. The record is not clear as to the exact manner in which these notes were handled. It is not entirely clear whether the bank loaned money to Garland Anthony, Jr. which was then applied to payment of interest, or whether the notes merely represented accrued interest. Neither is it clear whether one of these notes might represent a part of the $4,500 which Anthony admits having paid on the principal obligation. In any event, liability on the notes was controverted and they were never introduced in evidence. For this reason the decree of the trial court should have denied recovery thereon.

In appellees’ brief it was stated that these notes were not in issue and that they had been previously paid by agreement of the parties during pendency of the action. In a reply brief, appellants appropriately called attention to the fact that this statement is unsupported by the record. The record does reflect that counsel for appellees, during the trial, stated that liability on these notes was still in issue.

Appellants now ask that this amount be credited against the judgment rendered against Garland Anthony, Jr. There is nothing in the record before us to justify this action. It is not clear to us whether the application of funds complained of by Mm was made before or after the rendition of the decree in the lower court.

Rehearing is denied without prejudice to any right appellants might have to apply to the trial court for any relief to which the facts might show them to be entitled on account of newly discovered evidence and without prejudice to any recovery to which appellants might be entitled in a separate action because of matters arising or occurring after the rendition of the decree in the lower court.

Byrd, J., dissents.


text:
    Winthrop ROCKEFELLER, Governor et al v. Ernest HOGUE et al
    5-4594
    429 S. W. 2d 85
    Opinion delivered May 27, 1968
    [Rehearing denied July 15, 1968.]

      Wright, Lindsey & Jennings, for appellants.

      Sam Robinson, Gene Worsham, Nathan Gordon, William S. Arnold and William J. Smith, for appellees.
   John A. Fogleman, Justice.

This appeal comes from a decree of the trial court enjoining the Governor and other appellants from proceeding with efforts to remove any of the members of the Arkansas Game & Fish Commission. The decree of the lower court was rendered on the pleadings and a stipulation of the parties. The chancery court based its decision in this suit brought by certain members of the Commission upon the finding that § 5 of Amendment No. 35 of the Arkansas Constitution was not self-executing. It is conceded by the parties that the only question on this appeal is whether this section is self-executing. Section 5 is one of eight sections of the amendment initiated by the people and adopted in 1944, dealing comprehensively with conservation and regulation of wildlife of the state. The amendment creates a Game & Fish Commission of 7 members, each of whom is appointed by the Governor for a seven-year term. The first members were appointed for terms varying from 1 to 7 years, so that the terms would be staggered with the term of one member expiring each year. There are provisions for removal of commissioners, the filling of vacancies, and the election of a Chairman and an Executive Secretary. The powers and,duties of the commission are also set out. This court has called the amendment complete in itself, superseding all prior legislative acts, both directive and restrictive, and covering the whole subject. W. R. Wrape Stave Co. v. Arkansas State Game & Fish Commission, 215 Ark. 229, 219 S. W. 2d 948. The section in controversy reads:

“A Commissioner may be removed by the Governor only for the same causes as applied to other Constitutional Officers, .after a hearing which may be reviewed by the Chancery Court for the First District with right of appeal therefrom to the Supreme Court, such review and appeal to be without presumption in favor of any finding by the Governor or the Trial Court.”

Appellants say that the section is self-executing and may be utilized without the necessity of legislation to make it effective. On tbe other hand, appellees contend that the provision is not self-executing because it constitutes a statement of principles only making legislation laying down rules providing means of carrying the principles into effect necessary to put it in force. Ap-pellees state that they are not, at this time, particularly concerned with the question whether the hearing procedure which has been adopted by the Governor satisfies the constitutional direction of a hearing by the Governor except insofar asUhat procedure illustrates the lack of guidelines for procedures and the absence of limitations on the Governor’s power to establish the rules for such a hearing. Generally speaking, those matters asserted to indicate that the section is not self-executing are:

I.The failure to prescribe procedures does not assure to an accused commissioner due process of law guaranteed by Article 2 of the Constitution of Arkansas and Amendment 14 to the United States Constitution in that:
A. The governor might act summarily: to remove dll. commissioners ex parte.
B. He could remove the entire commission in order to gain control over the commission.
C. There is a lack of requirement for:
1. notice of charges;
2. reasonable notice of hearing;
3. right to make defense;
4. right to appear in person or by counsel;
5. preservation of record;
6. compulsory attendance of witnesses and production of documents;-
7. public hearing.
D. No rules of evidence are provided.
E The place and forum of hearing are not fixed.
F. The nature and type of and time limitation on, review by chancery court and appeal to this court are not prescribed.
G-. The burden of proof is not placed.
H. No mention is made of the weight to be given a decision of the chancery court.
II. The section might result in vacation of a removed commissioner’s position immediately upon the finding of cause for removal by the Governor in spite of the right of review by the Chancery Court of the First District and appeal therefrom to this court.

There is a presumption of law that any and every constitutional provision is self-executing. Myhand v. Erwin, 231 Ark. 444, 330 S. W. 2d 68. The impact of this presumption should be especially great where the provision in question was initiated by the people.

One of the principal tests as to whether a constitutional provision is self-executing is the determination, from its language, its nature, and its objects, whether it is addressed to the legislative branch or to the judicial branch. Arkansas Tax Commission v. Moore, 103 Ark. 48, 145 S. W. 199; Myhand v. Erwin, supra. We see nothing that suggests that Amendment 35 is addressed to the legislative branch. Considerable reliance is placed by appellees on Griffin v. Rhoton, 85 Ark. 89, 107 S. W. 380. This case is readily distinguishable. The constitutional provision there involved reads:

“§ 23. Maximum of officers’ salaries or fees. — No officer of this State, nor any county, city or town, shall receive, directly or indirectly, for salary, fees and perquisites more than five thousand dollars net profits per annum in par funds, and any and all sums in excess of this amount shall be paid into the State, county, city or town treasury as shall hereafter be directed by appropriate legislation.”

