text:
    MODEL LAUNDRY & DRY CLEANING and SENTRY INSURANCE COMPANY v. Gary D. SIMMONS
    CA 79-202
    596 S.W. 2d 337
    Court of Appeals of Arkansas
    Opinion delivered March 5, 1980
    Released for publication March 26, 1980

      Jones & Segers, for appellants.

      Kendall & Schrantz, for appellee.
   David Newbern, Judge.

In this workers’ compensation appeal we are asked to decide the following questions: (1) whether the “maintenance expenses” part of the rehabilitation benefits provided by Ark. Stat. Ann. § 81-1310(f) (Supp. 1979), may be based on income reduction which occurs during a retraining period; (2) whether the statutory penalty for late payments provided by Ark. Stat. Ann. § 81-1319 (f), (Repl. 1976), extends to late payment of medical bills and attorney’s fees or is limited to compensation installments which should have been paid to the claimant; and (3) whether there was substantial evidence to support the commission’s finding (a) that certain medical bills were controverted by the appellants and (b) that the appellee was permanently disabled to the extent of 15% to the body as a whole. We will discuss these points separately after setting out the facts.

The appellee suffered an undisputedly compensable injury while working for the appellant Model Laundry in May, 1975. For undisclosed reasons, his initial workers’ compensation claim which was filed April 15, 1976, stated the date of injury, erroneously, as January 19, 1976. Appellant Sentry Insurance Co. controverted permanent partial disability in excess of 10%. Temporary total disability payments were made in June, 1976, covering a period beginning January 19, 1976. Presumably the payments continued until September 23, 1976, the date of the end of the temporary total disability determined by the administrative law judge. Other findings in the September 19, 1977, opinion of the administrative law judge included one to the effect that the appellants controverted certain medical bills in the amount of $1714.36. The administrative law judge concluded the appellants should pay those bills and the maximum attorney’s fee with respect to those bills. He also concluded the appellee was permanently disabled to the extent of 33 xh% to the body as a whole, and awarded maximum attorney’s fees on the award to the extent it exceeded 10%.

A major issue addressed in the September 19, 1977, opinion was whether the medical bills were controverted. Although he recognized there had been some confusion at the outset caused by notice to the wrong carrier and the inaccurate statement of the date of injury by the appellee, the judge found most of the medical expenses in question had been incurred in March, 1976, and no effort to pay them had been made as late as May, 1977, although the evidence indicated the bill had been sent to Sentry on September 13, 1976.

The administrative law judge concluded the appellee was a suitable candidate for a rehabilitation program, but that no plan for rehabilitation had been submitted, and thus no award could be made in that respect.

On appeal to the full commission, the finding of controversion of the medical bills was affirmed. The commission concluded that it could make no final determination as to permanent disability, however, as the administrative law judge had reserved the question of rehabilitation. The commission found, however, no dispute as to anatomical disability of at least 10%, and thus ordered the appellants to make payments based on that percentage. The case was remanded to the administrative law judge for a determination with respect to rehabilitation.

The appellee submitted to the administrative law judge a rehabilitation plan which consisted of working in a wood crafts shop, where he had already begun work, making “novelty items” with the prospect of becoming the owner of the shop after a training program to last from January 1, 1978, until June 1, 1978. Based on a finding that the appellee’s income would be reduced from that which he was earning while working for Model Laundry, the administrative law judge awarded rehabilitation benefits of $2100. In the same opinion, dated July 20, 1978, the administrative law judge ordered the appellants to pay a 20% penalty plus interest on the still unpaid medical bills and the attorney’s fee which had been added with respect to those bills because they were controverted. This, was done over the objection of the appellants that the award had not yet become final. The administrative law judge concluded there was no reason not to have paid the medical bills and related attorney’s fee, as the case had been remanded to him solely to deal with the rehabilitation matter.

On appeal to the full commission, the penalty awarded was affirmed. The commission also ordered payment of $1695.75 representing maintenance benefits pursuant to Section 10(f) of the act for 25 Vi weeks at the rate of $66.50 per week.” This part of the award apparently replaced the $2100 the administrative law judge had awarded as rehabilitation benefits. The commission ordered payment of benefits for permanent disability to the extent of 15% to the body as a whole less payments already made on the previous 10% determination plus attorney’s fees on the increment. This amounted to a modification of the initial 33 V3% permanent disability finding.

I. Rehabilitation Benefits

Ark. Stat. Ann. § 81-1310(f) (Supp. 1979), says, in part:

In addition to benefits otherwise provided for by this Act, an employee who is entitled to receive compensation benefits for permanent disability shall be paid reasonable expenses of travel and maintenance and other necessary costs of a program of vocational rehabilitation, if the Commission finds that such program is reasonable in relation to the disabilities sustained by such employee ..

The commission found fault with the administrative law judge’s determination of rehabilitation benefits because he calculated them on the basis of the difference between the income the appellee received before his injury and his income during the proposed training program. But the commission’s own calculation was based on the same differential, adding to it the notion that rehabilitation maintenance is equivalent to a special or additional period of “temporary partial disability.” The commission concluded the appellee was entitled to six months (25 Vi weeks) of payments at 66 % of his average weekly wage as provided in Ark. Stat. Ann. § 81-1313 (b) (Repl. 1976).

We find no authority for this kind of calculation. The commission seems to have done the same thing for which it criticized the administrative law judge, i.e., fixing maintenance benefits by referring to lost wages. The only thing added by the commission was its reference to § 81-1313 (b) which provides for compensation for temporary partial disability. We find no connection whatever between that section and the one providing for rehabilitation benefits. While the former contemplates reduced income, the latter deals with costs of rehabilitation. They are not the same.

While we have no cases to which we can refer, the tenor of § 81-1310(f) contemplates rehabilitation at an institution or place away from the claimant’s home, thus necessitating “maintenance.” See, 2 Larson, Workmen’s Compensation Law, § 61.20(1976).In this case the appellee had moved to the training site where he planned to remain. We hold loss of income and temporary partial disability are irrevelant to rehabilitation maintenance benefits, thus there was not substantial evidence to support the commission’s award of $1695.75 for such benefits.

II. Penalties

The appellants contend the penalty provision of the Worker’s Compensation Act does not provide for imposition of penalties on delinquent payment of medical bills and attorney’s fees. The two basic reasons stated are, first, the Act refers to penalties only with respect to failure to pay “installments” on time. Ark. Stat. Ann. § 81-1319(f) (Repl. 1976). Our Act does not provide for the payment of medical bills and attorney’s fees in installments. See, Ark. Stat. Ann. §§ 81-1311 and 1332 (Supp. 1979). Secondly, our Act does not deal with reimbursement of the claimant for medical and legal expenses, thus imposition of the penalty would raise a question to whom it should be paid.

Neither this court nor the Arkansas Supreme Court has dealt with this problem as far as we know. It has been considered only rarely in other jurisdictions. In California there were a number of appeals courts decisions dealing with the question, some of them conflicting. See, e.g., Ramsey v. Workmen’s Comp. App. Bd., 18 Cal. App. 3d 155, 95 Cal. Rptr. 558 (1971); Vogh v. Workmen’s Comp. App. Bd., 264 Cal. App. 2d 724, 70 Cal. Rptr. 722 (1968). The matter was settled by the California Supreme Court in Adams v. Workers’ Comp. App. Bd., 18 Cal. 3d 226, 133 Cal. Rptr. 517, 555 P. 2d 303 (1976), which held the penalties provided by the California Code apply to medical and legal obligations. The case makes it clear, however, that the California law contemplates reimbursement of the claimant rather than direct payment of these expenses. In addition, the California statute which is comparable to our § 81-1319(f) makes no mention of installments but clearly says it applies by any payments to be made pursuant to the award. Cal. Lab. Code § 5814 (1976).

Louisiana courts of appeals have held their penalty statute, La. Rev. Stat. Ann. § 23, 1201.2 (1964), “obvioúsly” applies to the medical payments parts of an award as it says it applies to “any claim due” under the law. Dupre v. Sterling Plate Glass & Paint Co., Inc., 344 So. 2d 1060 (La. App. 1977); Scott v. Hartford Accident & Indemnity Co., 302 So. 2d 641 (La. App. 1974). Again no mention of “installments” appears in the statute, and it is clear from the statute and the cases that the money is to be paid as reimbursement to the employee rather than directly.

There are indications that Minnesota, Rogers v. Cedar Van Lines, 281 N.W. 2d 669 (Minn. 1979), and Oregon, Newman v. Murphy Pacific Corp., 20 Ore. App. 17, 530 P. 2d 535 (1974), might permit penalties to apply to other than pure wage loss payments, but the referees in the cited cases are too sketchy to serve as authority.

As no other jurisdiction has decided this question interpreting a statute like ours or in a system where direct payments to doctors and lawyers rather than reimbursement to claimants is contemplated, we are left with a question of raw statutory interpretation. The California and Louisiana experiences help some, as at least we know the question was resolved in those states as a matter of literal statutory language, and they, as we, apparently were unable to discover any general authority or other application of workers’ compensation philosophy to the problem. As we see it, we should be and are relegated to this kind of interpretation of the letter of the law, as the usual presumptions such as strict construction of penalty statutes and liberal construction of social legislation seem to cancel one another. We have no need to indulge in those canons of interpretation, fortunately,as we, by looking to the statutory language, can see the General Assembly would not have made the penalty applicable only to installments had it intended it to apply to the other payments as well. Looking to the context of our statute, as we should, Garrett v. Cline, 257 Ark. 829, 520 S.W. 2d 281 (1975); Arkansas State Highway Commission v. Mabry, 229 Ark. 261, 315 S.W. 2d 900 (1958), as well as to its literal meaning, we would have to speculate on legislative intent to say the penalty applies to the medical and legal payments provisions.

We are aided somewhat in this conclusion by Brooks v. Ark. Best Freight, 247 Ark. 61, 444 S.W. 2d 246 (1969), where the Arkansas Supreme Court held that a lump sum payment of “compensation” pursuant to Ark. Stat. Ann. § 81-1319(k) (Supp. 1979), did not preclude the claimant from obtaining further medical payments from his émployer as, at least in that case, the lump sum “compensation” did not include medical payments. Similarly, we hold that the reference in § 81-1319 (f) to “installment, payable under the terms of the award” does not include medical and legal expenses.

