author: Neill Bohlinger, Associate Justice. Jim Johnson, Associate Justice,

text:
    Safferstone v. Tucker.
    5-2655
    357 S. W. 2d 3
    Opinion delivered May 14, 1962.

      U. A. Gentry, Julius G. Acchione and Harold L. King, for appellant.

      Mehaffy, Smith S Williams, by Herschel H. Friday, Jr., and Robert V. Light, for appellee.
   Neill Bohlinger, Associate Justice.

The school that is known as Bightsell School is located in the south central portion of Little Bock and is within the Little Bock School District.

The appellants in this case are property owners within the attendance area of the Bightsell School and the appellees are the officials of the Little Bock School Board. Serving the general attendance area of the Bightsell School, or adjacent thereto, are two other exclusively White elementary schools and two Negro elementary schools.

Prior to the institution of this suit, the appellees announced the intention of transferring the White pupils in the Bightsell School to adjacent White schools and moving 421 Negro pupils from two Negro schools to the Bightsell School. To prevent this transfer and change, the appellants brought an action in the Pulaski Chancery Court to restrain and enjoin the appellees from making that change. The principal allegation of the appellants is that the Board was guilty of an abuse of discretion in transferring the Bightsell pupils to other schools and converting what had always been an exclusively White school in an exclusively White residential district to a Negro school; that such ^action hy the School Board would be arbitrary, unreasonable, capricious, wrongful and discriminatory, and would result in great disadvantage to tbe White pupils being transferred and would result adversely on the property values within the area where the Board purposes to convert a White to a Negro school.

The cause was duly presented to the Pulaski Chancery Court which sustained the action of the Board and dismissed appellants’ complaint and from that action comes this appeal.

The law involved appears to be well settled. In this State a broad discretion is vested in the board of directors of each school district in the matter of directing the operation of the schools and a chancery court has no power to interfere with such boards in the exercise of that discretion unless there is a clear abuse of it and the burden is upon those charging such an abuse to prove it by clear and convincing evidence. White v. Jenkins, 213 Ark. 119, 209 S. W. 2d 457; Merritt v. Dermott Special School Dist., 188 Ark. 243, 65 S. W. 2d 33; Connelly v. Earl Frazier Sp. School Dist., 167 Ark. 49, 266 S. W. 929; Pugsley v. Sellmeyer, 158 Ark. 247, 250 S. W. 538; State v. School Dist. No. 16, 154 Ark. 176, 242 S. W. 545.

This declaration is in line with Ark. Stat. 80-509.

“The board of school directors of each district in the State shall be charged with the following powers and perform the following duties:
* # *
(b) Purchase buildings or rent school houses and sites therefor, and sell, rent, or exchange such sites or school houses. * * *
* * #
(m) Do all things necessary and lawful for the conduct of an efficient free public school or schools in the district.”

In a very recent case, Evans v. McKinley, 234 Ark. 465 [Law Rep. No. 11, Jan. 15, 1962] this court said:

“Under these [Ark. Stat. 80-509] and other powers, the School Directors conld, in good faith, reach the decision they did about the Star School [closing it]; and the evidence herein does not show that the School Directors acted in bad faith. In Pugsley v. Sellmeyer, 158 Ark. 247, 250 S. W. 538, we said: ‘ Courts will not interfere in matters of detail and government of schools, unless the officers refuse to perform a clear, plain duty, or unless they unreasonably and arbitrarily exercise the discretionary authority conferred upon them.’ ”

47 Am. Jur., Schools, § 44, p. 325, states it in this manner:

“The courts will not interfere with the exercise of discretion by school directors in manners confided by law to their judgment, unless there is a clear abuse of the discretion, or a violation of law. Every presumption is in favor of the proper exercise of power when its object is reasonably germane to the purpose of the grant. ’ ’

In White v. Jenkins, supra, this court said:

“It is well settled that courts may not intervene to control matters in the discretion of administrative bodies such as school boards, in the absence of a showing of an abuse of such discretion. Necessarily, some latitude in the exercise of this discretion must be given to these boards. They represent the people of the locality affected and naturally are closer to the problems to be solved than any court or other agency could be. 28 Am. Jur. 352, Connelly v. Earl Frazier Special School District, 167 Ark. 49, 266 S. W. 929; Pugsley v. Sellmeyer, 158 Ark. 247, 250 S. W. 538; 30 A. L. R. 1212; State v. Montgomery County Sp. School Dist. No. 16, 154 Ark. 176, 242 S. W. 545.”

The law therefore being clear on the authority of the school boards, the matter addresses itself to the question as to whether or not the action taken in this case was arbitrary, unreasonable, capricious, wrongful, discriminatory or oppressive. The question which presented itself to the school board was this: Rightsell School was constructed by the Little Bock School District as a White elementary school some 55 years before this controversy arose. At the time of the erection of the Bightsell School the area involved was an exclusively White area and the construction of the Bightsell School provided school facilities for 421 pupils and for many years the school cared for the educational primary requirements of all the White children within the area.

With the changing years we now find that there are registered in the Bightsell area 944 pupils, of which 300 are White and 644 are Colored. The adjacent schools of Parham and Centennial have approximately the same ratio of Negro to White residents. In the case of the Bightsell School, we have a plant designed for 420 pupils with but 300 White children eligible in the registered area. At the same time we have three adjacent Negro schools which were overcrowded at the time of the conversion. Therefore, we must assume that the Board weighed the problem that in one instance we have vacant classrooms in three White schools and 420 Negroes as an overflow from the Negro schools. Confronted with this problem, the appellees decided upon the conversion of Bightsell to an all Negro school.

Did that conversion place an undue hardship on the pupils attending Bightsell School? A careful perusal of the record in this case discloses that of the White children to be transferred, 50 will be closer to their newly assigned school, 240 will be about the same distance, and only 7 will be as far as 22 blocks from their new school. The plight of these 7 pupils is unfortunate but the added distance to their new school appears minimal when weighed in the scales of the congested condition of some Negro schools which retard not only the educational advantages for transferred Negroes but all the other Negro pupils in those schools.

The appellants state, however, that the matter could have been resolved with fewer dislocations had the School Board erected a new school for the Negroes. The proof shows that while the income of the Little Bock School District is impressive, there remains over as a surplus at the end of the year somewhere between nine and eleven thousand dollars which we assume is reserved for emergencies. One of the prime duties of a school board is to conserve the resources of the district and if the school board had elected to build a new school, it would have been confronted with the proposition that in three White schools there were available vacant classrooms which it was their duty to utilize in the best possible manner. It is true, as appellants point out, that the Board might have considered the conversion of the other two White schools that are most nearly adjacent to Rights ell, but it appears that this problem was thoroughly explored by the Board and discarded for the reason that the transferees, both White and Colored, would have greater distances to travel than is the case in the conversion of the Rightsell School. This conclusion appears logical.

Appellants contend and present credible testimony that this conversion will adversely affect the property values in the affected area. Be this damage what it may, it falls under the maxim of Damnum Absque Injuria. The function and duty of the School Board is not to maintain property values but to provide educational facilities for the children within the area. Assuming that property values will be adversely affected, the entire history of the City of Little Rock has been a history of repeated changes and each change has disrupted existing conditions and economic situations. It is true, as appellants state, that the area about this school is now and has always been a high-grade White residential section and the homes and buildings within that area have, since the erection of that school, reflected affluence and culture. They still do.

But the gracious and imposing homes and substantial business structures that rimmed the settlement at the landing at Little Rock many years ago were not sufficient to confine the needs of the population to that area and the stately and imposing schools and churches were not sufficient to still the growing pains of an expanding community. People migrate and populations shift in response to economic and other needs and when that migration starts, we bend bur efforts not to stopping the inevitable but we bend our facilities to caring for the newly created condition.

Such is the case before us. A shift in population has presented the problem that an area exclusively White 55 years ago can now muster but 300 White children out of a registration of 944.