In holding this section not to be self-executing, we said:

“There is a strong implication from the concluding phrase of the provision in question — ‘ as shall hereafter be directed by appropriate legislation’ — that the framers of the Constitution did not mean it to be self-executing, but intended that the whole provision should be put into force by appropriate legislation. This is greatly strengthened by a consideration of the general and indeterminate character of the language employed. In the first place, the provision for payment of the excess .over $5,000 ‘into the state, county, city or town treasury’ is, at least so far as the office of prosecuting attorney is concerned, too indefinite to be properly enforced without legislation. The language, standing alone, would mean that all state officers shall pay the excess into the state treasury, and county officers into the county treasury; yet, when we remember the source whence the fees of a prosecuting attorney come, the language is too general to warrant a conclusion that so unjust a disposition of the excess in his case as payment into the state treasury was intended. As is well said by learned counsel for appellant, probably 90 per cent of fees in felony convictions and 50 per cent of fees for convictions for misdemeanors are paid to the prosecuting attorney by the counties of their respective districts. The state pays only a small part of that officer’s compensation — the maximum salary to be paid by the state is fixed at $400 in the Constitution. * * * if we give the provision in question a literal interpretation, and hold it to be self-executing, it would require the excessive fees gathered by some of the prosecuting attorneys from the counties composing their circuits to be paid into the state treasury to become a part of the common funds of the state. We do not say that the Legislature cannot prescribe such a disposition of the surplus funds, however unjust it may appear to be, in carrying out the constitutional provision; but we do say that the apparent injustice of such a disposition of the funds affords much reason for not ascribing such a meaning to the general form of expression employed. In the next place, the words ‘net profits per annum in par funds,’ when applied to emoluments of office, are so indefinite that it would be extremely difficult if not impossible to judicially determine, without legislation on the subject, what are ‘net profits * * * in par funds.’ What basis should the court adopt in ascertaining what are net profits of the office? What expenses are to be deducted? And what tribunal is to pass upon the accounts of the prosecuting attorney, ascertain what his legitimate expenses have been, and fix the amount which he should pay into the treasury? This is a matter-easy of solution for a legislative body, but not for tribunals exercising purely judicial functions, unless the Legislature first provides a basis for determining what the profits of the office are. Of course, if we should reach the conclusion that the provision in question is self-executing, then it would devolve upon the courts, in'the absence of legislation on the subject, to work out in as nearly an approximately just method as possible what the expenses and net profits of this office are, but the almost insurmountable difficulties in the way of doing it without legislation affords the strongest reason for concluding that the provision was not intended to be self-executing.”

The section under examination in the Griffm case was addressed in express words to the General Assembly, not the courts. The problems for the judicial branch here, such as confining procedural steps within the boundaries of due process, are not as great as the problems which would have been presented in the Griffin case. Unquestionably, the problems there were legislative, not judicial. On the other hand, those appearing here are primarily judicial, rather than legislative. The fact that review of the action is to be by the courts is an indication that the provision is addressed to the courts. That 25 years have passed without any implementing or enabling legislation by the General Assembly would indicate that it agrees that the provision was not addressed to it and that legislation was not required to effectuate it. It seems strange that the legislature proposed Amendment No. 42, governing the State Highway Commission, using Amendment 35 language relating to gubernatorial removal of commissioners, but failed for all these years to adopt implementing legislation for either amendment if it thought such language was not self-executing. Legislative interpretation, of course, is not controlling, but is to be considered, if there be any doubt. Hooker v. Parkin, 235 Ark. 218, 357 S. W. 2d 534; Arnold v. City of Jonesboro, 227 Ark. 832, 302 S. W. 2d 91. See, also, United States v. Bowling, 256 U. S. 484, 41 S. Ct. 561, 65 L. Ed. 1054 (1921); California School Township, Starke County v. Kellogg, 109 Ind. App. 117, 33 N. E. 2d 363 (1941); Stanford v. Butler, 142 Tex. 692. 181 S. W. 2d 269, 153 A. L. R. 1054 (1944); Chatlos v. McGoldrick, 302 N. Y. 380, 98 N. E. 2d 567 (1951); 2 Sutherland Statutory Construction, 3rd Ed., § 5110.

The most closely parallel case is Cumnock v. City of Little Rock, 168 Ark. 777, 271 S. W. 466. There we held the following proviso of Amendment 10 (then called 11) self-executing:

“Provided, however, to secure funds to pay indebtedness outstanding at the time of the adoption of this amendment, counties, cities and incorporated towns may issue interest bearing certificates of indebtedness or bonds with interest coupons for the payment of which a county or city tax, in addition to that now authorized, not exceeding three mills, may be levied for the time as provided by law until such indebtedness is paid.”

A dissenting opinion aptly pointed out that the proviso made no provision for the following rather vital matters with reference to issuance of such bonds:

the length of time they should run; K
the rate of interest they should hear; W
Avho should execute them; W
whether they should be sold privately or at public auction; ^
in what denominations they should be issued; U3
whether they should be sold below par. CD

It seems that legislative action would have been called for to a greater extent there than here.

The remaining test, and the controlling one, is whether the people, in adopting this section, intended that it be self-executing. Faubus v. Kinney, 239 Ark. 443, 389 S. W. 2d 887. Unless it clearly appears that they did not so intend, we must hold this provision to be self-executing for reasons heretofore set out and for the further reason that no construction of a given power is to be allowed which plainly defeats or impairs the avowed objects. Ex Parte Levy, 204 Ark. 657, 163 S. W. 2d 529. It is our duty to construe a constitutional provision in such a way that an express purpose or implied result will be given effect. Humphrey v. Garrett, 218 Ark. 418, 236 S. W. 2d 569. The remaining arguments of appellees are addressed to this test.

"We find no merit in their argument that a Governor might act summarily and that an accused commissioner might not be accorded due process of law. In the first place, we must and should presume that any officer of the state, and especially the chief of the executive branch of the government, will act lawfully, correctly, in good faith and in sincerity of purpose in the execution of his duties. Rose v. Ford, 2 Ark. 26; Buxton v. City of Nashville, 132 Ark. 511, 201 S. W. 512; Ellison v. Oliver, 147 Ark. 252, 227 S. W. 586; Phillips v. Rothrock, 194 Ark. 945, 110 S. W. 2d; Matthews v. Bailey, 198 Ark. 703, 130 S. W. 2d 1006; Beaumont v. Faubus, 239 Ark. 801, 394 S. W. 2d 478.

Furthermore, summary action is not consistent with removal after a hearing for which there is express provision in the section itself. Where an officer can be removed for specified causes only, he must he afforded a hearing beforehand. Lucas v. Futrall, 84 Ark. 540, 106 S. W. 667. The requirement of a hearing implies that the accused be given reasonable notice with a statement of charges sufficient to apprise him of the action or actions alleged to constitute the cause or causes of removal. Lucas v. Futrall, supra; Mechem, Public Officers, § 454 p. 287; State ex rel. Beck v. Young, 154 Neb. 588, 48 N. W. 2d 677 (1951); Norton v. Adams, 24 R. I. 97, 52 Atl. 688 (1902). See, also, Annot, 135 Am. St. Rep. 256. The use of the word “hearing” implies certain essential elements as quoted in Wisconsin Telephone Co. v. Public Service Commission, 232 Wis. 274, 287 N. W. 122 (1939):

“There are at least three substantial elements of a common-law hearing: (1) The right to seasonably know the charges or claims preferred; (2) the right to meet such charges or claims by competent evidence; and (3) the right to be heard by counsel upon the probative force of the evidence adduced by both sides, and upon the law applicable thereto. If either of these rights is denied a party, he does not have the substantials of a common-law hearing Ekern v. McGovern, supra. [154 Wis. 157, 142 N. W. 595, 46 LRA (n. s.) 796]”.