III. Sufficiency of Evidence

A. Controversion

As we hold the penalty does not apply to medical payments and to the attorney’s fee added to them, we need not address the appellants’ point that the evidence does not support a finding they were controverted for the purpose of determining whether the penalty applies. Although the appellants have not raised the question whether the attorney’s fee should have been added to the medical payment found to be delinquent, that question arises naturally, as they could not have been added absent a finding of controversion, and we would feel this opinion was incomplete without some discussion of the matter. Ark. Stat. Ann. § 81-1332 (Supp. 1979).

The appellants argue they have not controverted the medical bills despite the fact they were first approved by the full commission February 2, 1978, and had not been paid as of July 20, 1978. The appellants’ contention is that, as the commission’s order of February 2, 1978, remanded the case to the administrative law judge, its order was not final and not appealable at that time, and until such time as the order became final and appealable, the appellants were not required to pay.

The case was remanded to the administrative law judge solely for the purpose of determining the rehabilitation benefits question. The order was final with respect to the medical claim, and it should have been paid promptly. Luker v. Reynolds Metals Co., 244 Ark. 1088, 428 S.W. 2d 45 (1968). The finding they were controverted is substantiated by this failure to pay. Aluminium Co. of America v. Henning, 260 Ark. 699, 543 S.W. 2d 480 (1976); Pickens-Bond Construction Co. v. Case, 266 Ark. 323 (1979).

B. 15% Permanent Disability

As contended by the appellants, the administrative law judge concluded in the opinion rendered July 20, 1978, after the case had beem remanded to him that the permanent disability to the body as a whole was 10%. The full commission raised the figure to 15%. The issue before us is whether there is substantial evidence to support the commission’s determination. In its opinion pursuant to which the 10% found by the administrative law judge was raised to 15%, the commission stated:

Finally, even though the evidence of record indicates and the administrative law judge found that following completion of his six month program of rehabilitation here in question, the claimant’s earning capacity is likely to substantially exceed his pre-injury earnings, we are of the opinion that because of the serious nature of the claimant’s injury and the resulting permanent physical disability, that his future earning capacity is reduced somewhat and he is entitled to an increased permanent partial award of fifteen percent to the body as a whole, which is five percent permanent partial disability above our preliminary award of ten percent permanent partial disability to the body as a whole. Thus, the Administrative Law Judge’s permanent partial disability award is modified accordingly.

It does not trouble us that this employee may earn more in his present job than he did before his injury. His fortunes could change at any time, and we must concern ourselves only with the extent to which his body has become disabled and his general prospects in the labor market have been affected. Although it is not particularly relevant at this point, the commission could have said it was modifying the administrative law judge’s original finding of 33 xh% disability.

The commission had before it a history of an employee with a serious back injury who, before he hit upon the woodworking scheme, had been unable to secure any kind of lasting job, and who still cannot work long periods without abnormal tiring and whose anatomical functions are admittedly 10% less than normal. This evidence came from the claimant and his father. The owner of an employment agency gave his opinion with respect to the employability of a person like the appellee.

We hold the evidence was sufficient to sustain the finding of 15% disability to the body as a whole.

SUMMARY

1. The award of rehabilitation benefits of $1695.75 plus attorney’s fees on that amount is reversed.

2. The award of a 20% penalty on medical and legal bills is reversed.

3. The award of $655.74, plus interest but without penalty, to the appellee’s attorney, based on the controverted medical, bills, is affirmed.

4. The award of 15% permanent partial disability plus attorney’s fee on the controverted 5% is affirmed.

5. The case is remanded to the commission for final disposition in accordance with this opinion.

Penix, Jr., not participating.

Howard, J., dissents.

George Howard, Jr., Judge, dissenting.

I.

REHABILITATION BENEFITS

The majority condemns the Commission’s award of $1,-695.75 (25 Vi weeks of benefits) to the appellee as “maintenance benefits during his program of rehabilitation.” The Commission, in accordance with the statute, found claimant’s plan of rehabilitation reasonable in relation to his disabilities. The majority, in rejecting the Commission’s holding, stated:

“We find no authority for this kind of calculation .. . We find no connection whatever between that section [Section 81-1313(b) providing for compensation for temporary partial disability] and the one providing for rehabilitation benefits. While the former contemplates reduced income, the latter deals with costs of rehabilitation. They are not the same.
“We hold the loss of income and temporary partial disability are irrelevant to rehabilitation maintenance benefits, thus, there was no substantial evidence to support the commission’s award of $1,695.75 for such benefits.”

Until fairly recently, Workers’ Compensation Laws were concerned essentially with the prevention of industrial accidents, cure of injuries sustained by employees in the course of their employment and the payment of benefits to an injured employee in order to shield him and his family from destitution. Emphasis is now being placed on rehabilitation of employees who have sustained permanent disability in industrial accidents. Rehabilitation is essentially financial assistance, separate and apart from the routine disability benefits, to aid disabled employees in reducing limitations resulting from their disability and restoring them to the “fullest physical, mental, social, vocational and economic usefulness of which the individual is capable.” Rehabilitation Within The Workmen’s Compensation Framework, 19 Rutgers Law Review 401 (1965).

Arkansas’s rehabilitation law, Ark. Stat. Ann. § 81-1310(f) is, perhaps, one of the most objective pieces of legislation designed to rehabilitate disabled employees. See: Provisions for Rehabilitation of Disabled Workers, 10 Am. Jur., Trials § 23, page 620. Section 1310(f) provides:

“An employee who is entitled to receive compensation benefits for permanent disability shall be paid, in addition to benefits otherwise provided for under this act, reasonable expenses of travel, maintenance and other necessary costs of a program of vocational rehabilitation for a period not to exceed sixty (60) weeks, if the commission finds that such program is reasonable in relation to the disabilities sustained by such employee.”
(Emphasis supplied.)

It is clear from the plain meaning of this provision that the Commission is required, when it finds that a program of rehabilitation is reasonable in relation to the disabilities sustained by a claimant, to pay additional benefits to cover “reasonable expenses of travel, maintenance and other necessary costs” for a period not to exceed sixty weeks.

The Commission in determining the maintenance award for the claimant, which has been utterly and completely rejected by the majority, referred to, and consequently relief in part, on its recent case of Gray v. Armour, WCC File No. C611754. The Commission said:

“. . . [T]hat maintenance, as referred to in Section 10(f) of the Act was, in effect a special period of temporary total disability during the period of time in which the claimant was engaged in his program of vocational rehabilitation. In this case, if we determine maintenance to equal a special period of “temporary partial disability’ during the approximate six months vocational rehabilitation program, we find the claimant is entitled to 25’/2 weeks times $66.30, which equals a total maintenance benefit due the claimant of $1,695.75.”

The majority is unalterably opposed to the award on the grounds that “We find no authority for this kind of calculation.” But I submit that there is a wealth of persuasive authority to support the Commission’s action separate and apart from the Commission’s own case of Gray v. Armour, supra.

The Supreme Court of Minnesota in Vierling v. Spencer Kellogg & Sons Inc., 245 N.W. 159, in approving the allowance of $20.00 per week for twenty-five weeks, by the Compensation Commission as a maintenance award to a disabled employee whose net income, during his retraining, was less than his income before his injury observed:

“Indeed, under the spirit and the construction of the Workers’ Compensation Act, much must necessarily be left to the discretion of the Commission. It guides the state’s policy in industrial injury. It has great responsibility and meets delicate problems. The exercise of discretion in the instant case was toward an employee who was entitled to compensation for retraining . . .”

See also: Adams v. Nadave, 245 N.W. 2d 277 (1976), where the Minnesota Supreme Court sustained the Minnesota Compensation Board in requiring an employer to pay up to 104 weeks of additional compensation during the actual period of retraining.

In Symons v. National Electric Products, Inc., 414 Pa. 505, 200 S. 2d 871 (1964), the Supreme Court of Pennsylvania affirmed the holding of the Compensation Board in the suspension of weekly compensation benefits where the Board found that as a result of rehabilitation, the claimant was earning wages in excess of those earned at the time of his accident. A fortiori, the Arkansas Workers’ Compensation Commission was justified in considering the differential in the claimant’s income, before and after his injury, in calculating the maintenance award.

In Conatser v. D. W. Hoskins Truck Service, 210 Ark. 441, 194 S.W. 2d 680 (1946), the claimant was earning $37.50 per week at the time of his injury and later earned between $40.00 and $71.00 per week. The Commission suspended the compensation benefits payable to the claimant. The Arkansas Supreme Court in affirming the Commission said:

‘The Workmen’s Compensation Act does not call for general accident insurance; its purpose is to protect the worker or employee against reduced or lost earning power and when it is shown that the employee is earning higher wages in the same employment or otherwise after the injury than before he is not entitled to compensation under the act.’

In Ruiz v. City of Albuquerque, 577 P. 2d 424 (1978), the Court of Appeals of New Mexico stated that although the retraining provision of the Compensation Act provides that the courts must determine whether a disabled employee needs vocational rehabilitation services, this determination does not rest within the exclusive discretion of the courts; that if there is sufficient evidence to warrant a finding of vocational rehabilitation, the award is mandatory.

In Ranger Insurance Co. v. Speck, 243 S.E. 2d 593, 145 Ga. App. 327, the Board of Workers’ Compensation in awarding additional benefits for retraining did so under a Board rule which provides:

. . Consistent with and in addition to medical and other treatment, rehabilitation may include, but is not limited to: Goods and services necessary in assessment, vocational evaluation, guidance and counseling, vocational planning and vocational training.” (Emphasis supplied)

The Court of Appeals of Georgia in affirming the Board’s action, said:

“The Board was authorized to find that provision for the claimant’s education was necessary and practical to reduce his disability and facilitate his return to suitable employment.” (Emphasis added)

The Arkansas Supreme Court in Gordon v. Cummings, 262 Ark. 737, 561 S.W. 2d 285 (1978), in articulating the unique posture administrative agencies have in matters as sensitive and delicate as the issue here, said:

“. . . [Administrative agencies are better equipped than courts, by specialization, insight through experience and more flexible procedures to determine and analyze underlying legal issues . . . This recognition has been asserted, as perhaps the principal basis for the limited scope of judicial review of administrative action and the refusal of courts to substitute their judgment and discretion for that of the administrative agency.”