The attitude of the appellants toward Rightsell is understandable. People tend to take a possessive attitude toward schools under those conditions and they think of their tax money going to the support of that school alone. That is not the case. The tax contribution of the Rightsell area goes to the support of all 29 schools that comprise the Little Rock School District and the Board must and has seen fit to view the district as a whole. The educational advantages of the 421 Negro pupils transferred are a part of the obligation of the appellees just as much as is the claim of any pupil in any registered area within the district.

We are unable to say that the appellees have been motivated by any impulse except to make available the pupils within the Little Rock School area the best school facilities possible under the circumstances.

Able counsel on both sides have been most helpful, but viewing their efforts with the record in this case we find nothing that justifies this court in overturning the decision of the chancellor.

The decree is, accordingly, affirmed.

Robinson, J., not participating.

Johnson, J., dissents.

Jim Johnson, Associate Justice,

(Dissenting). In the famous case of Olmstead v. United States, 277 U. S. 478, one of the dissenting opinions profoundly acknowledged the following truth:

“. . . The makers of our Constitution undertook to secure conditions favorable to the pursuit of happiness. They recognized the significance of man’s spiritual nature, of his feelings and of his intellect. They knew that only a part of the pain, pleasure and satisfactions of life are to be found in material things. They sought to protect Americans in their beliefs, their thoughts, their emotions and their sensations. They conferred, as against the Government, the right to be let alone — the most comprehensive of rights and the right most valued by civilized men.”

As I view the case at bar, appellants are only seeking to preserve their constitutional “right to be let alone. ’ ’ While maintaining this view, certainly I acknowledge as well settled law the school board’s discretionary powers in matters relating to school affairs, including the purchase and sale of school buildings, the assignment and transfer of students, the establishment in certain cases of separate schools for the White and Negro races. However, these powers are not absolute and are subject to judicial review and determination of whether the exercise of discretion has or has not been abused. In 79 C. J. S. “Schools and School Districts”, Section 420, pages 299-300, it is written:

“As in suits by tax payers to restrain the activities of school authorities, courts will not interfere with the discretionary powers of school authorities in the selection of a school site, or in the erection, or relocation or removal of a school building, unless they are guilty of fraud or an abuse of discretion.”

Viewing the entire case before us as a whole, I am convinced that the admitted and undisputed facts show that the Board by its action in converting the Rights ell Elementary School from White to Negro has abused its discretion. See Nicklaus v. Goodspeed, et al, (Oregon) 108 Pac. 135; Taylor v. Robertson, 16 Utah 330, 52 Pac. 1; Fisher et al, v. Birkey, et al, 307 Ill. 625, 139 N. E. 126,

In 47 Am. Jur., “Schools” § 19, p. 311, it is written, referring to school board’s discretion:

“Discretion being exercisable, certain limitations are, of course, imposed. Thus, the authority must act in good faith for the best interest of the people of the districts affected, upon just and equitable terms which do not cause unnecessary hardship. ’ ’

Who is it that can say that this is in the best interest of the people of the districts affected and upon just and equitable terms when the flagrant results of the board’s action shakes the stability of a steadfast community, destroys the property values therein, and compels its patrons to migrate elsewhere.

In Bledsoe v. McKeowen (1930) 181 Ark. 584, 26 S. W. 2d 900, this Court stated:

“The proper interpretation of the language used in the act is that the board may consolidate the proposed territory into a new district if, in the judgment of the board, it would be to the best interest of all parties residing in the district as a whole, meaning, of course, a substantial majority of all the parties residing in the territory. The exercise of a sound discretion on the part of the board in the organization or formation of a new district upon proper petition does not mean that the board may greatly inconvenience, oppress or outrage any parties residing in any part of the territory. The true interpretation of the statute is that the wishes and convenience of a substantial majority in the whole territory should be respected, if, in doing so, it would not greatly harm the other parties affected.”

It is undisputed that one of the members of the Board himself recognized that the Board’s action was discriminatory and not in the best interest of the people in the Rights ell area. The Board Member, Mr. Tucker, admitted that, if he were a property owner in the Right-sell area, he would be “mad as hell” about the conversion. What is it about the action of the Board that would prompt one of its members to volunteer the statement that he would be “mad as hell”? Why would he be “mad” and why to that extent? Could there be any other reason than the fact that he recognized that the board’s decision was obviously discriminating against these people? Could it be for any other reason than the fact that the Board’s action was prejudicial, oppressive and burdensome to the property owners and taxpayers of this community? How could he justify his decision to do something to other property owners and taxpayers that he would not want done to himself.

I submit that Mr. Tucker’s strong language is a concession that the school board in its unanimous decision to take this hallowed institution away from the White taxpayers and give it to the Negroes acted arbitrarily.

For these reasons and the further reason that I am convinced that if the facts were reversed and this was a case of the White patrons taking a school away from Negroes, the Federal Courts as presently constituted would not for an instant hesitate to grant to them the relief which is here by the majority being denied appellants. I respectfully dissent.


source: Caselaw Access Project

author: Neill Bohlinger, Associate Justice.

license: Public Domain

text:
    Smith v. Van Dusen, Adm’x.
    5-2682
    357 S. W. 2d 22
    Opinion delivered May 14, 1962.

      William G. Gilliam, for appellant.

      Joe W. McCoy and Cole & Scott, for appellee.
   Neill Bohlinger, Associate Justice.

Parties to this lawsuit reside in Hot Spring County. Roy M. Van Dusen died intestate suddenly on December 2, 1959.

For some years prior to his death it appears that Roy M. Van Dusen had enjoyed a close relationship, almost that of a congenial family, with Hester H. Smith and her sisters, Lewis Cooper Smith, Lethe E. Smith, Sherwood D. Smith, and her brother, Joe C. Smith. It further appears that Roy M. Van Dusen, over the years, had taken most of his meals with the Smith family and kept some of his important papers at their house.

On January 12, 1959, Roy Van Dusen borrowed $2,300.00 from Hester Smith and executed his note for that amount due and payable in one year with interest. On April 24, 1959, Van Dusen, doing business as the Ouachita Company, borrowed $700.00 from Hester Smith for which he executed his note payable in six months with interest. On June 30, 1959, Van Dusen, d/b/a the Ouachita Company, borrowed $4,500.00 from Joe Smith and executed his note therefor payable in one year with interest.

Van Dusen was the owner of lands in Ouachita and Hot Spring Counties and on February 13, 1959, Van Dusen executed two warranty deeds to part of his lands, the deeds purporting to convey title to Hester H. Smith. On June 30, 1959, the date on which Van Dusen borrowed $4,500.00 from Joe Smith, he executed to Hester Smith and Joe Smith his warranty deed conveying the Ouachita County lands. Joe Smith died August 4, 1959, and his will was duly probated and under that will Hester Smith was named as executrix. The will left the entire estate of Joe C. Smith to his sisters named above.

Within days after the death of Roy M. Van Dusen on December 2, 1959, Hester Smith filed the two deeds to the Ouachita lands for record and on December 8, 1959, she filed in the office of the recorder of Hot Spring County the deed which conveyed Van Dusen’s Hot Spring County land to Hester Smith.

On March 28,1960, Hester Smith, as executrix of the estate of Joe Smith, filed her inventory of the lands of the Joe C. Smith estate, which inventory did not list any of the lands described in the deed to Joe Smith by Van Dusen and thereafter, on May 11, 1960, Hester Smith, individually and as executrix of the Joe C. Smith estate, filed claims against the Roy M. Van Dusen estate on the notes executed by Van Dusen as above described. These claims were allowed and paid.

Lillian M. Van Dusen, as administratrix of the estate of Roy M. Van Dusen, applied for and obtained permission of the Hot Spring Probate Court to employ counsel to recover the lands covered by the deeds executed by Van Dusen to Hester Smith and Joe Smith. Some reference is made to the fact that in two of the deeds from Van Dusen to Hester Smith the name of Hester Smith as grantee appears to have been typed in by a typewriter other than the one used in the preparation of the deeds. We do not find it necessary to pursue that matter further.