We agree with the parties that the phrase “for the same causes as apply to other constitutional officers”, means for high crimes and misdemeanors and gross misconduct in office. Any hearing on charges of this gravity would certainly require that one accused he heard, both personally and by counsel, and that he be permitted to produce evidence in his defense. Etzler v. Brown, 58 Fla. 221, 50 So. 416 (1909); Emerson v. Hughes, 117 Vt. 270, 90 A. 2d 910, 34 ALR 2d 539 (1952); Farish v. Young, 18 Ariz. 298, 158 Pac. 845, (1916); State v. Frazier, 47 N. D. 314, 182 N. W. 545 (1921); People v. Nichols, 79 N. Y. 582 (1880).

In short, any officer, board, tribunal or agency having the power to remove, for cause, an officer serving a fixed term acts in a quasi-judicial capacity in conducting a hearing and the procedure must be of a quasi-judicial character. Emerson v. Hughes, 117 Vt. 270, 90 A. 2d 910, 34 ALR 2d 539 (1952); Hawkins v. Grand Rapids, 192 Mich. 276, 158 N. W. 953, Ann. Cas. 1917E 700 (1916); Speed v. Detroit, 98 Mich. 360, 57 N. W. 406, 22 LRA 842, 39 Am. St. Rep. 555 (1894). As such the procedure must assure a fair trial and due process of law. McAlpine v. Garfield Water Commission, 135 N. J. L. 497, 52 A. 2d 759, 171 ALR 172 (1947); Ekern v. McGovern, 154 Wis. 157, 142 N. W. 595, 46 LRA (n. s.) 796 (1913.) It would seem highly desirable that any hearing be public, and certainly it should be if any accused commissioner so desired.

It is not necessary that every detail for application of a constitutional provision be specified in order that it be self-executing. See, Samples v. Grady, 207 Ark. 724, 182 S W. 2d 875; Cumnock v. Little Rock, 168 Ark. 777, 271 S. W. 466; Dullam v. Willson, 53 Mich. 392, 19 N. W. 112, 51 Am. Rep. 128 (1884); State v. Young, 154 Neb. 588, 48 N. W. 2d 677 (1951). As to many of the matters pointed out by appellees as deficiencies in the removal section of this amendment, it is sufficient to say that review by the courts necessarily requires that the courts see that any accused person is accorded the basic fundamentals of fair play and substantial justice. These elements seem to constitute the current test of due process.

The trial court, in reaching the conclusion that section 5 was not self-executing, stated that the legislature realized that article 15, dealing with impeachment, was not self-executing by enacting Ark. Stat. Ann. § 12-1201 et seq. While this legislation was adopted before the 1874 Constitution, it doubtless remained in effect. However, we find little merit in this argument because impeachment is a matter for action by the legislative branch. Certainly, it would be expected that the branch of government having responsibility for the proceeding should adopt procedural rules subject to constitutional or statutory limitations. The grant of power to remove an officer for specified causes without provision for ef-fectuation, carries with it, as incidents to the grant, all means necessary to effectuate the power. State v. Wallridge, 119 Mo. 383, 24 S. W. 457, 41 Am. St. Rep. 663 (1893); Ridgway v. City of Fort Worth, 243 S. W. 740 (Tex. Civ. App. 1922); Dullam v. Willson, 53 Mich. 392, 19 N. W. 112, 51 Am. Rep. 128 (1884).

One other argument of appellees that deserves consideration is the contention that there is uncertainty as to the time when a commissioner’s removal becomes effective so that a vacancy might exist throughout the process of review and appeal. We feel that the provision that review and appeal be without presumption in favor of any finding by the Governor or the trial court is inconsistent with the idea that the Governor’s removal would be effective during this process. It is only when the removal order becomes final that it is effective, and any order of removal by the Governor should be held in abeyance upon prompt institution of proceedings for review. Support for this construction is found in the fact that there is no provision for an interim appointment pending review and appeal.

The time for application for review is certainly limited by standards of reasonableness. The situation is somewhat analogous to situations where review of the actions of a tribunal on petition for certiorari or prohibition is denied because not sought promptly when the necessity therefor appears. See, Johnson v. West, 89 Ark. 604, 117 S. W. 770; Galloway v. LeCroy, 169 Ark. 838, 277 S. W. 35.

We do not intend to imply that legislation in this field is barred. The General Assembly is the repository of all the powers of sovereignty not reserved by the people or reposed in one of the branches. Hackler v. Baker, 233 Ark. 690, 346 S. W. 2d 677. There can be no doubt that the legislative branch may implement any constitutional provision by legislation which is not inconsistent therewith or repugnant thereto, so long as the legislation does not invade specific powers delegated to one of the other branches or exceed specific constitutional limitations. Myhand v. Erwin, 231 Ark. 444, 330 S. W. 2d 68.

When we consider all governing factors, we conclude that Section 5 of Amendment 35 is self-executing. The courts of other states having similar constitutional provisions conferring upon the Governor the power to remove officers have reached the same result. See, e. g., Dullam v. Willson, 53 Mich. 392, 19 N. W. 112, 51 Am. Ref). 128 (1884); State v. Young, 154 Neb. 588, 48 N. W. 2d 677 (1951). Since it has been conceded by all parties that the only question now before the court is whether this section is self-executing, the propriety of the procedure adopted by the Governor is not now before us. We have dealt only with those questions we deem necessary to consider in order to reach our conclusion that Section 5 of Amendment No. 35 is clearly self-executing.

The decree is reversed, and the injunction is dissolved.

       The Head of the Department of Zoology of the University of Arkansas is an associate, non-voting member.

       This is the test applied by this court in Pennsalt Chemical Corporation v. Crown Cork & Seal Company, Inc., 244 Ark. 638, 426 S. W. 2d 417 (1968).


author: J. Fred Jones, Justice.

text:
    John G. ASIMOS et al v. T. L. REYNOLDS & SONS, Inc.
    5-4505
    429 S. W. 2d 102
    Opinion delivered May 27, 1968
    [Rehearing denied July 15, 1968.]

      Curtis L. Ridgway Jr., for appellants.

      Wood, Chesnutt & Smith, for appellee.
   J. Fred Jones, Justice.

T. L. Reynolds & Sons, Inc., an excavation contractor, obtained judgment in tbe Garland County Circuit Court against Mr. and Mrs. John G-. Asimos for $19,817.40 as balance due on an excavation contract, and Mr. and Mrs. Asimos have appealed.