The Commission found appellee’s retraining program acceptable and “reasonable in relation to the disabilities sustained.” Consequently, the Commission was duty bound to allot “reasonable expenses of travel and maintenance and other necessary costs” in the form of additional benefits for a period not to exceed sixty weeks. The Commission, which adr ministers and implements the State’s policy in industrial injury, was presented with a fact question regarding not only the extent of the benefits appellee should receive, but what constituted “maintenance.” Indeed, the Commission, in an effort to overcome the apathy that many disabled employees have shown to the idea of rehabilitation may have desired to motivate, and rightly so, towards rehabilitation.

The majority has displaced the judgment of an agency that is better equipped than an appellate court to deal with an issue of the magnitude we have before us and substituted its own. The most charitable comment that can be conferred to the majority’s posture is that the decision tends to encourage the injured employee to become sicker.

Finally, it is well settled that in reviewing a decision of the Workers’ Compensation Commission, the appellate court must view the evidence in the light most favorable to support an award of the Commission and every legitimate inference must be drawn in favor of the employee. Simmons National Bank v. Brown, 210 Ark. 311, 195 S.W. 2d 539 (1946).

The pivotal point in the majority’s opinion in reversing the Commission is simply: “We find no authority for this kind of calculation.” If this were the standard to be followed on controversies presenting new issues, the law would be deprived of the opportunity to develop and cope with the changes in an ever evolving society. Human progress and advancement would be minimal, if not retarded completely.

Moreover, the majority’s opinion cries out for logic and consistency. Following the majority’s criticism of the Commission’s action for lack of an authoritative precedent, the majority makes this open admission regarding its own posture: “While we have no cases to which we can refer, the tenor of § 81-1310(f) contemplates rehabilitation at an institution or place away from the claimant’s home, thus necessitating ‘maintenance.’

It is settled law in this State that in considering Workers’ Compensation provisions and definitions, the appellate court must construe and apply the provisions and terms liberally in favor of a claimant in the light of the beneficent and humane purposes of the act, resolving all doubtful cases in his favor. Reynolds Metals Co. v. Brumley, 226 Ark. 388, 290 S.W. 2d 211 (1956); Arkansas Nat. Bk. v. Colbert, 209 Ark. 1070, 193 S.W. 2d 806 (1946).

Our Supreme Court in further articulating this posture, made the following comment:

“. . . Liberality of construction with reference to individual rights under our act is resorted to whenever obscurity of expression or inept phraseology appears and, given a restrictive construction, would have the effect of defeating praiseworthy purposes that undoubtedly actuated our lawmaking body.”

See: Massey v. Poteau Trucking Co., 221 Ark. 589, 254 S.W. 2d 959 (1953); McGehee Hatchery Co. v. Gunter, 237 Ark. 448, 373 S.W. 2d 401 (1963).

II.

PENALTIES

The majority has reversed the action of the Commission in awarding a 20% penalty on medical bills and attorney’s fees. The reason advanced: “We hold that the reference in § 81-1319(f) to ‘installment, payable under the terms of the award’ does not include medical and legal expenses.” The majority further commented as follows:

“. . . Looking to the context of our statute, as we should ... as well as to its literal meaning, we would have to speculate on legislative intent to say the penalty applies to the medical and legal payments provisions.”
Ark. Stat. Ann. § 81-1319(f) provides:
“FAILURE TO PAY AWARD. If any installment, payable under the terms of an award, is not paid within fifteen (15) days after it becomes due there shall be added to such unpaid installment an amount equal to twenty (20) per centum thereof, which shall be paid at the same time as, but in addition to, such installment unless review of the compensation order making such award is had as provided in section 25 [§ 81-1325].”
Ark. Stat. Ann. § 81-1302(i) provides:
“ ‘Compensation’ means the money allowance payable to the employee or to his dependants, and includes the allowance provided for in section 11 [§81-1311], and funeral expense.” (Emphasis supplied)
Ark. Stat. Ann. § 81-1311 provides:
“MEDICAL AND HOSPITAL SERVICES AND SUPPLIES. — The employer shall promptly provide for an injured employee such medical, surgical, hospital, and nursing services, and medicine, crutches, artificial limbs and other apparatus as may be reasonably necessary for the treatment of the injured received by the employee . . .”

The narrow construction placed upon § 81-1319 (f), by the majority, demonstrates clearly that the majority fails to perceive that the pivotal word in I 81-1319(f) is not “installment,” but on the contrary is “award.” “Award” is the central word in the statutory scheme.

Section 81-1302(i) states clearly that the allowance provided for in § 81-1311 — MEDICAL AND HOSPITAL SERVICES AND SUPPLIES — and funeral expenses are properly included within the definition of the term “compensation.” Consequently, whenever any element of compensation, or, stated another way, an award is not paid within fifteen days after it becomes due, a penalty of 20% is added.

The weakness in the majority’s posture in making the term “installment” the central word in the penal provision is demonstrated when an award of compensation is paid in one lump sum figure rather than in installments. In other words, if an award is made in one lump sum instead of in a series of payments, and the respondent fails to pay the lump sum within fifteen days after it becomes due, does this mean that the claimant is disentitled to the penalty because the award is not being paid in installments? Under the reasoning of the majority, the answer is in the aifirmative.

Section 81-1319(k) provides:
“Whenever the Commission determines that it is for the best interest of the parties entitled to compensation, . . . the liability of the employer for compensation may be discharged by the payment of a lump sum . . .”

In Key v. Ark. P. & L. Co., 228 Ark. 585, 309 S.W. 2d 190 (1958), appellant argued that the words “compensation for disability” referred only to money paid to a claimant on account of the original injury or disability and not to compensation for medical or hospital expenditures. The Arkansas Supreme Court in rejecting this contention said:

“We think, however, that this contention must be rejected because of the definition given to the word ‘compensation’ by the Act itself . . . reads as follows:
“ ‘Compensation’ means the money allowance payable to an employee or to his dependents as provided for in this Act, and includes funeral benefits and allowances for hospital and medical expenses, provided therein;”
The Court concluded:
“It seems to us that the above language is too plain to require or permit interpretation or amplification.”

I concede that attorney fees are not included in the statutory definition of compensation, but nevertheless, the Commission was justified, because of the unnecessary delay on the part of the respondent, in affixing penalties on the attorney’s fees.

In Harmon v. Mid-South General Contractors, Inc., 218 So. 2d 390 (1969), the Court in approving the imposition of penalties said:

“Statutory penalties and attorneys’ fees were imposed where the evidence showed a lack of concern by the insurer of the injured workers’ rights.”

In Brantley v. ADH Building Contractors, Inc., 215 So. 2d 297 (1968), the Supreme Court of Florida stated:

“An obvious purpose of the penalty provision is to induce prompt payment of legitimate claims and to protect the claimant against unnecessary and unjustifiable delays.”

In Finn v. Delta Drilling Co., 121 So. 2d 340 (1960), the Louisiana Court of Appeal approved the action of increasing an attorney’s fee from $1,640.00, by assessment of a stattory penalty for arbitrary nonpayment of compensation, to $2,000.00.

The prompt payment of medical bills and attorney’s fees can, indeed, benefit the claimant in a variety of ways. For example, prompt payment of legitimate bills can prevent embarrassment caused from the activity of collection agencies and the unnecessary time and expense involved in litigation; a claimant can avoid an unfavorable credit rating; an injured employee would be less apprehensive about visiting his physician or attorney for treatment or advice knowing that his bills have been promptly paid by a respondent.

Moreover, it is clear that medical bills are regarded as compensation and the physician, as here, who has rendered services and been deprived of the use and benefit of his fees should be afforded the penalty. The attorney who has rendered invaluable services in behalf of the claimant and has been required to wait an unreasonable length of time for his fees is equally entitled to the penalty. It seems clear from the record that the respondents became aware of existing medical bills during September, 1976, and it seems equally apparent that these bills were not paid as late as July, 1978.

For the reasons stated, I would affirm the action of the Commission.

       One of the basic problems to a successful rehabilitation program is how to encourage injured employees to take part in the rehabilitation process. Many disabled employees who are worthy candidates for retraining and who could successfully improve the economic lot for themselves and their families and reduce employers’ cost in compensation cases “won’t leave the shelter of disability to seek a new haven of employment, fearing [they] will be left to the elements.” See: Rehabilitation Within the Workmen’s Compensation Framework, 19 Rutgers Law Review 401 (1965).

       Appellee, a 35 year old male, was residing at Rogers, Arkansas, at the time of his injury. He moved to Stack City, Missouri, in order to participate in his rehabilitative program. Upon completion of his training, it seems that he will be in a position to acquire the business, a wood shop.

        See: Southern Cotton Oil Co. v. Friar, 247 Ark. 98, 444 S.W. 2d 556 (1969), where the Arkansas Supreme Court stated that while the lump sum payment is not an advantage to the claimant, it is frequently of benefit to all parties.


source: Caselaw Access Project

author: David Newbern, Judge.

license: Public Domain

text:
    Brenda BROTHERTON v. Charles L. DANIELS, Director of Labor and CHILDREN’S COLONY
    CA 79-354
    595 S.W. 2d 701
    Court of Appeals of Arkansas
    Opinion delivered March 5, 1980
    Released for publication March 26, 1980

      Appellant, pro se.

      Herrn Northcutt, for appellees.
   David Newbern, Judge.

Ark. Stat. Ann. § 81-1106 (a) (Supp. 1979), provides that when an employee voluntarily leaves a job to accompany his spouse to a new place of residence he is not disqualified from receiving unemployment compensation “if he has clearly shown, upon arrival at the new place of residence, an immediate entry into the new labor market and is, in all respects, available for suitable work.”