The main question on which this case turns is: Was there such delivery of the deeds as would vest title in Hester H. and Joe C. Smith? The fact that one of the deeds was executed- on the very day that Van Dusen borrowed $4,500.00 from Joe C. Smith might lend credence to the theory that the deed was intended as an equitable mortgage. That fact, however, is without weight here because the proof shows that Hester Smith filed claims against the Van Dusen estate for all sums of money which Van Dusen had borrowed from the Smith family and those claims were paid in full.

Did the execution and delivery of the deeds from Van Dusen to Hester H. Smith and Joe C. Smith constitute a gift inter vivo si To constitute a valid gift inter vivos the donor must have been of sound mind, must have actually delivered the property to the donee and must have intended to pass the title immediately and the donee must have accepted the gift. Neal v. Neal, 194 Ark. 226, 106 S. W. 2d 595; Elrod v. Broom, 214 Ark. 548, 217 S. W. 2d 246; Carter v. Walker, 200 Ark. 465, 139 S. W. 2d 233; Krickerberg v. Hoff, 201 Ark. 63, 143 S. W. 2d 560; Bennett v. Miles, 212 Ark. 273, 205 S. W. 2d 451; Tucker v. Peacock, 216 Ark. 598, 227 S. W. 2d 929.

In Hunter v. Hunter, 216 Ark. 237, 224 S. W. 2d 804, it was said:

“This court has held that there is no delivery of a deed unless what is said and done by the grantor and grantee manifests their intention that the instrument shall at once become operative to pass the title to the land conveyed and that the grantor shall lose dominion over the deed. Maxwell v. Maxwell, 98 Ark. 466, 136 S. W. 172; Van Huss v. Wooten, 208 Ark. 332, 186 S. W. 2d 174.”

In the case of Cavett v. Pettigrew, 182 Ark. 806, 32 S. W. 2d 808, this court quoted the case of Battle v. Anders, 100 Ark. 427, 140 S. W. 593, as follows:

“The important question in determining whether there has been a delivery is the intent of the grantor that the instrument should pass out of his control and operate as a conveyance. The intent of the grantor is to be inferred from all the facts and circumstances adduced in the evidence. His acts and conduct are to be regarded in ascertaining his intent.”

In the case of Bray v. Bray, 132 Ark. 438, 201 S. W. 281, Chief Justice McCulloch, speaking for the court, succinctly stated the law as follows:

“* * * We have said that the question of delivery is generally one of intention as manifested by acts or words, and that there is no delivery unless there is an intention on the part of both of the actors in the transaction to deliver the deed in order to pass the title immediately to the land conveyed, and that the grantor shall lose dominion over the deed. Cribbs v. Walker, 74 Ark. 104; Maxwell v. Maxwell, 98 Ark. 466; Battle v. Anders, 100 Ark. 427.” [Emphasis supplied]

The facts in this case do not reflect that it was the intention to pass title immediately. There was a manual delivery of the deeds but thereafter Van Dusen continued to occupy the lands, build roads, sell timber therefrom and exercise all the other prerogatives of an unlimited ownership, including the payment of the taxes. Highlighting the intention of the parties to this transaction, there is the testimony of the appellant, Hester H. Smith, which is as follows:

“Q. Isn’t it a fact Mrs. [sic] Smith that all the time or from the time you first came, in possession of those deeds that you knew Roy Van Dusen had a right to go on that land and cut trees and build roads on it without your permission?
A. Yes, he did.
* # #
Q. He exercised all rights on that land until he died?
A. Yes.
Q. You never did take possession of it?
A. No.
Q. You mean he had possession of it for his life time?
A. Yes.
Q. You mean that deed was to take effect at his death?
A. Yes.”

Viewing all of the facts in the light of the pronouncement in the Bray case cited supra we have here an instance in which “one of the actors of the transaction” states positively that there was no intention to pass title immediately to the land conveyed. The manual transfer of the deed itself is not sufficient. The intention to transfer title immediately must be present in both of the parties to the transaction, not just one of them but both of them, and here one of the parties who in testifying against interest stated that the intention to immediately vest title was not present.

It is noted that this action was commenced by Lillian Van Dusen as administratrix of the estate of Roy M. Van Dusen, deceased. In the recent case of Calmese v. Weinstein, opinion delivered November 27, 1961, Law Rep. 234, No. 6, [234 Ark. 237], we cited the case of Dean v. Brown, 216 Ark. 761, 227 S. W. 2d 623:

“Our statute provides that immediately upon the intestate’s death, the title to real estate descends to the heirs at law, subject to the widow’s dower and the payment of debts. See § 61-101 Ark. Stats. 1947. The two sections (§ 62-411 and § 62-911, Ark. Stats. 1947), concerning lands as assets in the hands of the administrator, have been uniformly construed to mean that the title to the lands passes direct to the heirs on the death of the intestate, subject to the rights of the administrator to have the Probate Court sell the lands if such be necessary to pay the debts of the deceased. [Footnote and citations omitted. Emphasis added.] ”

This is in line with our uniform holdings on the relationship of the administratrix to the lands of the intestate. Our findings in that particular have no bearing here because the probate court had directed the administratrix to bring the action. We do know there were debts against the estate and it is possible that the probate court viewed the lands as being perhaps necessary for the payment of debts.

The chancellor found that there was no delivery that would vest title and in that he was correct. We agree with his conclusion and affirm this case.


author: George Rose Smith, J.,

text:
    William D. Watkins, et al., v. A. W. Johnson, et al.

    5-2624
    356 S. W. 2d 655
    Supplemental opinion on rehearing delivered May 14, 1962.
    [Original opinion delivered April 2, 1962, 234 Ark. 929]
   George Rose Smith, J.,

on rehearing. In a petition for rehearing the appellees earnestly contend that we erred in holding that the second count in the appellants’ complaint is not subject to demurrer. It is insisted that our present conclusion is contrary to the decision in Ulrich v. Coleman, 218 Ark. 236, 235 S. W. 2d 868, where we held that a cotenant’s purported conveyance of the entire title, followed by the grantee’s entry into open and exclusive possession of the land, amounts to a disseisin that will ripen into title if continued for the statutory period.

Here the allegations of the complaint, construed liberally on demurrer, do not describe a situation falling within the doctrine of the Ulrich case. This complaint does allege that Johnson conveyed the land to his son in 1943 and that the grantee took possession, but there is no statement whatever that the occupancy was continuously adverse for seven years. All that the appellees are relying upon is a statement and prayer that the defendants should be required to account for rents and profits received since 1905. There is no assertion that the lands were continuously rented for seven years or for any other period of time. To sustain this argument we should have to hold that a plaintiff who demands an accounting of any rents and profits that may have been received thereby pleads himself out of court by having affirmatively conceded the existence of adverse possession for the entire period in issue. Such a holding would plainly be contrary to the rule that on demurrer doubts are to be resolved in favor of the pleader, not. against him.

Rehearing denied.


author: Carleton Harris, Chief Justice.

text:
    Reed v. Cunningham, Chancellor.
    5-2609
    357 S. W. 2d 261
    Opinion delivered May 21, 1962.

      Kaneaster Hodges, for appellant.

      Fred M. Pickens, Jr., for appellee.
   Carleton Harris, Chief Justice.