The appellants were the owners of the De Soto Hotel in Hot Springs, as well as Lots 13 and 14 in Block 127 on a steep mountainside across Canyon Street from the hotel. In order to construct a parking lot for the hotel, appellants entered into an agreement with the ap-pellee under which the appellee agreed to excavate and remove the dirt from Lots 13 and 14 for a contract price of $56,000. The pertinent part of the agreement giving rise to the litigation is as follows:

“Contractor agrees to excavate and remove dirt, etc., from the premises known as Lots 13 and 14 of Block 127 of the United States Hot Springs Reservation, as follows:
(A) All of Lots 13 and 14 with exception of the Northwesterly two feet of said Lots to a grade on the Southeasterly line of said Lots equal to that of Canyon Street which border said lots at said point and from said grade rising in a Northwesterly direction, so as to have the grade along the Northwesterly line of said Lots 5 feet above the Canyon Street grade.”

The agreement provided for payments to be made as the work progressed and the last paragraph provided as follows:

“The Parties hereto agree that the cost of removing any stuff or cave-in materials shall be borne by the Contractor during the period of excavation, but that the cost of removing any sluff or cave-in materials shall be borne by the Owner at all times other than during the period of excavation.”

Appellants subsequently requested that additional work be done in lowering the grade level of the floor of the excavation and this work was performed. Appellants paid a total of $33,000 on the contract and upon failure to pay anything further, appellee sued for $26,659 as the balance due on the contract. This amount included $1,159 for additional work on the side-agreement for change in the grade of the floor of the excavation. The appellants answered by general denial, except as to the execution of the contract, and appellants counterclaimed for damages in the amount of $45,000 for breach of the contract.

The ease was tried in the circuit court before the-judge sitting as a jury, and the judgment in favor of appellee for $19,817.40 was rendered on the findings of the trial court, as follows:

“1. The plaintiff, T. L. Reynolds & Sons, Inc. entered into a contract with the defendants, John G. Asimos and Jane A. Asimos to excavate certain portions of Lots 13 and 14 of Block 127 of the United States Hot Springs Reservation for a total consideration of the sum of $56,000.00; that of that sum $33,000.00 was paid by the defendants to the plaintiff.
2. That the plaintiff performed the contract to the extent possible; that the plaintiff was unable to excavate a ninety degree vertical line due to the nature of the rock formation, which necessitated slope-age to protect against sloughage and cave-in of the adjoining property; that plaintiff and defendants acquiesced in the demand of the National Park Service to refrain from excavation that would undercut National Park property or permit slides that would affect the surface of National Park property.
3. That the amount of slopage remaining on said lots contemplated to be excavated amounted to 2,-412 cubic yards; that the cost of excavating said cubic yards, based upon contract price, would have been $1.80 per cubic yard; that the defendants are entitled to a set-off in the sum of $4,341.60 for the materials not removed as contemplated in the contract.
4. That the defendants, by causing the lot to be immediately paved and using same for parking purposes and by making additional payments to the plaintiff after the plaintiff had ceased work and left the job, waived and abandoned any claim against the plaintiff for completion of the work.
5. That the undisputed evidence proves that the plaintiff excavated into certain areas of the lots deeper than was required under the contract in order to provide a proper surface for paving purposes ; that the work was done at the request of the defendant, John G. Asimos; and that the plaintiff is entitled to the sum of $1,159.00 for the extra work done.
6. That the defendants waived any claims for damages against the plaintiff and are estopped by their actions in causing a concrete slab to be poured and using the lot as a parking lot without first demanding that the plaintiff complete the contract; and further, the defendant, John G. Asimos admitted from the witness stand that he owed the plaintiff additional sums of money for the work.”

On appeal to this court, the appellants designate the points upon which they rely for reversal, as follows:

“1. The court improperly considered certain hearsay evidence during the course of the proceeding to arrive at one of its findings of fact.
2. The court permitted recovery based on the contract when the appellee was in obvious breach thereof.
3. The court applied an erroneous formula in arriving at its judgment.”

The evidence reveals that the hack side or end of the excavation was sixty or seventy feet deep where it was cnt into the mountain. The written agreement between the parties is silent as to whether the walls of the excavation were to be perpendicular from within two feet of the property boundary line on the side of the mountain to the floor of the excavation. Appellee based his contract price of $56,000 on the number of cubic yards to be excavated at $1.80 per yard and he estimated the number of yards to perpendicular walls, so this litigation stems from, and involves, the question of whether the walls of the excavation were to be straight up and down when the excavation was completed, or whether some deviation from perpendicular was permissible under the terms of the contract.

When appellee commenced the excavation, it soon learned, from the nature of the ground, that a perpendicular wall of an .excavation sixty to seventy feet deep, would, not support itself, so it sloped the wall from within two feet of the property line at the top of the excavation out to twelve to sixteen feet from perpendicular at the bottom of the excavation.

As to appellants’ first point, they argue that the trial court erroneously considered certain demands made by the Park Service in a letter to appellants, with copy to appellee, the letter having been received in evidence for the limited purpose of showing it had been received. Appellants argue that outside of the contents of this letter, there-is no evidence in the record that the National Park Service had made demands on the parties to refrain from making an excavation that would undercut the National Park property.

We do not agree with the appellants on this point. The demands of the National Park Service were not material to the issue in this litigation, and if the trial court erred in considering the letter beyond the limited purpose for which it was offered and received in evidence, we consider the error harmless under the circumstances of this case. There is ample evidence that the sixty to seventy foot wall of the excavation would have sloughed or caved off if cnt perpendicular in the type of soil involved in this operation, and that snch sloughing or caving would have invaded the Park Service property which Avas only two feet aAvay from the top edge of the Avail of the excavation. All parties recognized their duty as to protecting neighboring property and the letter from the Park Service warning the appellants and the appel-lee against invasion, could have added no duty not already imposed by laAv. As a matter of fact, T. L. Reynolds testified that he discussed the contents of the letter with appellants, that appellants agreed that the property line had to he protected against sloughing off, and that they discussed, without disagreement, that the only way to protect the property line against sloughing, was to slope the Avail from the top outward toward the base, as Avas done. Furthermore, Mr. Reynolds testified that appellants observed the Avork in progress every day and made no complaint about the way it was being done. Appellants denied that they discussed with appellee the necessity for sloping the walls, hut Mr. Asimos did testify: “I told him we were going to have to look after the government property but I didn’t tell Mr. Reynolds to go into the government or not to go in, it was up to him to take care of it.”

Appellants’ second point goes to the heart of the laAvsuit, but we are of the opinion that there is substantial evidence in the record to sustain the trial court.