The claimant in this case registered with the agency soon enough after arriving at her destination, and seems to have made reasonable efforts to find a job. She was denied compensation because she allegedly said, upon applying for benefits, that she was not going to be able to work until after she found a baby sitter.

The claimant testified she tried to make it clear that arranging for a sitter would be no problem, but the agency employee compiling the worksheet would not write it down that way.

All we have by way of evidence to support the board’s determination is the record of the referee reading from the worksheet compiled by the agency. The worksheet is not included in the record.

It simply is not supportive of the board’s decision to say the claimant needed a sitter and had not arranged for one. There is no evidence whatever that she had been offered any job. To say she was not available for work because she had not arranged for a sitter so she could work at a job she did not yet have seems somewhat far-fetched.

The claimant testified she had looked for work at a number of places and her husband was presently unemployed and able and available to care for her children.

Reversed and remanded.


author: Ernie E. Wright, Chief Judge.

text:
    Connie Diane NORTON v. Wallace NORTON
    CA 79-10
    595 S.W. 2d 709
    Court of Appeals of Arkansas
    Opinion delivered March 12, 1980
    Released for publication April 2, 1980

      McAllister, Wade, Burke & Eldridge, P.A., by: John R. Eldridge, III., for appellant.

      Boyce R. Davis, for appellee.
   Ernie E. Wright, Chief Judge.

The appellant was granted a divorce from appellee on October 6, 1977. The decree incorporated by reference a property settlement and child custody agreement. The agreement provided appellant would have custody of the minor child, Carey Glenn Norton, with the appellee to have reasonable visitation rights including summer visitation. The appellee was required to pay monthly child support, except while the child should be in the primary care of appellee during two and one-half months in the summer.

In January, 1979, appellee filed a petition in the divorce proceeding to restrain appellant from changing the name of the minor son to “Carey Brian Magers”. Appellant has remarried and her new surname is Magers. The appellant filed a response to the petition in effect alleging the name change was in the best interest of the minor child.

The evidence showed the appellant had enrolled the minor child in school with the above indicated name change after her remarriage, that appellee had exercised his visitation rights with the child and had paid child support as provided by the agreement and decree. Appellant gave as her reason that she felt for her to come to his school room as mother of the child with the name of “Magers” and the child’s name “Norton” would cause problems for the child.

The court found the appellee had shown a paternal interest and concern for the child, and that appellant had failed to show sufficient reason for attempting informally to change the child’s name. She was enjoined from changing the child’s name either informally or by court proceeding.

Appellant contends the court erred in failing to apply the “best interest of the child” test with respect to the name change and in enjoining the name change.

We hold no error is demonstrated. There was no substantial evidence that changing the child’s name would be beneficial to the child. In Clinton v. Morrow, 220 Ark. 377, 247 S.W. 2d 1015 (1952), it was held that when the natural father desires to have his children bear his name, the discretion of the court to grant a name change of minor children should not be exercised unless it is for the best interests of the children. In the Clinton case the court upheld an order granting the name change, but there were a number of facts in evidence from which the chancellor found the charge was in the best interest of the children. In the present case no substantial facts were presented in evidence to warrant changingthe child’s name.

Appellant contends the court order went too far in enjoining appellant from seeking a name change in court pursuant to Ark. Stat. Ann. § 43-801 (Repl. 1977).

When the chancery court has awarded custody of a minor child, as in the present case, the child is a ward of the court, and it is the duty of the court to make such orders as are appropriate to safeguard the interests of the child Kirk v. Jones, 178 Ark. 583, 12 S.W. 2d 29 879 (1928).

We are unable to conclude the restraining order prohibiting appellant from changing the name of the child or seeking a change of the name of the child by court proceeding is contrary to the best interest of the child. However, the court in remarks from the bench made it clear the appellant has the right in the future to come before the trial court and show sufficient grounds for changing the child’s name.

The appeal also seeks reversal of the part of the court order which found appellant was absolved of responsibility to deliver to appellee a certain refrigerator and appellee was absolved of responsibility to deliver to appellant a certain color TV set. Ownership of these items had been settled in the property settlement agreement, but possession had not been exchanged.

After the divorce and pursuant to a hearing involving inter alia compliance with the property settlement agreement, the court on November 17, 1978, ordered appellee within thirty days through his attorney, to make arrangements for the return to appellant of certain items of personal property described in her counterclaim to appellee’s petition for modification of decree of divorce.

Pursuant to the court order counsel for appellee wrote counsel for appellant a proposal for exchange and settlement of the few items of property that had not been exchanged by the parties. There is no indication in the record there was any response to this letter. At the hearing culminating in the order from which this appeal stems the appellant gave no testimony concerning the personal property. The appellee testified the remaining property division dispute centered around the refrigerator that does not work which appellant has not delivered to him and a color TV set that does not work which he has not delivered to appellant. Appellee testified he considered them about equal in value. The court found the two items to be equal in value in making the order relieving each party of further responsibility on the exchange of personal property.

We conclude from the failure of appellant to testify with reference to the personal property items and the testimony of appellee that the inoperative refrigerator and inoperative TV set are of trifling value that the maximum “de minimis non curat lex” applies. 5 Am. Jur. 2d 231. We will not reverse the trial court on a mattér too small in value to justify reopening the case.

We affirm the order, but with instructions that the order is not to be construed as restraining appellant in the future from filing appropriate petition in the trial court seeking to change the name of the child.


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    Jessie W. TONEY v. Sylvia MILLER
    CA 79-93
    597 S.W. 2d 102
    Court of Appeals of Arkansas
    Opinion delivered March 12, 1980
    Petition for review denied April 14, 1980
    Petition for rehearing denied April 23, 1980
    Released for publication April 23, 1980

      Laser, Sharp, Haley, Young & Huckabay, P.A., for appellant.

      Nathan Gordon, for appellee.
   Ernie E. Wright, Chief Judge.

This is an appeal by Mr. Toney from an order of the Conway County Circuit Court vacating and setting aside the verdict of the jury, the judgment thereon and ordering a new trial. The jury returned a verdict against the appellee on her counterclaim for damages arising out of a motor vehicle accident. The motion for new trial, in addition to challenging the sufficiency of the evidence to support the verdict, alleged there was error of law at the trial materially affecting the substantial rights of the appellee. The order setting aside the verdict and judgment was based on the finding, “The verdict of the jury is not sustained by sufficient evidence and is against the clear preponderance of the evidence.

The appellant had filed a complaint for damages against the appellee, the appellee counterclaimed for damages, and at trial the jury verdict denied recovery on both the complaint and the counterclaim.

For reversal appellant asserts the trial court erred in granting a new trial on the counterclaim on the ground the verdict is against the preponderance of the evidence.

The burden of appellant’s argument for reversal is directed at the circumstance that Circuit Judge Roberts who presided over the trial did not act upon the motion for new trial before he left office, and a transcript of the trial record was not available to Judge Eddy when he vacated the judgment and granted a new trial. The appellee filed with the motion for new trial a ten page brief which purported to set out the substance of the testimony of the witnesses and also argues the legal issues raised by the motion. The argument contended the verdict against the appellee on her counterclaim was against the preponderance of the evidence and that AMI Instruction 903 which included Ark. Stat. Ann. §§ 75-618(c) and 75-647 was erroneously given over appellee’s objection. The appellant filed a response to the motion along with a brief setting out appellant’s version of the substance of the testimony that appellant urged the court to consider along with argument of the legal issues raised by the motion for new trial. Appellant’s brief made no objection or issue about Judge Eddy not having the transcript of the trial available. Appellant’s brief argued the correctness of AMI Instruction 903 as given.

The trial transcript now before us shows that Judge Eddy had before him in the briefs of the respective parties a fair summary of the evidence presented at trial. In addition respective counsel appeared before the court and argued the motion for new trial. Counsel for appellee orally summarized the material evidence developed at trial. At the conclusion of the rather lengthy summary by counsel for appellee, counsel for appellant objected to consideration of evidence that was adduced at trial on the ground there was no transcript of that evidence before the court. The judge ruled he would consider the evidence as summarized upon the assumption the evidence adduced at trial was as represented by counsel. Counsel for appellant did not dispute the testimony as summarized by appellee’s counsel, but took the position he could not say what the testimony was, absent a transcript.

There was before the judge a substantially correct summary of appellant’s testimony as found in the trial transcript that the appellee had stopped her car in the southbound lane of traffic on the highway in front of the car appellant was driving. Appellant was driving about thirty-five miles an hour and first observed the car stopped in his lane of traffic about 100 feet ahead of him. He did not apply brakes until he was about six feet from appellee’s car. His vehicle collided with the rear end of appellee’s car. He did not know why he did not apply his brakes earlier or pull over and pass in the other lane. There was no approaching traffic. The summary of the evidence before Judge Eddy and the transcript of the evidence at trial shows the appellee testified she slowly brought her car to a stop in the highway because of a skidding car out of control ahead of her, and that she had been stopped only seconds when her car was struck from behind by appellant’s car.

The judge granted the motion for new trial on the assumption he was correctly apprised of the material evidence presented at trial. While unquestionably it is preferable for a judge who does not preside at the trial to have before him a transcript of the evidence before ruling upon a motion for a new trial, we cannot say the court abused its discretion or that the appellant was prejudiced since the summary of the material evidence before the judge is a fair summary of the evidence as disclosed by the transcript. On appeal, the order for a new trial should be sustained unless the evidence supports the verdict so clearly that an abuse of the trial judge’s discretion must be found. The rule that a verdict supported by any substantial evidence must be upheld on appeal does not apply when the trial court sets aside the verdict as being against the weight of the evidence. Worth James Construction Co. v. Fulk, 241 Ark. 444, 409 S.W. 2d 320 (1966).

Appellee contended below and on appeal the court erred and appellee was entitled to a new trial because the court gave over appellee’s specific objection the following AMI 903 Instruction.