This is a petition for a writ of prohibition wherein we are asked to direct the Chancellor of the 8th Chancery District to refrain from a trial of a cause now docketed in his court, and to retransfer the cause to the Jackson Circuit Court. On February 2, 1959, C. W. Reed filed an action in unlawful detainer against O. D. Mitts in the Jackson Circuit Court. A bond was filed by Reed for the purpose of obtaining immediate possession. Mitts filed a cross-bond, but his sureties subsequently withdrew, and possession of the premises passed to Reed. Mitts did not, and has not, to the date of this proceeding, filed a pleading of any nature. The Circuit Court docket sheet reflects that on February 26,1959, Mitts was granted an extension of ten days; on May 8, 1959, the case was set for jury trial, and on May 29, 1959, the Jackson Circuit Court entered the following order:

“Now on this 29th day of May, 1959, being a pretrial day of Jackson County Circuit Court, this cause comes on to be heard on the regular call of the docket, with the plaintiff appearing by his attorney, and with the defendant appearing by his attorney, after hearing each side in this cause of action finds that this cause is in equity.
IT IS THEREFORE BY THE COURT CONSIDERED, ORDERED AND ADJUDGED that this cause of action be transferred to the Jackson County Chancery Court.

The chancery docket sheet reflects that the cause was set for trial in that court by agreement, for September 25, 1959; on that date, it was set for October 27,1959; at that time it was reset for November 24,1959. On this late date, it was reset for a day in January, and on January 26, 1960, a motion was made to transfer the case back to Circuit Court. On April 8th, the motion was denied. In the meantime, on November 4, 1959, the discovery deposition of Arthur Damouth was taken.

Petitioner seeks the writ of prohibition, contending that the only pleading in the case is the complaint, wherein the landlord seeks possession of his premises from the tenant, and that this is a legal action not cognizable in equity. We do not agree that prohibition will lie under the facts herein set out. The order, heretofore quoted, reflects that counsel for both parties appeared in the Jackson Circuit Court, and a hearing was conducted, after which the court transferred the cause to the Chancery Court. We, of course, do not know what facts were developed at this hearing, but the then counsel for petitioner was certainly aware of the nature of the defense and the basis for the court’s action. The chancery docket reflects that the cause was set in that court for hearing by agreement. In fact, the record does not reflect any objection to either the order transferring the cause from circuit to chancery, or the Chancellor’s order refusing to transfer the cause back to the circuit court. In Green v. Garrett, 225 Ark. 311, 280 S. W. 2d 905, this Court said:

“The plaintiffs’ lack of possession does not involve a complete absence of judicial power over the subject matter, as would be true if a chancery court attempted to try a criminal case or to probate a will.- Instead, the present objection goes merely to the adequacy of the remedy at law and is waived if not timely interposed.”

In Reynolds v. Balding, 183 Ark. 397, 36 S. W. 2d 402:

“It is next-insisted that the defendant, Marshall B. Reynolds, had possession of the land, and that the chancery court had no jurisdiction of the case. The record shows that the case was first brought in the chancery court and then transferred to the circuit court. Subsequently, the case was retransferred without objection by the circuit court to the chancery court. Hence, under our settled rules of practice, the chancery court had jurisdiction to try the case, and any objections to the jurisdiction of the chancery court were waived by the failure to object at the time and to save exceptions to the action of the court. ”

In Richards v. Maner, Judge, 219 Ark. 112, 240 S. W. 2d 6, in quoting from an earlier case, we said:

“ ‘The writ is never issued to prohibit an inferior court from erroneously exercising its jurisdiction, but only where the inferior tribunal is wholly without jurisdiction, or is proposing or threatening to act in excess of its jurisdiction. To illustrate':' The circuit judge certainly had jurisdiction to pass upon the motion to transfer to equity the case pending in its court. If it erroneously transferred the case to equity, prohibition is not the remedy. It can be corrected only on appeal.’ We then want on to point out that the party objecting to the transfer should have saved.his objection',and-preserved bis point .for.. consideration by this court on appeal from the trial court’s final judgment;’’

The question of defendant’s failure to file an answer is a matter that can properly be presented on appeal; in fact, we find nothing in the entire record thqt indicates petitioner’s remedy by appeal to be inadequate.,

"Writ denied.

       The lawyer appearing for Reed was not the same attorney who presently represents petitioner. Reed’s first attorney withdrew from participation in the case, the second attorney died, and present counsel did not enter the case until all the court proceedings, mentioned in this opinion, had already taken place.


text:
    Ark. Commerce Comm. v. Ark. & Ozarks Rwy. Co.
    5-2709
    357 S. W. 2d 295
    Opinion delivered May 21, 1962.

      J. Frank Holt, Attorney General, by Russell G. Morton, Asst. Att. Gen’l.; Harry E. McDermott, Jr., for appellant.

      Warren & Bullion, for appellee.
   Carleton Harris, Chief Justice.

This appeal involves the constitutionality of Act 62 of the Acts of 1961. The Arkansas & Ozarks Railway Corporation, in June, 1960, sought a certificate of public convenience and necessity from the Interstate Commerce Commission to abandon its railroad line, which operates from Seligman, Missouri, to Harrison, Arkansas. Service and operations on the railroad had been discontinued in May, 1960, as a result of flooding, which rendered impassable appellee’s trackage and certain bridges in what is known as the Leatherwood Creek area. Following a lengthy hearing, the hearing examiner for the Commission issued his intermediate report authorizing the abandonment of the road. In February, 1961, the General Assembly passed Act 62, levying a “removal” tax against “any railroad company seeking to abandon its entire line, or a major portion thereof, and seeking to sell its properties.”

The constitutionality of the Act was attacked by complaint in the Pulaski Chancery Court (2nd Division), wherein it was alleged that said act was unconstitutional and void because:

“(1) It is confiscatory and amounts to a public taking of private property without just and adequate compensation contrary to Amendment 14 of the Constitution of the United States; (2) It is an unlawful, unwarranted and unconstitutional classification of taxpayers contrary to Amendment 14 of the Constitution of the United States and of Amendment 14 of the Constitution of the State of Arkansas; (3) It constitutes a burden upon interstate commerce conflicting with the commerce clause of the United States; (4) It denies the equality before the laws guaranteed by the Constitution of the State of Arkansas; (5) It is not equal and uniform, and is arbitrary and capricious contrary to the provisions of both the Constitution of the United States and of Arkansas; (6) It is a local and special law specifically forbidden by Amendment 14 of the Constitution of the State of Arkansas.”

Defendants (appellants herein) were the Arkansas Commerce Commission, the Commissioners thereof, the State Treasurer, and the Attorney General. After the filing of demurrers, which were overruled, and an answer, the cause proceeded to trial, and after the taking of evidence, the court entered its decree finding that Act 62 was unconstitutional and void, and appellants were restrained and enjoined from enforcing or attempting to enforce said act. From the decree so entered, appellants bring this appeal.

A resume of the provisions of the act, and the circumstances attending its passage, is first in order. The act is composed of eight sections and an emergency clause. Section one authorizes the State Highway Department to construct and improve those portions of the highway system adversely affected hy the cessation of operation of railroads previously available. Section two levies a removal tax against any railroad company seeking to abandon its line or a major portion thereof; the act purportedly levied the tax for the purpose of obtaining a portion of the necessary funds required for the maintenance of highways which will carry the extra burden of traffic. The removal tax is set at $20 per ton on scrap rail; $25 per ton on re-roll rail; $30 per ton on re-lay rail; $20 per ton on scrap frogs, switches, switch stands, guard rails, MT scrap fastenings, angle bars, bolts, spikes, scrap bridges, steel; 25% of the gross salvage value of equipment such as locomotives, turn tables, generators, cabooses, depots, round houses, and all other personal property. Section four provides that any railway company seeking to abandon rail service and remove such personal properties “shall, within seven (7) days from the passage of this Act, notify in writing the Arkansas Commerce Commission of its desire and intentions, and it shall furnish said Commerce Commission a complete inventory of its properties.” This section sets forth that any expenses of the Commission for a survey and appraisal shall be borne by the railway company, and further provides that before any of the taxable assets are sold or removed, “such railroad shall pay over to the Treasurer of the State of Arkansas the full amount of removal taxes due as found by the Commerce Commission, and obtain written clearance from said Commission authorizing removal of said property.” Section 5 provides certain exemptions to the act which will be hereinafter more fully discussed. Section six is the severance clause; section seven provides penalties for violation; section eight repeals laws in conflict, and section nine declares an emergency.