The contract simply calls for appellee to excavate and remove dirt, etc. from “all of lots 13 and 14 with exception of the northwesterly two feet of said lots. ...” The contract then provides for the depth of the excavation by fixing the grade of the floor in relation to Canyon Street. The grade of the walls, in relation to perpendicular, could have been fixed as easily as the grade of the floor, had the parties not intended to leave some room for variation consistent with, safety, good judgment, and common sense, as the work progressed and the nature and composition of the subsoil structure demanded. Such intent is amply supported by the circumstantial evidence in this case. Even before appellants entered into the contract with appellee, and before any topsoil was removed and the structure and composition of the subsoil or strata was revealed, Mr. Faye, a former city engineer, at appellants’ request, figured and estimated the number of yards of dirt to be excavated and removed from the lots. Mr. Faye discussed the situation with the appellants, and testified as follows:

“Q. Did you ever have occasion to talk with Mr. Asimos about the slopeage, the type of rock, texture that was protecting the property lines along that line?
A; Yes.
Q. What was that discussion, what did that consist of?
A. John had — this lot has a certain what you call a horizontal area and he wanted to get as large a parking space as he could to utilize as much of his property as he could and he wanted it coming straight down and I advised him at the time through experience on other jobs around here, similar jobs, there was danger of sloughing. In other words, cut straight up and down it’s just not going to stay there, it’s got to come off; so, I advised him to put a slope on it but John took it from there.”

Mr. Faye furnished appellants with a written estimate, as follows:

“I have made a survey of Lots 13 and 14 in Block 127 of the Hot Springs Reservation, and have made calculations of the yardage to be excavated.
The calculations are based on cutting the lots to street grade at the front of the lots for the entire frontage on Canyon Street, and the bottom of the cut to rise five feet toward the rear of the lots. The calculations are also based on the vertical cuts having a slope of one horizontal to five vertical.
On this basis, I have calculated the excavation yardage to be 26,500 cubic yards.
(29,000) straight down.”

With this knowledge, advice, and recommendation, furnished by an expert civil engineer with broad experience in mountainside excavations in Hot Springs, appellants entered into the contract with appellee and although the horizontal elevation of the floor was specifically spelled out in the contract to accomplish drainage, the vertical position of the walls was not specifically designated and spelled out in the contract. There is no evidence in the record that the parties to the contract ever discussed with each other the interpretation or meaning of any of the terms of the contract either before or during the period of performance. The intention of the parties to a contract controls its interpretation, and in construing a contract, the court should place itself in the situation of the parties in order to arrive at their intention in making it. Arlington Hotel Co. v. Rector, 124 Ark. 90, 186 S. W. 622.

Even though the contract price of $56,000 appears to have been arrived at by multiplying the estimated number of yards of the dirt to be excavated, straight down from within two feet of the property line, by $1.80, the estimated charge for excavating one cubic yard, the overall evidence is convincing that the contract was written, and so considered, accepted and intended by the parties, that appellants were to have as.much parking space in the excavation as reasonably possible, and that appellee was to excavate as much space as reasonably possible within the designated area inside appellants’ property boundary lines.

The overall evidence is indicative that the appellants and the appellee made a common sense and practical approach to the interpretation and performance of the contract, the appellant desiring the walls to. be as near perpendicular as reasonably possible, and the ap-pellee desiring to do the excavation in such manner as to leave the walls as perpendicular as reasonably possible. The evidence is clear and convincing, that it was not reasonably possible to excavate to the depth required with the walls of the excavation being perpendicular, so we conclude that there is substantial evidence in the record that appellee was not required under the terms of the contract to excavate to perpendicular walls within two feet of appellants’ property lines.

The full performance of the contract by appellee, as intended and understood by the parties, is borne out by the evidence. Appellants agreed that property lines had to be protected. They observed the excavation in progress and made no objection to the manner in which appellee was performing the work (which was being done in keeping with the recommendations made to Mr. Asimos by his own engineer). Appellants started paving the floor of the excavation as soon as appellee removed its machinery. The appellants made payments on the contract after the machinery was removed and the paving completed, and Mr. Asimos admitted at the time of the trial that he still owed some amount to appellee. Considerable material sloughed off of the walls after ap-pellee ceased work and no request was made for its removal under the last paragraph of the contract. In fact the record reveals that no dissatisfaction was registered by appellants to the entire performance, until appellee demanded pay of the balance he contended was due on the contract price. We conclude that there is substantial evidence that the contract was fully performed by the appellee according to the terms of the contract, as understood and intended by the parties to the contract when the agreement was entered into by them.

In support of appellants’ third point, they advance a logical argument and we agree that the trial court may have applied an erroneous formula in arriving at its judgment. But if error was committed in this connection, appellants are the beneficiaries of the error and they are not the ones to complain.

The trial court found that appellee “performed the contract to the extent possible.” This being a suit on a contract in a court of law, we interpret the court’s finding to be that the appellee performed the contract to the extent possible, as contemplated and intended by the parties to it. Appellant is correct in that there is an inconsistency in allowing appellee’s recovery on a contract performed with a set off in damages to appellants for that portion of the contract that was not performed. There was no evidence submitted as to the number of yards actually excavated by the appellee. There was evidence as to the number of yards still remaining in the slope of walls making up the difference between the contract as performed by the appellee and a perpendicular Avail as appellant contends the contract called for. There Avas also evidence that the appellee arrived at his contract price on the estimated cost of removing the dirt at $1.80 per yard and that he arrived at the $56,000 figure, on the theory that ho would be able to excavate the area to perpendicular walls, even though the contract did not call for perpendicular walls and the parties intended that the walls be as near perpendicular as reasonably possible. Apparently, the trial court reasoned that since appellee’s contract price was based partially on dirt he was unable to excavate, that equity and good conscience would not permit him to recover for work he intended but was unable to perform, and proceeded to credit appellants’ account A\dth that portion of the contract price which was based on services appellee intended but was unable to perform. In other words, the trial court apparently considered that appellee had overcharged the appellants by overestimating the number of yards of dirt he could move at $1.80. The fallacy of this reasoning lies in the fact that appellee did not contract to do the excavating at $1.80 per yard, he contracted to do it for $56,000.

There is substantial evidence that the contract was performed as the parties intended. There is substantial evidence that appellee performed additional work at appellants’ request in lowering the original grade in the excavation floor. We agree with appellant, however, that the trial court applied an erroneous formula in arriving at its judgment, but the error was favorable to the appellants, and the appellee has not appealed.

The judgment of the trial court is affirmed.

Bybd, J., concurs.


text:
    J. T. KEMP et al v. Tommy SIMMONS et al
    5-4581
    428 S. W. 2d 59
    Opinion delivered May 27, 1968

      Charles F. Cole, for appellants and cross-appellees-

      Ivan Williamson, for appellees and cross-appellants.
   J. Fred Jones, Justice.