There were in force in the State of Arkansas at the time of the occurrence statutes which provided:
Section 75-618(c): No person shall stop or suddenly decrease the speed of a vehicle without first giving an appropriate signal in the manner provided herein to the driver of any vehicle immediately to the rear when there is opportunity to give such signal.
Section 75-647: Upon any highway outside of a business or residence district no person shall stop, park or leave unattended, upon the paved or improved or main traveled part of the highway when it is practical to stop, park, or so leave such vehicle off such part of said highway, but in every event a clear and unobstructed width of at least 20 feet of such part of the highway opposite such standing vehicle shall be left for the free passage of other vehicles and clear view of such stopped vehicle be available from a distance of 300 feet in each direction. A violation of one or more of these two statutes, although not necessarily negligence, is evidence of negligence to be considered by you along with all of the other facts and circumstances in the case.

Counsel for appellee objected to each of the above statutes being given. The objection to § 75-618(c) was on the basis the statute was inapplicable because the appellant testified he saw the appellee’s vehicle. The thrust of appellee’s argument appears to be that inasmuch as appellant saw the vehicle stopped 100 feet ahead, the giving of a signal indicating a stop or sudden decrease in speed would be of no consequence under the circumstances shown by the evidence. We believe this statute could properly be considered by the jury in weighing the evidence.

Counsel for appellee also objected to § 75-647 being read to the jury on the ground the statute does not apply to stops arising out of exigencies of traffic.

Since the undisputed evidence shows the appellee had not parked her motor vehicle upon the traveled portion of the highway, but shows she momentarily stopped because of the exigencies of traffic, we conclude it was prejudicial error for the court, over the objections of the appellee, to include the statute in the instructions. In A.S. Barboro S Co. v. James, 205 Ark. 53, 168 S.W. 2d 202 (1943), the court, over objections of the defendant, instructed the jury in the language of the parking statute § 75-647. The defendant had stopped or come to a near stop preliminary to making a left turn off the highway. The Supreme Court reversed, holding the non-parking statute had no place in the case. The Court said there was no such stopping or parking as was contemplated within the meaning of the non-parking statute.

We conclude the trial court erred by including Ark. Stat. Ann. § 75-647 (Repl. 1979) in the instructions. The failure of the trial court to include this error as a reason for granting a new trial does not preclude our considering the erroenous instruction as a ground for affirmance on appeal.

The order vacating the judgment and granting a new trial is affirmed.


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    Earl Ray SORRELLS and Sandra Lee SORRELLS, His Wife v. BAILEY CATTLE COMPANY
    CA 79-226
    595 S.W. 2d 950
    Court of Appeals of Arkansas
    Opinion delivered March 12, 1980
    Released for publication April 2, 1980

      Homer Tanner, for appellants.
    • Meredith P. Catlett and Friday, Eldredge & Clark, for appellee.
   Ernie E. Wright, Chief Judge.

Appellants, Mr. and Mrs. Sorrells, instituted action in the Lonoke Chancery Court on October 3, 1979, to rescind a contract under which they undertook to purchase 30 acres of land in Lonoke County, Arkansas from the appellee, Bailey Cattle Company, Inc. Appellants alleged the contract was indefinite in essential terms and that appellee had breached the contract. The appellee filed an answer, and a counterclaim to foreclose the equitable interest of appellees. At the conclusion of the trial the chancellor found the contract to be valid, appellants to be in default on payments under the contract, and entered judgment against appellants in the sum of $22,332.24 principal together with interest through December 31, 1977 in the amount of $2393.46 with interest on the aggregate amount of $24,725.70, at the rate of 9 per cent per annum from January 1, 1978 until paid together with costs. The judgment was decreed to be a lien on the land and foreclosure sale was ordered if the judgment should not be paid within ten days.

On appeal, appellants seek reversal and assert the court erred in denying rescission.

On November 10, 1976, the appellant, Earl Ray Sorrells, paid earnest money of $2700.00 and made a written offer on a standard offer and acceptance form to purchase the following described land:

30 acres more or less located in Magnass Creek Valley Bailey Cattle Co. properties, in the Southwest corner running 1980’ North/South and 660’ East/West.

No location of the land by county, state or other description appeared in the offer. The offer was promptly accepted by execution of the acceptance on the offer form by Bailey Cattle Company.

The consideration and manner of payment in the offer and acceptance reads as follows:

The Buyer will pay 27000.00 for the property, 2700.00 in cash and the balance of $24,300.00 as follows: Ten yr. contract but amortized on 240 monthly payments each approx. 216.84 per mo.

The offer and acceptance provided the Seller would convey the property by general warranty deed to the Buyer, Earl Ray Sorrells, and contained the following provisions:

The owner of the above property, hereinafter called Seller, shall furnish at Seller’s cost a complete abstract reflecting merchantable title satisfactory to Buyer’s attorney, however Seller shall have an option to furnish Buyer, in place of abstract, a policy of title insurance, and submission of an abstract shall not constitute a waiver of this option. Seller shall have a reasonable time after acceptance within which to furnish abstract or title insurance. If objections are made to title, Seller shall have a reasonable time to meet the objections or to furnish title insurance.

The offer and acceptance provided that if title requirements are not fulfilled the earnest money would be promptly returned to the Buyer.

The offer was made through the real estate • office of Ernest Bailey, broker, and Ernest Bailey and his wife were the owners of all the stock of Bailey Cattle Company, Inc., the purported owner of the land involved in the transaction in issue. Mr. Bailey signed the acceptance of the offer on behalf of Bailey Cattle Company and is president of the company.

Mr. and Mrs. Sorrells went to the Bailey Real Estate Office for the purpose of buying some land in Lonoke County. They did not know Mr. Bailey, but stopped in his office as it was one of the first realty offices they observed when they drove into Cabot. They met Mr. Dan Molder, a salesman for Bailey’s realty office, who showed them the thirty acres in question. They walked the property and Mr. Molder showed what he said were some boundary lines, but later Mr. Bailey told Mr. Sorrells that was not the true line.

At some unknown date early after the offer and acceptance was executed on November 10, 1976, Mr. and Mrs. Sorrells and Bailey Cattle Company executed an undated instrument styled “Purchaser’s Agreement” provided by Mr. Bailey in which both Mr. and Mrs. Sorrells contracted to buy from the appellee some completely unidentified property in Lonoke County Arkansas. The agreement called for the same consideration as the offer and acceptance and had attached a note executed by appellants for the deferred portion of the purchase price of $24,300.00. The attached note, executed by appellants, was likewise undated. Although the offer and acceptance and the Purchaser’s- Agreement made no provision for interest, the note indicated interest and the payment clause reads, “Ten year contract based on twenty year pay out at 9% interest (to start January 10, 1977) principal and interest to be paid monthly, with payments of $218.64/mo.”

The contract was entered into with the understanding appellee was to furnish appellants a survey of the property and build a road to the property across adjacent land owned by appellee. Pursuant to the agreement as to the road, Mr. Bailey wrote appellants on December 28, 1977, as follows:

This is to inform you on the road to your property you purchased from me. It has been flaged and surveyors have almost completed the survey. Hopefully, this can be drawn up on paper promptly, so we may proceed on getting the road through.

As of the time of trial there was still no access road to the property and the appellants never at any time took possession of the property. Mr. Sorrells testified he requested Mr. Bailey to furnish an abstract but none was furnished. Mr. Bailey testified he did not remember Mr. Sorrells asking to be furnished an abstract, but he would not have furnished the abstract if the request had been made. He took the position he was not required to furnish an abstract until all of the purchase price was paid, and stated the Buyer could check the court records to see that he (Bailey) was the owner of the property. -

The Purchaser’s Agreement and attached promissory note provided no new benefit or consideration of any kind for the Buyer; but imposed the following additional restrictions, limitations and burdens upon appellants:

(1) The note called for interest on the principal at 9%, whereas the offer and acceptance did not call for interest.
(2) The Seller was entitled to a deed and abstract of title certified to the date of the agreement showing merchantable title only when the purchase price and interest is paid in full, whereas the offer and acceptance required the Seller to furnish an abstract reflecting merchantable title or title insurance within a reasonable time after the offer was accepted.
(3) The second agreement provided “Vi mineral rights retained by Seller”, whereas no such reservation appeared in the offer and acceptance.

Mr. Sorrells had never purchased rural lands previously, and had only purchased a platted city lot. He was unacquainted with the proper legal description of rural land by metes and bounds or by township, section and range. Appellants were not furnished the legal description of the property until early 1978 and were never furnished any document, recorded or otherwise evidencing ownership by appellee. No documentary evidence of title by appellee was offered at trial.

On February 24, 1978, the appellants listed the 30 acres, still indefinitely described, for sale with Bailey’s Realty Office, but there is no evidence Mr. Bailey’s office ever made any effort to find a buyer. At that time appellants had not made the February, 1978, monthly payment and were in arreas three monthly payments due in 1977. Mr. Bailey agreed to extend the time for making the payments. Appellants made no payments after the listing. The aggregate of the payments made, in addition to the down payment of $2700.00, was $1967.76.

The Court held the contract had not been “breached significantly enough” by Seller to order a rescission, and although expressing concern that an abstract had not been furnished and concern about whether there was an adequate description to constitute a valid contract, concluded the offer and acceptance considered with the Purchaser’s Agreement provided a sufficient key to locate the property and that the oral evidence explained the terms of payment. Personal judgment was rendered against appellants and foreclosure decreed.

Appellants contended below and on appeal there is no definite description of the land in the contracts or either of them to constitute a binding contract for the sale of land, thereby raising the issue of the statute of frauds. Stanford v. Sager, 141 Ark. 458, 217 S.W. 458 (1920). The Arkansas Statute of Frauds, Ark. Stat. Ann. (Repl. 1962) § 38-101, requires that a contract for the sale of an interest in land be in writing and signed by the party to be charged. Clearly neither agreement separately meets the requirement of the statute of frauds. Appellee contends the two instruments may be considered together and that combined they “Furnish some means of identification” of the land. The second document purports to contract with reference to some completely unidentified property situated in Lonoke County, Arkansas, and the first document, while not identifying the property as being within the United States, sets out the dimension as being 1980 feet North and South, 660 feet East and West and that it is in the Southwest corner of Bailey Cattle properties in Magnass Creek Valley. There is no indication in the document that Bailey Cattle properties has only one tract in Magnass Creek Valley. On the contrary, the use of the plural “properties” rules out such assumption from the instrument itself. Also, the term “Bailey Cattle Properties” is not the corporate name of the Seller. Therefore, even if the instruments should be construed together in an endeavor to determine whether the combined instruments provide a sufficient key so that a complete description of the property could be ascertained, we would have great difficulty in saying that the instruments do provide an adequate key.