According to. the evidence, the Arkansas & Ozark Railroad operated from Seligman, Missouri, to Harrison, Arkansas, a distance of approximately 70 miles, 62 miles of which were in this state. The evidence reflected that the revenue of the railroad had decreased almost from the time appellee commenced operations. The United States government, under the authority of the Water Power Act, instituted proceedings in the United States District Court to condemn approximately 2.8 miles of the railroad near Beaver, Arkansas, and the area was subsequently flooded. According to appellee, this action, which severed the line, was the immediate cause of the petition for abandonment, and there was testimony that the cost of relocating the tracks was prohibitive. Further damage to the trackage and bridges was occasioned by the severe flood in May, 1961. This, then, is the background of the instant litigation.

Appellants question the jurisdiction of the Pulaski Chancery Court to determine the constitutionality of Act 62; contend that the proper parties were not before the court, and assert that no overt acts had been committed which would call for enforcement of the provisions of the statute, i. e., appellee had not notified the Commerce Commission of any intention to remove the railroad, nor asked for any written permission to remove. Accordingly, it is contended that appellee had not exhausted its administrative remedy. We find no merit in this contention. Under the authority of the State Constitution, Article 16, Section 13, any citizen of a county, city, or town, may institute suit to prohibit the enforcement of illegal exactions. In Commissioner of Revenue v. Dillard’s, Inc., 224 Ark. 826, 276 S. W. 2d 424, we upheld the right of the appellee to seek an injunction against the collection of a tax alleged to be illegal. In McCarroll, Commissioner of Revenue v. Gregory-Robinson-Speas, Inc., 198 Ark. 235, 129 S. W. 2d 254, the court said:

“We are of the opinion, therefore, that an individual has the right to go into a court of equity to enjoin the enforcement of any illegal tax or exaction and that this same right inures to the corporation, appellee, in the instant case, since a corporation is a person within the meaning of the equal protection and due process clauses of the Fourteenth Amendment to the Constitution of the United States.”

The Commerce Commission is charged with appraising the properties and issuing the clearance, and the removal tax must he paid to the State Treasurer. Since these are the only parties directly involved in the collection of the tax, it follows that the necessary parties are before the court.

The act is patently unconstitutional, probably on at least three different grounds, but we will discuss only one phase of the statute which shows it clearly to be both arbitrary, and special legislation. Section five reads as follows:

“SECTION 5. Exemptions. This Act shall apply to all railroad properties in Arkansas, except short feeder lines which have outlived the purpose for which they were built; and except railroads which operate more than one hundred miles of main lines in Arkansas and all subsidiary lines of any such railroad; and except railroads and railway companies whose main line tracks in the State of Arkansas are less than fifty (50) miles in length. ’ ’

The evidence reflects, as previously stated, that Arkansas & Ozarks has 62 miles of track in this state, and this is the only railroad in this state which has more than fifty miles, and less than one hundred miles, of main line tracks. The practical effect of the statute is the same as though the legislature had provided that the Arkansas & Ozarks Bailway alone would be subject to its provisions. In determining the classification arbitrary, and therefore a violation of the Fourteenth Amendment to the Constitution of the United States, we think it apparent that the ground of difference upon which the discrimination is based, vis., length of line, has no fair or substantial relationship to the stated object sought to be accomplished by the legislation. Ceratinly, if the abandonment of a railroad line will require the state to provide additional highways for public transportation purposes, it logically follows that the abandonment of a railroad operating more than one hundred miles of track will impose a greater burden on the state’s highway facilities than the abandonment of a railroad which operates less than a hundred miles of track. As stated by appellee in its brief :

“In the present case there is no reasonable relation to the classification made and the objects of the legislation. A 62 mile railroad’s abandonment will work no more hardship on the highways than the abandonment of a 162 mile railroad. Indeed the volume of traffic will be greater in the latter instance. Is it in any way reasonable to assume that the abandonment of the A & 0 operations will place more freight on the highways of the state than the abandonment of the Missouri-Pacific or the Rock Island? Such an assumption would be ridiculous.”

In Royster Guano Co. v. Commonwealth of Virgina, 253 U. S. 412, a state law which taxed all the income of local corporations from business done outside the state and business done within it, while exempting entirely the income derived from business outside the state by local corporations which did no local business, was held arbitrary and violative of the equal protection clause of the Fourteenth Amendment. The Court said:

“It is unnecessary to say that the ‘equal protection of the laws ’ required by the Fourteenth Amendment does not prevent the States from resorting to classification for the purposes of legislation. Numerous and familiar decisions of this court establish that they have a wide range of discretion in that regard. But the classification must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike. The latitude of discretion is notably wide in the classification of property for purposes of taxation and the granting of partial or total exemptions upon grounds of policy (citing cases). Nevertheless, a discriminatory tax law cannot be sustained against the complaint of a party aggrieved if the classification appears to be altogether illusory. ’ ’

In Quaker City Cab Company v. Commonwealth of Pennsylvania, 277 U. S. 389, the constitutionality of a Pennsylvania statute was at issue. This particular statute levied a tax on the gross receipts derived by foreign or domestic corporations from the operation of taxi cabs in intrastate transportation of passengers, but did not tax like receipts of individuals and partnerships in the same kind of business. In holding that the statute was unconstitutional, the court said:

“The equal protection clause does not detract from the right of the State justly to exert its taxing power or prevent it from adjusting its legislation to differences in situation or forbid classification in that connection, ‘but it does require that the classification be not arbitrary but based on a real and substantial difference having a reasonable relation to the subject of the particular legislation.’ ”

See also Louisville Gas Company v. Coleman, 277 U. S. 32. In Rebsamen Motor Company v. Phillips, 226 Ark. 146, 289 S. W. 2d 170, this Court said:

“In reading and considering this act in its entirety it is readily apparent that its purposes and effect, and under its terms, appellant, along with his salesmen and other franchised dealers and their salesmen, were regulated and required to pay a license fee for the privilege of engaging in the business of selling new and unused motor vehicles and on failure to pay the tax to be subject to prosecution on a misdemeanor charge, while their competitors in the same community, who are not franchised, but who may deal in both new and used cars, along with their salesmen, were not regulated or required to pay the license fee and could operate without penalty, even through they were engaged in the same business. To hold that under its police power the legislature could enact such legislation, exempting from the tax automobile dealers engaged in new and used cars from paying the license fee, and at the same time requiring franchised dealers in the same community, who deal only in new and unused cars to pay the tax, is clearly, we think, an arbitrary classification and in conflict with Section 18 Article 2 of the Constitution of the State of Arkansas which provides that: ‘ The general Assembly shall not grant to any citizen or class of citizens privileges or immunities which upon the same terms shall not equally belong to all citizens. ’ It also contravenes the Fourteenth Amendment to the Constitution of the United States which prohibits a state from denying to ‘ any person within its jurisdiction the equal protection of the laws.’ ”

Likewise, the same section is violative of Article Fourteen to the Arkansas Constitution, which prohibits the General Assembly from passing any local or special act. In Ark.-Ash Lumber Co. v. Pride & Fairley, 162 Ark. 235, 258 S. W. 335, this Court said:

“The rule announced by nearly all of the authorities is that, in a judicial determination of the question as to the nature of a statute, whether general or special, the inquiry is not restricted to the form of the statute, but it reaches to a consideration of the necessary effect of the statute, regardless of its form.”