The city of Mountain View, Arkansas, extended its airport landing strip east across a street known as Kemp Road, and diverted traffic to and from the north end of Kemp Road over a new road constructed west from Kemp Road along the north side of the landing strip. J. T. Kemp, Lloyd Kemp, Don Kemp and Dean Kemp, who owned property on Kemp Road north of the airport, filed a petition in the Stone County Chancery Court against the Mayor and City-Council of Mountain View seeking a reinstatement of Kemp Road to its former condition and an injunction against doing anything in the future which would prevent or hinder the petitioners and the general public from having complete and unrestrained access and use of such roadway or street. The Mayor and Council demurred to the petition and the evidence. The chancellor overruled the demurrers and denied the petition. The Kemps have appealed and they rely upon the following points for reversal:

“The Mayor and City Council of Mt. View were without authority to close a portion of the road in question and to erect the barricades thereon.
The chancery court erred in dismissing appellants petition, and should have granted the relief sought.
Appellants are entitled to the relief requested in their petition.”

The Mayor and City Council have cross appealed and they rely on the following points:

“The trial court erred in over-ruling city’s demurrer to Kemp’s petition.
The trial court erred in over-ruling city’s demurrer to Kemp’s evidence.”

The facts in this case are not seriously in dispute. The appellants are relatives and for many years have owned their separate farm lands northeast and adjacent to the city of Mountain View, which is a city of the second class. A public road which has become known as “Eemp Road,” has for many years extended north from state Highway 14 through the Kemp community and has been used by the appellants and others in gaining access to black-topped state Highway 14, which runs east to Batesville and west to Mountain View proper. Kemp Road was originally east of the city of Mountain View, but the city has extended its boundaries east along the north side of Highway 14 by annexation of East Subdivision to Mountain View, and the south end of Kemp Road is now inside the corporate boundaries of Mountain View and has become a street within the city limits of East Subdivision. Another road, knoiyn as “Section Line Road,” also extends north from Highway 14, and leaves Highway 14 about one-half mile west of Kemp Road and runs more or less parallel with Kemp Road. The city owns and maintains an airport, or landing strip, north of, and adjacent to, East Subdivision, with the landing strip being two hundred feet wide and extending west from Kemp Road for a distance of approximately one-half mile and almost to Section Line Road. The city of Mountain View, in anticipation of outside financial assistance for the purpose of improving its airport and paving the airport runway, and in order to accommodate larger airplanes, extended the airport runway, or landing strip, some distance east, across Kemp Road. The city first constructed a new road, or street, running from Kemp Road west /to Section Line Road along the north side of the landing strip, then by resolution adopted on July 25, 1967, a two hundred foot section of Kemp Road was closed where it Ayas crossed by the extension of the airport runway. That portion of Kemp Road south of the runway was left open from the runway to Highway 14, and that portion of Kemp Road north of the runway was left open with access to state Highway 14 via the new road along the north side of the landing strip then south on Section Line Road.

It became necessary for appellants, in traveling ffom their homes to Highway 14, to travel south to the landing strip, then west approximately one-half mile toward Mountain View to Section Line Road, then south on Section Line Road to Highway 14. For the purpose of travling west on Highway 14 toward Mountain View proper, appellants were required to travel no farther than before the change was made. But for the purpose of traveling east on Highway 14 toward Batesville, it was necessary to make two additional right angle turns and travel about one mile farther than before the change was made. Appellant Lloyd Kemp lives on Kemp Road about one-fourth mile north of Highway 14 and since the change in the access route he is required to travel about three-fourth mile instead of one-fourth mile in reaching the black-topped Highway 14.

By orders of the Mayor of Mountain View, under authority of a resolution adopted by the City Council in July 1967, the two hundred foot section of Kemp Road was torn up and barricades were erected about September 29, 1967. The petition for injunction was filed on October 5, 1967. A general demurrer, alleging “that said complaint does not state facts sufficient to constitute cause of action,” was filed to the petition on October 14, 1967. On October 16, 1967, the City Council, in special session, passed an ordinance which in effect, affirmed the resolution adopted in July. The case was tried and the decree entered on October 18, 1967.

The appellants, on direct appeal, do not argue procedural invalidity of the legislative process by which a part of Kemp Road was closed except in reply to ap-pellees’ argument that the procedure followed by the Mayor and City Council was regular. The thrust of appellants’ contention is that the state of Arkansas has never delegated to cities of the second class, authority to close a street under such facts as appear in this case. The appellees contend that cities of the second class do have such authority under the facts of this case and in support of their demurrers, appellees contend that the appellants did not allege, or prove, such special, or peculiar, damages as is necessary for the maintenance of an action for injunctive relief against closing a portion of Kemp Road in this case.

Arkansas Statutes Annotated § 19-3825 ,(Repl. 1956) authorizes vacation and abandonment of a street dedicated by the owner in a recorded plat where the street has not been used for five years, and this section clearly does not apply to the facts in this case at bar. Consequently, if the city of Mountain View had the authority to vacate, or close, any portion of Kemp Road, under the facts in this case, such authority must be found in Ark. Stat. Ann. § 19-2305 (Repl. 1956), the pertinent part of which is as follows:

“In order to better provide for the public welfare, safety, comfort and convenience of their inhabitants, the following enlarged and additional powers are conferred upon cities of the second class, viz:
#jj. at.
Second. To alter or change the width or extension of streets, sidewalks, alleys, avenues, parks, wharves and other public grounds, and to vacate or lease out such portions thereof as may not for the time being be required for corporation purposes, and where lands have been or may be acquired or donated to such city for any object or purpose which has become impossible or impracticable, the same may be used or devoted for other proper public or corporate purposes or sold by order of the city council, and the proceeds applied therefor.” (Emphasis supplied).

Appellant J. T. Kemp testified on direct examination: That he had lived on Kemp Road northeast of Mountain View for twenty-three years and is in the broiler business, that his principal means of ingress and egress for twenty-three years has been over Kemp Road in going to Highway 14 and to Mountain View, that he lives north of the airstrip, that trucks haul feed over Kemp Road to his place, that other people live on the road and everyone is welcome to use it, that Kemp Road has been closed or a barricade has been erected across it, that the city closed Kemp Road and built appellant, and others, a road along the north side of the airstrip. This appellant then was asked the following question and gave the following answer:

“Q. ... How does it affect your getting in and out from your place and these trucks and feed trucks and chicken trucks getting in and out from your place 1
A. Well, we have two short turns in it, and we use big trailers; and it’s hard to get our chickens out over it, you know; in bad times, they can hardly make the turns.”