In Turrentine v. Thompson, 193 Ark. 253, 99 S.W. 2d 585 (1963), the court said with reference to the requirements of a land description:

The deed itself must furnish a key by which the land sought to be conveyed may be identified. It will be observed that the description in the deed does not identify it as being in any county or even in the state. It does not furnish a key by which the land might be certainly identified . . . Had the deed said that it was all the land owned by Will Turrentine in Hempstead County, Arkansas, the deed itself would have furnished a key by which the land might be located, but to simply say it was all the land owned by him wherever situated is too uncertain.

Tiffany, Real Property, 3rd Edition, § 990, states that if a conveyance does not describe the land with such particularity as to render identification possible, the conveyance is nugatory, unless the deed contains a reference to another instrument which does include a sufficient description. Neither of the documents in the case before the court refers to the other or to any other document.

In Fordyce Lumber Company v. Wallace, 85 Ark. 1, 107 S.W. 160 (1907), the court said, “The description in the contract must be as definite and certain as that required in a deed of conveyance. Nothing less will satisfy the statute of frauds, which requires such contract (for sale of land) must be in writing.”

In Burns v. Meadors, 225 Ark. 1009, 287 S.W. 2d 893 (1956), the court held a metes and bounds description in a proffered deed referring to other conveyances, invalid in absence of showing by vendor that the conveyances referred to were recorded.

Even if the two instruments in the present case were considered together we cannot say they adequately describe the land.

The appellant, Mrs. Sorrells, clearly cannot be charged with the offer and acceptance as a part of any contract on her part.

However, we conclude the two instruments cannot be combined. First, appellant, Sandra Lee Sorrells, was not a party to the offer and acceptance and there was no provision in that instrument for any conveyance to her. The rule permitting instruments executed in the course of a transaction to be considered and construed together applies only to instruments executed by the same parties and for the same purpose.

Rawleigh Co. v. Wilkes, 197 Ark. 6, 121 S.W. 2d 886 (1938), states the general rale:

The general rule is that in the absence of anything to indicate a contrary intention, instruments executed at the same time, by the same parties, for the same purpose, and in the course of the same transaction, are, in the eyes of the law, one instrument, and will be read and construed together as if they were as much one in form as they are in substance.

Since the contract before us was for the sale of real estate we must look beyond the precedents applying to contracts not governed by the statute of frauds.

To permit consideration of two or more instruments together in a transaction for the sale of real estate to meet the requirements of the statute of frauds there must be some incorporation by one of the other or some reference to the other found in the instrument. Here we find no such reference in either instrument to the other. We cannot tell with any certainty by inspection of the instruments that they relate to the same land, we cannot rule out that the second instrument is not a purported contract for the purchase of a second tract of real estate, we can ascertain the second agreement purports to bind a new party, Sandra Lee Sorrells, it purports to contract for the conveyance of undescribed land in Lonoke County to both Buyers upon payment of the purchase price, one-half of the mineral rights in the land is excluded from the sale, and there are substantial differences in the two instruments as to interest on the deferred purchase price and the obligation of the Seller as to time for furnishing an abstract and evidence of merchantable title.

The United States Supreme Court had occasion to consider the application of the statute of frauds when two alleged contracts were in issue in Williams v. Morris, 95 U.S. 444 (1877). The case was an appeal from the Supreme Court of the District of Columbia involving a dispute over a contract for the sale of real estate in the District. By law the statute of frauds of Maryland was applicable and the statute was identical to our § 38-101. Both statutes are adoptions of Section 4 of the ancient English Statute of Frauds, IV Chitty’s English Statutes, 6th Edition, 1141. Two alleged contracts different in form and substance for the sale of premises were involved. The court held that even if parol evidence were introduced to show that one or both of the contracts were actually made in adequate terms and free of ambiguity, still the contract would not satisfy the requirement of the statute of frauds that the essential elements of the contract be in writing. None of the terms can be supplied by parol. The court said:

Unless the essential terms of the sale can be ascertained from the writing itself, or by reference in it to something else, the writing is not a compliance with the statute; and if the writing be thus defective, it cannot be supplied by parol proof, for that would at once introduce all the mischiefs which the statute was intended to prevent.

Neither instrument in the case before us refers to the other. Only by parol evidence can it be ascertained with any degree of certainty that the same premises are the subject of both agreements. The contracts are between different parties and conflict in numerous substantial ways.

In Pitek v. McGuire, 51 N.M. 364, 184 P. 2d 647 (1946), the New Mexico Supreme Court cited Williams v. Morris, supra, in holding antecedent correspondence could not be used to aid the faulty land description in the memorandum endorsed on a check, since the endorsement contained no reference to such correspondence. New Mexico in early years adopted the same English Statute of Frauds as has Arkansas. Rhodes v. Wilkins, 83 N.M. 782, 498 P. 2d 311 (1972), holds that any collateral means or data by which real estate can be identified must necessarily be referred to in a written contract or memorandum. The court said:

If it were otherwise, and parol evidence could be used to supply the defect, the purpose of the statute of frauds would at once be defeated and lost.

In Kyle v. Jordon, 196 Ala. 509, 71 So. 417 (1916), the court held a supplemental writing could not be considered with a deed because there were contradictions, in express terms, between the recitals in the deed and those in the separate writing, as to both the parties to, and the consideration for, the deed, and that there was no internal evidence of the identity and unity of the two writings to constitute a transaction sufficient to dispense with a reference in the deed to the separate writing, and the deed on its face indicates no reference to any other writing. The court said:

While it is possible, or even probable, that both the deed and the separate writing may relate to, or attempt to describe the same piece of land, yet there is no reference in the deed to any separate writing necessary to complete it, and nothing on the face of the papers to show that one is contemporary to the other. The evidence to this end is wholly oral, and therefore inadmissible and unavailing to unify the two writings. We still adhere to the former holding of this court that the rule is not absolute that the several papers shall, on their face, indicate a reference to each other, and that parol evidence may be admissible, in some cases, of contemporaneous facts, to show connection between the several writings; but to allow such proof, there must be some internal evidence of the identity and unity of the several writings as constituting a single transaction.

Moore v. Exelby, 170 Ark. 908, 281 S.W. 671 (1926) approved the use of letters beween the parties to be construed together as an enforceable contract for the sale of real estate. However, the court said:

In order to be sufficient, the letters relied upon must by reference to each other disclose every material part of a valid contract and must be signed by the party sought to be charged.

The provision in the offer and acceptance and in the note attached to the subsequent agreement as to the payment of the deferred purchase price is ambiguous and uncertain. Mr. Sorrells testified he did not know what the language meant. When Mr. Bailey was asked what the language meant he said, “It’s a ten year—a twenty year pay out, but coming due in ten years.”

We agree with appellants’ contentions the written agreements separately or considered together are too indefinite to be enforceable.

In Kromray v. Stobaugh, 212 Ark. 377, 206 S.W. 2d 171 (1947), the court said:

It may be true, as counsel state, that we have gone further than most courts, to require that all essential provisions of the contract be in writing in order to satisfy the statute of frauds; but at all events, such is our holding, and we adhere to it.

There are other reasons for reversal hereinafter discussed.

First, we point out that Mr. Sorrells already had the executed offer and acceptance to purchase the 30 acres when the second agreement was executed. The new agreement purported to deprive the Buyer of benefits provided by the first instrument, but it provided no new consideration or benefits to the Buyer. The weight of authority is that a subsequent agreement must be supported by consideration other than the consideration involved in the existing agreement. Here there is no new consideration flowing to the Buyer. Therefore, the new agreement is void and of no effect for lack of mutuality of consideration.

However, even if it should be said the last agreement and the offer and acceptance should be construed together as one contract, the rule is well established that ambiguous and conflicting provisions in an agreement will be construed most strongly against the party who prepared or caused the documents to be prepared. Ramsay Ex’x v. Roberts, 240 Ark. 943, 403 S.W. 2d 57 (1966). Here it was the Bailey corporate seller and its agent, Mr. Bailey the broker, who prepared or caused to be prepared all documents in the transaction, using printed forms with little care in filling in a minimum of information. The Buyers were so completely inexperienced they did not know to insist upon the prompt furnishing of an abstract showing merchantable title or title insurance as called for by the offer and acceptance. Therefore, whether we consider the second agreement as void or whether we consider both contracts together as the contract, clearly the appellee breached a vital part of the contract in failing to furnish an abstract promptly after acceptance of the offer, as equity compels us to conclude the provisions in the offer and acceptance with reference to promptly furnishing an abstract should control rather than the lax provision in the new agreement. Compliance with the provision in the offer and acceptance would have placed no undue burden on the Seller and was vital to the Buyer being able to determine whether he was acquiring merchantable title. At least the Seller should have made an abstract available for examination even if the abstract should later have been held by the Seller until the purchase price was paid in full.

Both contracts called for merchantable title and the undisputed evidence was that at the time of sale the 30 acres was mortgaged with other lands to First National Bank in Little Rock, a fact learned for the first time by the appellants after execution of the contracts. Appellants first learned at trial the amount of the mortgage when Mr. Bailey testified the mortgage debt is approximately $300,000.00 and the total land embraced in the mortgage, including the 30 acres, is five hundred acres. Mr. Bailey has nothing in writing binding the mortgage holder to release the 30 acres from the mortgage until the mortgage is paid. Thus, with the land so encumbered, it is clear there is an uncertainty as to whether the appellee would be in a position to furnish a merchantable title to the property after all the purchase price is paid. Without an abstract, appellants are uninformed as to other possible defects of title. In 6 Williston on contracts, Third Edition, 372, it is stated:

It cannot be admitted that a vendor whose title is so defective as to justify a purchaser in inferring that the defect is not likely to be cured can compel the purchaser to wait until the day fixed for performance in order to see whether by chance the vendor may be able to cure the defect.