As already stated, this legislation will only affect the one railroad, and we think it obvious that it was only intended to affect one railroad. This is even shown by the language of Section four, which, provides:

“Any railway company heretofore abandoning rail service or seeking to abandon rail service and to sell and remove from service such personal properties mentioned herein shall, within seven (7) days from the passage of this act notify in writing the Arkansas Commerce Commission of its desire and intentions and it shall furnish said Commerce Commission a complete inventory of its properties. * * *”

Of course,. there was only the one railroad (appellee herein) which, at that time, was seeking to abandon rail service, and which, in fact, had already ceased operations. It alone was subject to the provision requiring a notice within seven days from the passage of the act. Appellant asserts:

“. . . it should be noted that Section 6 of the Act provides that if any clause, sentence, section or provision or any part of this Act shall be adjudged to be unconstitutional or invalid for any reason by any court, the judgment shall not impair, affect or invalidate the remainder of the Act which shall remain in full force and full effect. In other words, if any part of the classification provided for in Section 5 of the Act is declared unconstitutional for any reason, then only that classification or exception should be deleted from the Act. This would not invalidate the Act as it applies to Arkansas & Ozark Railway since, under these circumstances, it would apply to all other railroads.”

This reasoning is erroneous. As stated in 82 C. J. S., § 93, subsection (c), page 160:

“Where, by striking a void exception, proviso, or other restrictive clause, the remainder will be given a broader scope as to subject or territory than that intended by the legislature, the whole act is void; . . .” Of course, by striking section five of the act, the statute is considerably broadened and the result would be an act applying to all railroads, whatever the amount of track-age, rather than railroads with main line trackage between fifty and one hundred miles in length. This would amount to judicial legislation, which is no part of our duty. Furthermore, it cannot be presumed that the legislature would have passed Act 62 without the provisions of section five, and such a presumption is essential to the validity of the remainder of the Act. Replogle v. Little Roch, 166 Ark. 617, 267 S. W. 353.

For the reasons heretofore enumerated, it appears that the act had a single object — to prevent solely the Arkansas & Ozarks Bailway from removing its properties. It was not the purpose of the act to prevent all railroads from removing trackage. The invalidity of section five therefore invalidates the entire statute.

The decree of the Chancery Court is affirmed.

Bohlinger, J., not participating.

         In 1955 the loss was $14,694.00; in 1956 it was $32,361.00; in 1957 it was $41,703.00; in 1958 it was $59,626.00; and in 1959 it was $56,-937.00. For the first six months of 1960 it was $30,226.00.


author: Ed. F. McFaddin, Associate Justice.

text:
    Elliott v. Paul.
    5-2691
    357 S. W. 2d 292
    Opinion delivered May 21, 1962.

      Moses, McClellan, Arnold, Owen & McDermott, by Wayne W. Owen, for appellant.

      Joe W. McCoy and Cole S Scott, for appellee.
   Ed. F. McFaddin, Associate Justice.

There was a traffic mishap at a street intersection between vehicles driven by appellee (plaintiff) and appellant (defendant), and this litigation ensued. Trial to a jury resulted in a verdict and judgment for Appellee Paul for $10,000.00. The property damage was only claimed to be $218.00; and the personal injuries account for the remaining amount. On appeal, Elliott urges two points: one relating to the refusal of the Court to declare a mistrial after an insurance company had been naentioned by name on voir dire; and the other relating to the refusal of the Court to admit certain proffered evidence.

I. Refusal To Declare A Mistrial After An Insurance Company Had Been Named. On voir dire, the attorney for Mr. Paul, the plaintiff, asked the jurors, inter alia:

‘ ‘ ME. COLE: ... Is there anyone on the prospective panel who owns any stock in the People’s Indemnity Insurance Company!
“ (At this time one member of the prospective panel, Mr. Tindel, answered in the affirmative.)
“ME. COLE: Would the fact that you own stock in that company, Mr. Tindle, affect your decision in any way in this case?
“Mr. Tindle: No, I don’t think so.”

After a number of other questions on voir dire, this occurred:

“ME. COLE: ... Do any of you know Mr. Louis Logan with the People’s Indemnity Insurance Company?
“MR. OWEN: Now, if it please the Court we object and ask the Court for a mis-trial at this time.”

In chambers, the attorney for the plaintiff offered to show that the People’s Indemnity Insurance Company had insured Mr. Elliott, and that Mr. Louis Logan was the Claims Officer for the People’s Indemnity Insurance Company and had been in Malvern making his investigation, to all of which the Court remarked:

“Here’s the weakness. If you had asked whether anybody knew the man without associating him with the People’s Indemnity Insurance Company, but here’s the second time you have injected People’s Indemnity Insurance Company into it. The first time there was no objection, and I think it was error there, but there was no objection.”

Notwithstanding the foregoing, the Court refused to declare a mistrial; and we conclude that a mistrial should have been declared.

The mere fact that the attorney for the plaintiff had previously mentioned the People’s Indemnity Insurance Company and there had been no objection — such fact— did not give the plaintiff’s attorney carte blanche to continue to refer to a named insurance company. This matter of permitting questions on voir dire relative to insurance companies has given us trouble for many years; but in DeLong v. Green, 229 Ark. 100, 313 S. W. 2d 370— which came from the same Circuit Court as the present appeal- — we enunciated certain rules as to how far an attorney could go on voir dire. After discussing our previous cases, we stated:

“We could, of course, end our discussion at this point, leaving for future determination a host of minute and finely drawn distinctions that would undoubtedly be urged in later eases. The bench and bar, however, are entitled to an expression of our views, especially if that course may reduce an area of uncertainty'and thereby avoid needless appellate litigation. We therefore think it best to announce our preference for the procedure that is at once the simplest to follow and the fairest to both sides in the lawsuit: Questions about the veniremen’s insurance connections should refer only to insurance companies in general; a particular company should not be named when the information wanted can just as well be obtained by the use of general questions.”

In the case at bar, the plaintiff could have asked if anyone knew Mr. Louis Logan, without associating him with the People’s Indemnity Insurance Company, but the question as asked is in direct violation of our statements in DeLong v. Green, supra; and we must therefore reverse the case because of the question asked and the refusal of the Court to declare a mistrial on request.

In cases since Delong v. Green, supra, we have adhered to the rule announced therein. For instance, in Morgan v. Daniels, 229 Ark. 811, 318 S. W. 2d 823, an insurance company had been named and we said:

“. . . under our holding in DeLong v. Green, 229 Ark. 100, 313 S. W. 2d 370, such a statement by the court, if properly objected to by appellee, would have necessitated a reversal, had appellant obtained a judgment.”

Again, in Malone v. Riley, 230 Ark. 238, 321 S. W. 2d 743, the Court had allowed the attorney for the appellant to ask the jurors on voir dire if any of them were working for or had relatives working for the Travelers Insurance Company. Of that we said:

“The naming of the Travelers Insurance Company in the voir dire examination was more than Malone’s attorneys were entitled to. The situation in the case at bar is entirely similar to that in Morgan v. Daniels, supra; and that case is ruling here. ’ ’

In short, there is no way to reconcile the questions asked on voir dire in the case at bar, about the People’s Indemnity Insurance Company, with our holding in DeLong v. Green, supra. We cannot say that the refusal to declare a mistrial was harmless error. St. L. I. M. & So. Ry. v. Steed, 105 Ark. 205, 151 S. W. 257. The error was not waived by the failure of the appellant to object the first time the insurance company was named. Absence of objection to the commission of one error does not justify a party to persist in committing the same error. We adhere to our statements in DeLong v. Green and reverse the judgment for failure to observe the rule of that ease.