On cross-examination this witness testified that from his doorstep to Highway 14 is five tenths of a mile, and that his house is the farthest one north on Kemp Road, that since the new access road has been built all the work has been done on it and his other road has been permitted to go down, that Don Kemp lives south of Highway 14 but has two broiler houses north of the airport, that besides his own two broiler honses and those of his son, Don, there are three more broiler honses in the area, one belonging to his brother Lloyd and one to John Tingle, that John Tingle lives right on the side of the new access road built along the north side of the airstrip and about midway of it, that his brother, Lloyd, lives north of the airport, that Kemp Koad continues north to Herpel Road and is used by himself, his son, and Howard Wade, who raises cattle and hogs, that besides himself and Howard, J. M. Green, who is with the forestry service, also uses Kemp Road out to Harpel Road and also squirrel and deer hunters use it, that his son, Dean, who is employed out of state, has a house beside his own and that his mother lives between his house and his brother, Lloyd, that there are actually four houses on Kemp Road north of the airport, that in going to Mountain View he is required to travel no farther over the new road along the north side of the airport, than he would in traveling south on Kemp Road, but in going to Batesville over Highway 14, it is more than one-half to three fourths of a mile farther since it is only one-half mile to Highway 14 over Kemp Road and one and one-tenth miles via the new airstrip road and an additional one-half mile east to where Kemp Road intersects with Highway 14.

Appellant, Lloyd Kemp, testified on direct examination: That he had lived north of the airport on Kemp Road for twenty-two years and that Kemp Road has been in its present location for as long as he can remember and has been used by the general public all this time. This witness was asked the following question and made the following answer:

“Q. Well, this relocation or blocking of the street there, will it damage you in any way, or does it damage you in any way?
A. It sure does.
Q. Just tell the Court in what respect it does.
A. Well, it just puts me out of the way a lot. I am a quarter of a mile from where I live to the blacktop, and I am about three-quarters the other way. We had a good road there; I thought it was good. Now we have to run over gravel that is probably 6 inches deep, creek gravel, and along the airport — up on the airport.”

On cross-examination, this witness testified that Kemp .Road still runs in front of his place and that he has lost no ingress or egress because of cutting off the road, that the difference in time it takes him to get onto the blacktop of Highway 14 would be the difference in time it would take to travel one-fourth mile, as compared with a mile and one-fourth; that there is one person who lives on Kemp Road between the airport and Highway 14.

Appellant Don Kemp testified on direct examination: That he owns property north of the airstrip but lives south of Highway 14, that he had been acquainted with Kemp Road for twenty-two or twenty-three years, and then the following question was asked him and received the following answer:

“Q. Now, how has the closing of this Kemp Road affected you and your property up there?
A. Well, like Lloyd said, we are traveling a road now that has got 6 inches of gravel on it.
Q. Has it affected the value of the property any?
A. Yes, it has.
Q. In what respect?
A. Well, it put us about a mile out of the way from the real highway.”

On cross-examination this witness testified: That in going from his home south of Highway 14 to his property north of the airport, he travels no farther now than he would before Kemp Road was closed, hut that the road is not as good since it is necessary to travel farther on gravel.

Howard Wade testified on direct examination: That his brother sold the land to the Kemps and that he is thoroughly familiar with Kemp Road, that the road has been in its present location for 50 years and has been used by the general public during that time.

On cross-examination this witness testified: That he had used the north end of Kemp Road from Herpel Road in hunting cattle and such as that; that a portion of Kemp Road in that area runs through his land and that he does not believe that the county would attempt to work the road without saying something to him about it.

The testimony offered by appellees had to do with the need for the airport runway extension, the purchase of property for that purpose, and the adoption of the resolution and passage of the ordinance in connection with closing the two hundred foot strip of Kemp Road, and that testimony is not important to the issues on this appeal.

Appellants rely on the decisions of this court in Texarkana v. Leach, 66 Ark. 40, 48 S. W. 807, and Brooksher v. Jones, 238 Ark. 1005, 386 S. W. 2d 253. The facts in both of these cases readily distinguish them from the case at bar. In the Leach case the steeet was being abandoned across a series of railroad tracks in favor of a crossing to be provided by the railroad company across fewer tracks. Apparently the proposed abandonment left appellant’s, and neighboring property, on the dead end of the street against the railroad. In any event, it clearly appeared that appellant’s property would have been reduced by at least twenty-five to fifty per cent in value by the abandonment. It is true that this court held in the Leach case that the city did not have the authority to close the street in these words:

“Texarkana being a city of the second class, the ordinance of its city council is void. The municipal-authorities of a city or town cannot vacate a street, or any part of it without the authority of the legislature. This power does not inhere in a municipality.
* * * The statutes of this state authorize municipal corporations to lay off, open, widen, straighten, establish and improve streets, and keep them in. repair, but they do not expressly, impliedly, or incidentally confer upon cities of the second class or incorporated towns authority to vacate streets.”

As pointed out by the appellants, Ark. Stat. Ann. § 19-2305 was enacted by the legislature about the time of the decision in the Leach case. As a matter of fact, Act No. 24 of 1897 (Ark. Stat. Ann. § 19-2305) was approved on June 5, 1897, and the Leach case was decided December 17, 1898. The court, however, did not mention Act No. 24 of 1897 in the decision, but as pointed out in appellants’ brief, this act does “grant to a city of the second class the authority to: ‘ alter or change the width or extension of streets, sidewalks, * * * and to vacate or lease out such portions thereof as may not for the time being he required for corporate purposes” (Emphasis on “vacate” supplied).

In the Brooksher case, supra, Birnie Avenue in Fort Smith had been dedicated to the public as a city street since 1906 and was being used daily by more than two hundred automobiles, when the city of Fort Smith attempted to abandon a portion of it to Safeway Stores, Incorporated. This court, in effect, simply held that the proof in the Brooksher case failed to show that the portion of Birnie Avenue sought to be vacated was not required for corporate purposes.

The Brooksher decision did not reject the decision in the case of Risser v. City of Little Rock, 225 Ark. 318. 281 S. W. 2d 949, except to state that the points decided in the Bisser case were not decisive of the points raised in the Broohsher case.