We believe this rule to be based on sound reasoning, and decisions are there cited from many jurisdictions in keeping with the rule. Rest. Contracts, § 283 is in accord.

Neither the oifer and acceptance nor the Purchaser’s Agreement were acknowledged, and thus they were not recordable. The appellants were without means of giving notice to the world of their equitable interest in the property, as unacknowledged instruments for the conveyance of an interest in real estate do not qualify for recordation. Ark. Stat. Ann. (Repl. 1971) § 49-211.

The land is subject to foreclosure sale should the appellee default on its $300,000.00 bank mortgage; and should the appellee become a judgment debtor or bankrupt prior to delivery of a deed to the appellants, the land would be subject to judicial sale free of the recorded equitable interest of appellants.

It was established by undisputed evidence that concurrent with the written contracts there was an oral agreement appellee would build a road extending through appellee’s adjacent land to the thirty acres. This obligation was recognized by letter from Mr. Bailey to appellants. There was no other access to the property. This was a vital part of the consideration incident to the purchase, as it can be reasonably assumed appellants would not have contracted to pay $900.00 per acre for unimproved land without access, and the road was essential to the use and enjoyment of the property. This evidence was received without objection. No road had been built as of the date of trial, well over two years after the transaction. While the evidence does not disclose a precise date when the road would be built, the law presumed such an obligation will be performed in a reasonable length of time. We hold that more than a reasonable time had elapsed for appellee to build the access road and furnish a survey at the time appellants filed suit for the rescission, and that there was a breach of a vital part of the agreement under which appellants contracted to purchase the property. While evidence of the breach was received without objection, it was the duty of the court of equity to treat the pleadings as amended to conform with the proof.

Ark. Stat. Ann. § 27-1155 (Repl. 1979) provides that no variance between the allegation in a pleading and the proof is to be deemed material, unless it has actually misled the adverse party; and Ark. Stat. Ann. § 27-1160 provides the court may at any time, in furtherance of justice, conform the pleading to the facts proved. Under the authority of Old American Life Ins. Co. v. Lucy Harvey, 242 Ark. 720, 415 S.W. 2d 66 (1967), in a de novo review of the case we treat the pleadings as amended to conform with the proof.

At trial, appellee introduced a “preliminary” sketch or plat of some five hundred acres of land presumably belonging to appellee. The plat is not recorded nor is it intended to be recorded. It does not indicate in what county the land is situated. It purports to identify the subject thirty acres with “X” marks in the Southwest corner and indicates a road running through an adjacent body of land into the thirty acres. The road shown on the sketch remains only a proposed road providing access to the subject property. An examination of the undated “preliminary” plat clearly fails to show any survey of the thirty acres. The eastern part of the plat by indicating corners identifiable by section, distances, bearings, and evidence of previously set corners, shows evidence of some surveying on land substantially east of the thirty acres.

When appellee failed to built the road, failed to furnish a survey, failed to provide an abstract evidencing merchantable title or title insurance, and failed to show any certainty of being able to deliver a merchantable title with an admitted $300,000.00 mortgage on the property, appellants were left in the position of having no reasonable opportuity to resell their equity. Their only hope was that the appellee, who was in singular position to provide the access road and possibly arrange for merchantable title, would find a buyer for appellant’s equity. However, there is no evidence of any effort by appellee, as owner or broker, to find a resale.

Even if the agreements were construed together and a binding contract was found to exist, the rendering of judgment against the appellants in favor of appellee in the face of substantial breaches of the contract on the part of appellee, and decreeing foreclosure of the thirty acres, sans the access road, sans the survey and with a $300,000.00 outstanding mortgage is clearly unjust and inequitable.

The foreclosure sale of the property under such conditions would place appellant in an extremely vulnerable position. The appellee having control over road access to the property and the possible means of working out arrangements with the mortgage holder for clearing the $300,000.00 encumbrance on the title, could well be the only bidder interested at a foreclosure sale. Such a sale could and likely would result in a very low sale price leaving appellants with a relatively large unsatisfield personal judgment against them.

Even if the appellees were entitled to foreclosure, it was the duty of the court of equity to mold the remedy and impose conditions with reference to clearance of the $300,000.00 mortgage lien and building of an access road as would be just to the appellants. The Arkansas Supreme Court in State of Ark. Ex. Rel v. Cate, 236 Ark. 836, 371 S.W. 2d 541 (1963) sets out in some detail the powers and discretion of a court of equity in molding the granting of relief with such conditions attached as will avoid injustice to the party against whom the relief is granted. The decree makes no such provisions.

Finding, as we do, that the evidence discloses an unenforceable contract under the statute of frauds, that the property involved is encumbered for more than ten times the sale price, that there is uncertainty as to whether the encumbrance could be cleared upon payment of the purchase price in full, and that the appellee has failed to furnish an abstract and build a road to the property, we hold the transaction to be void, and that appellants are entitled to recover the sum of $4667.76 paid on the contract with the judgment to be decreed a lien upon the land with provision for foreclosure. We decline to award pre-judgment interest, as apparently appellants could have been in possession of the property, although they did not in fact take possession.

Reversed and remanded with directions for entry of a decree consistent with this opinion.


author: James H. Pilkinton, Judge.

text:
    David Patrick ROSWELL v. John B. DRIVER and Frances R. DRIVER
    CA 79-112
    596 S.W. 2d 352
    Court of Appeals of Arkansas
    Opinion delivered March 12, 1980
    Rehearing Denied April 9, 1980
    Released for publication April 9, 1980

      John Langston and Lessenberry & Carpenter, by: Thomas M. Carpenter, for appellant.

      Stephens & Crockett, by: Robert Crockett, for appellees.
   James H. Pilkinton, Judge.

This lawsuit involves title to real property; and the issue for determination is whether proper service was had on one party who, it is admitted, owned an undivided interest in the land.

David T. Roswell and Ray Evans originally owned the land involved as tenants in common, each owning an undivided one-half interest. Mr. Roswell died and his interest passed to his widow and only son, David Patrick Roswell, the appellant. Mr. Evans sold his undivided interest to Mr. and Mrs. John B. Driver, and they have brought this partition action to have the land sold and the proceeds divided according to the respective interests of the parties.

It is admitted that personal service was obtained on Mrs. David T. Roswell, the widow; but appellant David Patrick Roswell, the son and only heir at law of David T. Roswell, deceased, claims that no service, actual or constructive, was obtained upon him.

After the decree of partition, sale of the land to Mr. and Mrs. Driver, and order of confirmation, David Patrick Roswell filed a motion alleging that the proceedings were void as to him, claiming a meritorious defense, and praying that the decree, and all previous orders of the court adverse to his interests, be set aside because of unavoidable casualty based upon lack of service. This appeal comes from an order of the Chancery Court denying that relief.

The record shows an attempt was made to obtain service on appellant by warning order under the name “David T. Roswell, Jr.” The parties have hotly debated whether the defect in failing to identify appellant by his correct name in the warning order was fatal; however, we see no need to pass on that feature of the case because we find that the trial court erred for other reasons in refusing to vacate its decree and orders in this case. The record is crystal clear appellant had not been properly served regardless of names; therefore, the court had no jurisdiction to partition his interest at the time the orders in question were entered.

Due process means that in a contest concerning rights of life, liberty or property, a citizen must be given a reasonable opportunity to contest the propriety of each step in the proceedings against him. Davis v. Schimmel, 252 Ark. 1201 at 1208, 482 S.W. 2d 785 (1972). In Davis v. Schimmel, supra, the Arkansas Supreme Court said:

Due process requires, at a minimum, that one be given a meaningful opportunity for a hearing, appropriate to the nature of the case and preceded by notice, before he is deprived of any significant property interest, except where some valid, overriding state interest justifies postponing the hearing until after the event. Boddie v. Connecticut, supra; Board of Lever Commissioners v. Johnson, 178 Ky. 287, 199 S.W. 8, L.R.A. 1918E 202 (1917). Due process requirements are satisfied if the property owner has reasonable notice and a reasonable opportunity to be heard and to present his claim or defense, or to protect and enforce his rights, before a tribunal having power to hear and rule his cause, due regard being had to the nature of the proceeding and the character of the rights which may be affected by it. Dohany v. Rogers, 281 U.S. 362, 50 S. Ct. 299, 74 L. Ed. 904, 68 A.L.R. 434 (1930); State ex rel Sweezer v. Green, 360 Mo. 1249, 232 S.W. 2d 897, 24 A.L.R. 2d 340 (1950), [overrued on another point, State v. Kirtley, 327 S.W. 2d 166 (Mo. 1959).

In the case at bar appellees filed an amended complaint designating appellant as a party defendant by his correct name, and then having a summons issued for him dated March 6, 1978, directed to the Sheriff of Pulaski County, Arkansas. There was a non est return dated March 10, 1978, on this particular summons. Thereafter an affidavit for warning order was executed and filed on April 11, 1978, and the clerk appointed an attorney ad litem. The warning order was then issued and published for four consecutive times commencing April 13 and ending May 4, 1978. A decree was entered on August 10, 1978. However, the attorney ad litem letter to appellant had been addressed to him at “Clinton, Arkansas”, and was returned unclaimed. The report of the attorney ad litem was not filed until December 11, 1978, long after the report of sale and confirmation; and, also after the Motion to Vacate had been filed by appellant on October 31, 1978.

Appellant has mounted a direct attack upon the action of the Chancery Court in entering the partition decree and subsequent orders. Meserve v. Edmonds, 223 Ark. 297, 265 S.W. 2d 704 (1954); Davis v. Schimmel, supra.

The rule is well established that when constructive notice only is given, the requirements of the statute must be strictly complied with. Sinclair Refining Co. v. Bounds, 198 Ark. 149, 127 S.W. 2d 629 (1939). Where essential statutory provisions governing service by publication are not strictly complied with as to nonresident defendants, all proceedings as to them are void. Bridler v. Beidler, 71 Ark. 318, 74 S.W. 13.

As noted in Davis v. Schimmel, supra, it has even been held that, where jurisdiction must be exercised by a court in a special manner, and not according to the course of common law, the facts essential to the exercise of such jurisdiction must appear in the record; and, if they do not, a judgment in the proceeding is void. Monks v. Duffle, 163 Ark. 118, 259 S.W. 735 (1924).