II. Refusal To Admit Proffered Evidence. Because of the likelihood of a new trial, it is proper that we discuss this point also. Mr. Paul, the plaintiff, testified as to the nature and extent of the injuries he claimed to have received in the traffic mishap with Mr. Elliott. On cross examination, Elliott’s attorney sought to show that several years ago Mr. Paul had been involved in a traffic collision in Texas and had sued in the District Court of Shelby County, Texas and recovered damages. Mr. Elliott’s attorney sought to introduce a duly certified copy of the complaint filed by Mr. Paul’s attorney in the Texas case. The complaint was duly authenticated as required by the Federal statutes, U. S. C. A. Tit. 28 § 1738. However, the Hot Spring Circuit Court, in the present case, refused to allow the complaint in the Texas case to be admitted in evidence. In this ruling the Trial Court was correct under our holding in Mo. Pac. v. Zolliecoffer, 209 Ark. 559, 191 S. W. 2d 587. The Federal statute prescribing authentication of records and judicial proceedings is to make the copies as admissible as would have been the originals, and to assure the court in which the copies are offered in evidence that they are, in fact, authentic; but this does not mean that such copies must be admitted if they are inadmissible for reasons other than authenticity. The pleading here offered was not admissible because it was not signed by Mr. Paul or verified by him. It was a complaint signed by Mr. Paul’s attorney; and Mr. Paul stated that he did not authorize the making of the statements therein concerning his injuries. Our holding in Mo. Pac. v. Zolliecoffer, supra, is ruling here. It is not a question of denying full faith and credit to the records of a court of a Sister State: the complaint was not admissible because it was not signed or agreed to by the witness here sought to be impeached. We hold that the Trial Court was correct in its ruling on this pleading.

After the Court refused to admit the complaint in the Texas case, Mr. Elliott’s attorney went a step further and offered in evidence a copy of the judgment rendered in favor of Mr. Paul, his wife, and children, in the District Court of Shelby County, Texas; and this judgment was likewise duly verified and authenticated in compliance with the Federal statute. The Trial Court ruled the judgment to be inadmissible; and in this ruling we find no error because the only purpose the judgment would have served would have been an attempt to impeach Mr. Paul on a collateral matter. Mr. Paul stated that he and his wife and children were involved in a traffic mishap in Shelby County, Texas about thirteen years prior to the accident here involved and that a consent judgment had been rendered in that case. Mr. Paul said that he had received $500.00, that each of the children had received $500.00, and that the balance of the amount recovered had been for injuries sustained by Mrs. Paul. We have carefully examined the certified copy of the judgment offered in evidence and it recites that a certain amount of money was to be paid to “Leonard D. Paul and Iona Paul, his wife”; and Mr. Paul stated that under the law of Texas he was a necessary party for the recovery by his wife for her injuries. To have allowed the judgment to have been introduced would merely have constituted an attempt to impeach Mr. Paul on a collateral matter. See 58 Am. Jur. 433, “Witnesses” § 785 et seq.

For the error in refusing to declare a mistrial because of the mention of a named insurance company, the judgment is reversed and the cause is remanded.

Robinson, J., dissents as to reversal.


author: Geoege Rose Smith, J.

text:
    Hall v. Pittman Constr. Co.
    5-2704
    357 S. W. 2d 263
    Opinion delivered May 21, 1962.

      Virgil Ramsey and Paul Jameson, for appellant.

      Crouch, Blair & Cypert, for appellee.
   Geoege Rose Smith, J.

This is a workmen’s compensation claim filed by the appellant for total disability assertedly resulting from his having fallen from a tractor on October 27,1959. The commission denied the claim on the ground that the claimant had not met the burden of proving that his disability, which manifested itself in January of 1961, was attributable to the accident that had occurred fifteen months earlier. The circuit court upheld the commission’s decision.

According to the medical testimony the tractor accident aggravated an existing degenerative condition in the disc between two of the vertebrae in Hall’s neck. The injury, however, was not disabling until about a month later, when Hall first consulted Dr. Patrick. This physician placed his patient in a hospital on November 29, 1959, where he remained for five days under the care of Dr. Kaylor, an orthopedic specialist. Upon leaving the hospital Hall soon returned to his job as a tractor operator and continued in that work until sometime during the summer of 1960. In May of that year Hall was treated by Dr. Patrick for a back condition, but there is no indication in the medical record that the claimant was then complaining of any suffering in the region of his neck.

After leaving the appellee’s employment in August of 1960 Hall appears to have engaged in light work of one kind or another until the condition of his neck became disabling in January of 1961. He was again treated by Dr. Patrick and Dr. Kaylor, both of whom gave evidence in the case. The referee, whose opinion was adopted by the commission, found the medical testimony to be inconclusive and rather pointedly rejected Hall’s testimony on the ground that his credibility had been almost completely destroyed.

Under the substantial evidence rule that prevails in a case of this kind the appellant shoulders a heavy burden in seeking a reversal of the commission’s decision upon an issue of fact. In order to succeed the appellant must show that the proof is so nearly undisputed that fair-mined men could not reach the conclusion arrived at by the commission. After studying the record we are unable to say that the appellant is entitled to a reversal; that is, that there is no substantial evidence to support the commission’s findings.

Cases such as this one present problems that gradually and almost imperceptibly progress from issues of law to issues of fact. ■ If the claimant’s disability arises soon after the accident and is logically attributable to it, with nothing to suggest any other explanation for the employee’s condition, we may say without hesitation that there is no substantial evidence to sustain the commission’s refusal to make an award. Clark v. Ottenheimer Bros., 229 Ark. 383, 314 S. W. 2d 497. But if the disability does not manifest itself until many months after the accident, so that reasonable men might disagree about the existence of a causal connection between the accident and the disability, the issue becomes one of fact upon which the commission’s conclusion is controlling. Kivett v. Redmond Co., 234 Ark. 855, 355 S. W. 2d 172.

The case at bar falls in the latter category. A period of fifteen months intervened between the tractor accident in October of 1959 and the onset of total disability in January of 1961. Dr. Patrick was unable to say with confidence that Hall’s disability was related to the tractor accident; he recognized the possibility that the original condition could have been aggravated at any time by a subsequent incident. Dr. Kaylor, the claimant’s other physician, had this to say: “There is some possibility of aggravation of his arthritic condition in his neck as the result of the accident in November or late October, 1959. I cannot, with any degree of certainty, establish any rating of disability by reason of this injury and aggravation.” The law does not imperatively compel the members of the commission to be even more certain than the witnesses in the case.

Thus the medical testimony created an issue of fact. This uncertainty was not dispelled by the claimant’s testimony, which was considered to be of little value. Hall originally asserted a claim for total disability during the first three months following the tractor accident, but eventually it was shown pretty clearly not only that Hall was actually working during that period but also that he was fraudulently obtaining unemployment compensation benefits at the same time. In view of all the circumstances we cannot say that the commission was bound to conclude that Hall’s disability was caused by the tractor accident some fifteen months earlier.

Affirmed.

Robinson, J., dissent's.


author: George Rose Smith, J.

text:
    Hink v. Board of Directors of Beaver Water District.
    5-2794
    357 S. W. 2d 271
    Opinion delivered May 21, 1962.

      Jeff R. Rice and Walter R. Niblock, for appellant.

      Little & Enfield, Leflar & Croxton, and Mchaffy, Smith & Williams, by Herschel H. Friday, Jr., and James E. Westbrook, for appellee.
   George Rose Smith, J.

By this proceeding, which is apparently a test suit, the appellants as citizens and taxpayers seek to obtain a declaratory judgment and an injunction preventing the appellees from carrying out a proposed arrangement by which four cities in northwest Arkansas are undertaking to obtain a supplementary water supply. The chancellor found the proposal to be valid in all respects, sustained a demurrer to the complaint, and dismissed the suit.

For some years it has been the policy of the federal government to permit some part of the water impounded in federally owned lakes and reservoirs to be reserved for municipal and industrial use. The most recent statute, 43 U. S. C. A. § 390b, permits the Corps of Engineers to include a provision for such municipal or industrial use in its plans for a new reservoir if state or local interests agree to pay all additional construction costs that result from the inclusion of this provision in the plans.

In order to take advantage of this federal policy our legislature adopted Act .114 of 1957, which appears as Ark. Stats. 1947, §§ 21-1401 et seq. This statute provides for the creation of regional water distribution districts as nonprofit public corporations. Such a district is authorized to contract with the Corps of Engineers for the acquisition of water rights in federal impoundments and to make contracts with, consumers, including municipalities, for the sale of such water. In order to finance its operations the district is authorized to borrow money and to issue bonds to be secured by a pledge of its assets and revenues.