Appellees rely heavily on our decision in the Bisser case, supra. In that case the facts were very similar to the facts here. In order to expand its airport, the city of Little Rock made two efforts to close portions of East Tenth and East 26th Streets leading from the city of Little Rock to the very populous Fourche Dam Pike area. The first ordinance was enacted in accordance with Ark. Stat. Ann. § 19-3825 (Repl. 1956) authorizing tiie closing of streets where they have not been used for five years. This ordinance was declared void by the trial court and no appeal was perfected. The city council then enacted an ordinance abandoning a portion of these streets on authority of Ark. Stat. Ann. § 19-2304 (RepL 1956) (which relates to cities of the first class and is the same as Ark. Stat. Ann. § 19-2305, supra, relating to cities of the second class). An injunction was sought to enjoin the city from abandoning the old routes in favor of the new ones. The contention among others being “the city had no control or jurisdiction to close the road in question.” In affirming the trial court in denying the injunction, this court touched lightly on the authority of the city, but did consider at some length whether or not the appellant petitioners had suffered special and peculiar damages. As to the authority of the city, this court said: “Cities have the authority to control, supervise and regulate all streets within corporate limits, Ark. Stat. Ann. § 19-2313, § 19-2304.” As to special damages in the Bisser case, this court said:

“Next we come to the question of whether the appellants suffered special and peculiar damages. None of the plaintiffs own property abutting the portions of the streets being closed, but even if it is conceded that appellants have been damaged by the relocation of the roads, they have suffered no peculiar or special damages which could give rise to a cause of action. Travelers on 10th Street, as relocated, must turn two corners and travel a little farther, which requires less than a minute in additional time. This slight inconvenience, however, is not peculiar to appellants alone. This street is an outlet from the city to one of the most thickly populated sections, of the county. Every person that travels the street suffers the same inconvenience as the appellants.'”

The Risser decision then quotes with approval from Little Rock and Hot Springs Western Railroad v. Newman, 73 Ark. 1, 83 S. W. 653, where this court said:

‘ “The rule of law governing cases of this kind is that no private action on account of an act obstructing a public. and common right will lie for damages of the same kind as those sustained by the general public, even. though the inconvenience and injury to the plaintiff be greater in degree than to other members of the public; but an action will lie for peculiar or special damage of a kind different from that suffered by the general public, even though such damage be small, or though it be not confined to plaintiff, but be suffered by many others.’ ”

Now in the case at bar, none of the appellants were abutting land owners to the closed portion of K.emp Road. Besides deer and squirrel hunters, only five people were shown to have used Kemp Road, and only three of them regularly used that portion that had been closed, as compared with two hundred who daily used Birnie Avenue in the BrooJcsher ease and the inhabitants of the most thickly populated area in Pulaski County in the Risser case. The appellants here, as in the Risser case, have only shown inconvenience in traveling a little farther with two additional turns in the road and have shown no special and peculiar damages not common to anyone else who might have occasion to travel Kemp Road.

Appellant questions the validity of the ordinance closing a part of Kemp Koad because the ordinance was not published pursuant to law (Ark. Stat. Ann. § 19-2404 [Répl. 1956]). The ordinance was passed with an emergency clause on October 16, 1967, two days prior to the trial; it was adopted by unanimous vote on suspension of the rules, and the emergency clause was voted on separately. Therefore, the ordinance was effective upon adoption under the provisions of Amendment No. 7 of the state constitution, and it was not likely that it could have been published before the trial. We do not imply that the adoption of an emergency clause dispenses with the necessity for publication, but the effectiveness of an emergency ordinance not providing for fine, penalty, or forfeiture should.not.be. suspended until publication, at least if it is published within a reasonable time.'

The question of when a street, or any part of a street, is no longer required for corporation purposes is a question of fact to be determined by the city council in the first instance, and then by the chancellor when the validity of the council’s action is attacked in chancery court. Chancery cases are tried de novo in this court and the chancellor’s decision is sustained unless it is against the preponderance of the evidence.

We conclude, therefore, that the two hundred foot section of Kemp Road, closed by the city of Mountain View, is not, for the time being, required for corporation purposes, and that under authority of Ark. Stat. Ann. § 19-2305, and § 19-2313, the city had authority to abandon and close that section of Kemp Road and to lay off, open and maintain, the new substitute road along the north side of the airport strip.

In the Brooksher case, supra, the opinion was concluded as follows:

“We make it plain that we are not holding a city has no right under any factual situation to vacate a street under % 19-2304, bnt we are merely bolding that the Commission had no such right in this instance under the undisputed facts as shown by the record.”

We also make it plain, in the case at bar, that we are not holding that a city does have a right under just any factual situation, to vacate a street under § 19-2305, but we are merely holding that the City Council had such right in this instance under the facts as shown by the record in this case. In the absence of future legislation on the subject, each case arising in the future must continue to rest on its own peculiar facts. The decree of the chancellor is affirmed.

Affirmed.


author: Conley Byrd, Justice.

text:
    Vernon NELSON v. David Keith UNDERWOOD et al
    5-4542
    Opinion delivered May 27, 1968
    [Rehearing denied July 15, 1968.]

      Smith, Williams, Friday & Bowen, for appellant.

      Gordon, Gordon & Eddy, for appellees.
   Conley Byrd, Justice.

Appellant Vernon Nelson was involved in a collision with appellees David Keith Underwood and Betty Lee Underwood, his wife, at the intersection of Frog Levee Road and Highway 95 near Morrilton, Arkansas. Nelson was making a left turn with his pick-up truck when he was struck in the left side by the automobile driven and occupied by the Under-woods. Nelson testified that he was giving a proper left-hand turn signal. The Underwoods deny that any signal was given. From a jury verdict awarding a substantial judgment in favor of each of the Underwoods, Nelson appeals, claiming error in the selection and impaneling of the jury; error in the trial court’s failure to' direct a verdict; that the verdict for Betty Lee Underwood was excessive; and that the trial court erred in instructing the jury upon Ark. Stat. Ann. § 75-609 (b) (Repl. 1957).

The instruction given upon the statute by the trial court, being incorporated in AMI 601, is in part as follows :

“There were in force in the State of Arkansas at the time of the occurrence seven (7) statutes which provided:
“75-609: The following rules shall govern the overtaking and passing of vehicles proceeding in the same direction, subject to those limitations, exceptions, and special rules hereinafter stated:
“(b) Except when overtaking and passing on the right is permitted, the driver of an overtaken vehicle shall give way to the right in favor of the overtaking vehicle on audible signal and shall not increase the speed of his vehicle until completely passed by the overtaking vehicle.
“A violation of one or more of these seven (7) statutes although not necessarily negligence, is evidence of negligence to be considered by you along with all of the other facts and circumstances in this case.”

We hold that it was error to instruct the jury on the statute, under the facts of this case, without informing them that the statute did not apply if Nelson was making a lawful left turn — i. e., if he had given the proper signals for the left turn. As given, the instruction leaves with the jury the impression that once the overtaking vehicle has given an audible signal, the overtaken vehicle must yield the right of way even though he is properly signaling for a left turn exit from the highway.

In view of this reversal we do not reach and have made no determination on the excessiveness of the verdict. We find no merit in the other alleged errors.

Reversed.

Habéis, C. J., and Jokes, J., would affirm the judgment.

       In the compiled statutes the phrase reads, “except when overtaking and passing on the right as permitted.” The original act says, “is permitted.”