Here the record discloses that the attorney ad litem failed to discharge the duties required of him. The report shows he simply addressed a letter to appellant at Clinton, Arkansas, 72031, which was returned unclaimed. It was clear to all by then that David Patrick Roswell was a nonresident defendant. In fact, the affidavit for warning order so shows. The report of the attorney ad litem was insufficient on its face and was not even filed until December 11, 1978. Had it been timely filed the chancellor would have no doubt rejected it and ordered the attorney ad litem to make proper inquiry in a effort to determine the best last known address of the appellant and to make a bona fide attempt to notify him as the law requires an attorney ad litem to do. Frank v. Frank, 175 Ark. 285, 298 S.W. 1026 (1927).

We hold that the procedure here was not in strict compliance with statutory requirements. Ark. Stat. Ann. § 29-404 (Repl. 1979). Therefore reversal and remand is required; however, there is no reason why this case cannot proceed to an orderly retrial following remand. Appellant is now in court for all purposes. He has entered his appearance generally; but that appearance does not cure any decree, or orders, previously made in the case which are void for want of process. Davis v. Schimmel, supra.

Reversed and remanded for further proceedings not inconsistent with this opinion.


author: Marian F. Penix, Judge.

text:
    Mary M. O’BANNON v. E. Barrie O’BANNON
    CA 79-72
    597 S.W. 2d 825
    Court of Appeals of Arkansas
    Opinion delivered March 12, 1980
    Review Denied April 16, 1980
    Released for publication April 30, 1980

      Sanford, Pate, Marchewski, by: Jon R. Sanford, for appellant.

      Mobley & Smith, by: William F. Smith, for appellee.
   Marian F. Penix, Judge.

The parties were married in November, 1967. It was the second marriage for him, the third for her. Her two young daughters lived with the parties. His four children lived with their natural mother. They first lived in Mary O’Bannon’s house for several months. Mary’s daughters received allotments from the VA. They sold Mary’s home, using the $2,000 equity for furnishings for a new home. Barrie O’Bannon’s four children came to live with them. They made several moves—once to Indiana—then to Russellville. On July 26, 1976 Mary sued for a divorce and moved to Texas,. In an amended complaint she alleged general indignities. Barrie counter-claimed for divorce. The action was pending for a couple of years. On August 12, 1976, a Temporary Order was filed which provided for temporary maintenance as well as making Barrie responsible for the couple’s joint property.

. . . It is recognized that the plaintiff [Mary] has an interest in the properties earning a portion of this monthly support amount. The defendant [Barrie] shall manage all income earning properties and shall collect all rents and all payments on notes receivable and make an accounting to the plaintiff ....

In March, 1978 the Court, in response to Mary’s petition objecting to the accounting figures of Barrie, appointed a receiver to take charge of all the property. Both parties were denied a divorce on the grounds of recrimination and con-donation. The Court rendered an accounting determining what was joint and what was separate property and any and all credits due each party from the other. The Court retained jurisdiction after awarding Barrie the asset known as the “Misak Note” as his sole property.

Mary appeals and Barrie cross-appeals.

I

Mary O’Bannon alleges the Court erred in denying her a divorce. The transcript includes 451 pages of lengthy testimony and exhibits. Each party testified at length about the indignities visited upon him or her by the other party. Mary’s 20 year old daughter and her 16 year old daughter testified that Barrie O’Bannon had made sexual advances and had physically and verbally abused them. Mary O’Ban-non’s brother, Lee Wilson, testified as to Barrie O’Bannon’s unfriendliness back in 1972. Donna Rainwater testified she heard Mary O’Bannon threaten Barrie with criminal charges involving her daughters and with an IRS audit, if Barrie O’Bannon refused to [agree to] a settlement she had proposed.

Barrie’s 22 year old son, Stephen, testified about verbal abuses from Mary and about her sexual indiscretions with him as a young teen-ager. Barrie’s 16 year old daughter Sherri testified as to Mary’s temper and Mary’s slanders towards Sherri’s mother, Barrie’s first wife. Barrie’s father testified about Mary leaving home when he and her mother-in-law came for a visit. Barrie’s mother testified about Mary’s concern for her daughters’ financial security. She also testified about Mary’s confidence to her that Barrie asked her to engage in oral sex. The evidence showed Mary had returned to the O’Bannon home on the occasion when Barrie’s son Mike lost his leg in an industrial accident. Mary testified she did not have sexual relations with Barrie at that time, which was in July 1977. Barrie testified she did have sexual relations with him.

Judge Mobley observed all the witnesses, heard the testimony and weighed the evidence. He determined neither party was entitled to a divorce, thereby denying Mary O’Bannon’s prayer for divorce. After reviewing the transcript we do not find the Chancellor’s decision to be against the preponderance of the evidence. We therefore affirm the learned Chancellor’s finding that neither party is entitled to a divorce on the ground of recrimination and condonation. In Hoover v. Smith, 248 Ark. 443, 451 S.W. 2d 877 (1970), Justice Fogleman stated:

When the evidence is conflicting or evenly poised, or nearly so, the judgment of the judge who had the opportunity to see and hear the witnesses in evaluating the evidence is persuasive.

II & III

Points II and III will be treated together as they both question and concern ownership and disbursement of income from the property.

In March 1978, Judge Mobley, in response to a petition by Mary, ordered the appointment of a receiver to handle all the property of the parties, and to render an accounting to the Court outlining the assets and liabilities. Mary made several objections to the receiver’s accounting. The trial judge amended the accounting to reflect what he considered to be a just and equitable distribution to both parties.

Considerable property is involved in this lawsuit—his, hers, and theirs. Just which and how much is sharply disputed.

After a careful and painful study of the voluminous record, we find we must affirm the Chancellor’s determination with the following modifications.

One of the disputed items is a Buy and Sell Agreement for property termed as the “Misak Note”. This agreement named Barrie O’Bannon and Mary O’Bannon as seller. Mary O’Bannon relinquished her dower. The property was Barrie O’Bannon’s prior to the parties’ marriage. The Chancellor determined this asset to be the sole property of Barrie O’Bannon and released it to him. No income derived from this property has been received or credited to Mary. We find this to be error.

Ramsey v. Ramsey, 259 Ark. 16, 531 S.W. 2d 28 (1975) contains facts not unlike the case at hand. There a husband and wife held real property jointly. This property, along with machinery and cattle which were the sole property of the husband, were sold. Both a contract and a promissory note were executed. Upon divorce, the Chancellor had awarded the wife a one-half interest in that portion of the note which pertained to the land. In reversing the Chancellor’s decision, the Supreme Court stated the acquisition of personal property by persons who are husband and wife running to them conjunctively, without specification of the manner in which they take, results in a tenancy by the entirety. Although the machinery and cattle had been the sole property of the husband, her name as a payee on the note created a presumption of a gift from the husband to her. Therefore, one-half of the entire promissory note was awarded to the wife.

E. B. O’Bannon and Mary O’Bannon were listed as the seller on the Buy and Sell Agreement. The contract provides that the buyer will make monthly payments to the seller. As stated previously, the contract identifies the seller as E. B. O’Bannon and Mary O’Bannon. The purchase price was $65,000 of which $10,400 was a down payment. Monthly payments of $506.18 were to be made until the contract was fully paid. The seller further agreed to furnish a merchantable title to 'the buyer upon payment of the purchase price. The contract also stated:

Mary O’Bannon, wife of E. B. O’Bannon, hereby agrees to relinquish her dower interest and homestead, if any, in the above described real property, upon payment of the purchase price specified herein.

Although no promissory note was executed, we believe the agreement comes within the purview and intention as stated in Ramsey, supra. The Buy and Sell Agreement was executed with the expectation of payments being received for the real property. It was not necessary for a promissory note to accompany the contract in order to create a presumption of joint ownership of the purchase price.

We are not unaware of Raney v. Raney, 262 Ark. 747, 561 S.W. 2d 287 (1978). Raney, involved a claim to lease income. The husband, as one of four owners of commercial property, was one of four lessors of that property. The husband’s one-fourth interest was his sole property; the wife had no interest in the property. Both he and his wife, however, had signed the lease agreement. The Supreme Court stated the wife had no interest in the lease income. In Raney there was no sale of the land and there were no dower rights involved, but we do not find those facts satisfactorily distinguish it from Ramsey, supra, or from this case. We regard the Ramsey case as setting forth the established law of Arkansas, and do not consider the Raney decision as controlling. We hold the sale of land with payments to be made to Barrie and Mary as “seller” creates a presumption of gift of one-half of the payments from the sale to Mary.

We therefore find the “Misak Note” to be joint property, the income of which must be divided between the parties as of the date of separation.

The Chancellor determined the Heritage Shopping Center to be the sole property of Barrie. The evidence indicates Barrie owned this property prior to the parties’ marriage. This property, however, was mortgaged by the couple. Mary was a co-maker of the note even though she had no ownership in the property. The monthly payments were $1,536 payable to Commercial National Mortgage Company. Barrie O’Bannon paid off this note in August, 1977 using funds obtained from the liquidation of joint assets. From September, 1977 to March, 1978, Barrie O’Bannon continued to make a ledger entry in the amount of $1,536.00 to Commercial National Mortgage Company. In fact, the check was made out to Commericial National Bank. By Barrie O’Bannon’s own testimony, he travelled once a month to Little Rock from his home in Russellville to cash this check at Commercial National Bank. These checks, which were cashed and the proceeds pocketed by Barrie, were drawn from an account comprised of joint funds. Nowhere in the record do we find that Mary O’Bannon received a credit for one-half of this money. Therefore, we find Mary O’Bannon should be awarded $5,476.00 which represents one-half of the checks cashed from joint assets.

The temporary order, filed August 12, 1976, required Barrie to pay $1,500.00 to Mary, such amount not to be charged against her share of the joint assets. The record reflects this was not done. Therefore, we find Barrie must pay to Mary the sum of $750.00 which represents the amount charged against her share of the joint assets.

Affirmed as modified.