Pursuant to the above statute the Beaver Water District was organized by an order of the.Benton circuit court on July 17, 1959. The district proposes to enter into a contract with the Corps of Engineers for the acquisition of water rights in the reservoir that is to be impounded by the construction of Beaver Dam. The district also proposes to enter into contracts for the sale of water to the cities of Bentonville, Fayetteville, Rogers and Springdale. To obtain money for its operations the district will issue bonds to be secured by a pledge of its assets and revenues.

In attacking this proposal the appellants rely upon seven grounds for questioning its validity.

I. It is first contended that the four cities do not have the authority to enter into an agreement such as the one now proposed. The principal case relied upon is Yancey v. City of Searcy, 213 Ark. 673, 212 S. W. 2d 546, where we held that the city of Searcy could not purchase an extensive intercity water distribution system and go into the public utility business by undertaking to serve three other municipalities.

That decision is not controlling in the case at bar. Here the four municipalities do not propose to sell water to one another or to enter into the business of acting as public utilities. All that each city seeks is a dependable source of water for its own municipal waterworks. In McGehee v. Williams, 191 Ark. 643, 87 S. W. 2d 46, we held that a city is authorized .to purchase a water supply for distribution to its own inhabitants and that the purchase may be made from another municipality. Hpon that reasoning there is no valid objection in the present case to the four cities ’ obtaining a water supply from the Beaver Water District.

II. It is next contended that Amendment 10 to the state constitution prevents the cities from executing two proposed contracts with the Beaver Water District. Amendment 10 requires the fiscal affairs of all cities to be conducted on a sound financial basis and prohibits any city from entering into any contract or incurring any obligation in excess of its revenues for the current fiscal year. By one of the contracts now in question, attached as Exhibit C to the complaint, the city would pledge only its net waterworks revenues to secure the performance of its contract with the Beaver Water District. This contract is valid, for it is well settled that Amendment 10 does not prohibit the creation of a debt exceeding current annual revenues if the debt is secured by and payable solely out of the income or assets of a special and separable activity such as a municipal waterworks. Williams v. Harris, 215 Ark. 928, 224 S. W. 2d 9.

On the other hand, the contract appearing as Exhibit B to the complaint does not contain any restriction upon the source from which the city’s obligations must be paid. By the language of this contract the city would bind itself to purchase water from the Beaver Water District for a period of fifty years. The complaint alleges, and the demurrer admits, that the total purchases under this contract would exceed the current revenues of each city. Under many decisions of this court it must be held that the contract in question is contrary to the provisions of Amendment 10. Luter v. Pulaski County Hospital Association, 182 Ark. 1099, 34 S. W. 2d 770, and Williams v. Harris, supra. For this contract to be valid the city’s obligation would have to be payable only from the revenues from its municipal waterworks. To this extent the trial court’s declaratory judgment upholding the entire proposal must be modified.

III. At least one of the participating cities, Fayetteville, has an outstanding municipál waterworks bond issue. The ordinance creating this bond issue pledged the revenues from the municipal waterworks to the payment of the bonds and provided that surplus revenues might be used only for prepayment of the bonds or “for making extensions, betterments and improvements to the system.” It is now contenedd that the city’s pledge of its surplus revenues to the Beaver Water District violates the restrictions contained in this ordinance.

This argument is without merit. What the city is attempting to do is to obtain an additional water supply for its municipal distribution system. It seems too plain for discussion that the proposal constitutes an extension, betterment, or improvement to the existing system. A waterworks cannot be operated without a source of water.

IV. It is insisted that the deed of trust to be executed by Beaver Water District to secure its outstanding bonds goes beyond the authority conferred on the district by Act 114 of 1957, under which the district was created. Specifically, it is contended that the act contemplates that the district will pledge only its net revenues, while in fact the proposed deed of trust contains a pledge of all the district’s revenues. Ark. Stats., § 21-1412 (b).

When the deed of trust is read in its entirety we think it is plainly limited to a pledge of net revenues. Although there is some broad language in the granting clause that refers to the district’s revenues in general, this language is limited by later provisions in the instrument. By § 305 of the deed of trust the district covenants to keep the mortgaged properties in good condition and to make all needed repairs, replacements, additions, betterments, and improvements. By § 403 it is directed that a sufficient part of the district’s revenues be paid each month into an Operation and Maintenance Fund to provide for the expenses of operation and for the repair and maintenance of the district’s property. It is then directed by § 404 that after the required monthly deposit has been made in the Operation and Maintenance Fund there shall be deposited sufficient revenues in a Bond Fund to pay the accruing principal and interest of the bonds. Thus when the deed of trust is construed as a whole it clearly provides for the operation and maintenance of the district’s property, so that there is no pledge of gross revenues.

V. We find no merit in the appellants’ contention that Act 414 of 1955, Ark. Stats., §§ 19-4239 et seq., is the only authority for two or more municipalities to'join together in the acquisition of a water supply. In the first place, § 3 of that act provides that it is cumulative and not a limitation upon other existing laws. Secondly, Act 114 of 1957, authorizing the creation of water distribution districts, is a later statute and is clearly not affected by the provisions of the prior act.

VI. , In entering into the proposed arrangement the cities will execute a contract restricting to some extent their future power to borrow money for waterworks improvements and to issue bonds evidencing such loans. This, however, is unavoidable, for in every case when a municipality executes a contract which pledges a part of its revenues it necessarily reduces its ability to borrow additional money in the future. There is no showing in the case at bar that these cities have abused their discretion in entering into the proposed arrangement with the Beaver Water District. In the absence of any facts indicating an abuse of discretion it is not for us to say that the cities should not have entered into an arrangement that appears to. be a desirable method of securing an ample water supply for the future. We know, of course, that an abundant source of water is often an essential factor in a.municipality’s effort to attract new industries.

VII. The final contention is that in making their contracts with the Beaver Water District the cities are not authorized to agree that the water rates to be charged to their consumers will be maintained at a level sufficient to meet the cities’ obligations. It is insisted that a city cannot impair its right to fix its water rates in the future, this being a reserved power that cannot be bargained away. Delony v. Rucker, 227 Ark. 869, 302 S. W. 2d 287.

It is true that in the absence of statutory authority it has been held that a municipality cannot, in issuing: bonds, validly agree that its water rates will not be reduced during the life of the bonds. Batchelder v. Hartwig, 63 Ore. 472, 128 P. 439. When, however, such an agreement is authorized by statute it may be made by the city and becomes a contract that is protected from impairment. Karel v. City of Eldorado, D. C. Ill., 32 F. 2d 795; State ex rel. City of Vero Beach v. MacConnell, 125 Fla. 130, 169 So. 628.

Our statute governing all niunicipal waterworks provides that the rates to be charged by the municipality must be adequate to pay the principal and interest on all revenue bonds and that rates fixed prior to (and in connection with) the issuance of revenue bonds may be reduced if authorized by the trust indenture or the ordinance pertaining to the bond issue; “provided however the rates shall not be reduced below the standards herein prescribed. ’ ’ Ark. Stats., § 19-4208. Thus it will be seen that the legislature permits the rates to be reduced during the life of the bond issue if the trust indenture or ordinance so provides. It follows that the contracting parties are impliedly authorized to enter into an arrangement which does not so provide, in which case the rates are not subject to reduction during the life of the bonds.

It is our conclusion that the trial court’s decree is correct in all respects except for the modification contained in part n of this opinion.

With this modification the decree is affirmed.


author: Paul Ward, Associate Justice.

text:
    Hyde v. Taylor.
    5-2717
    357 S. W. 2d 289
    Opinion delivered May 21, 1962.

      Cecil Grooms, for appellants.

      Rhine & Rhine, for appellee.
   Paul Ward, Associate Justice.

Appellee, H. P. Taylor, entered into a written contract with appellants to build them a house on their land for $12,000. After the house was completed appellants refused to pay appellee the contract price and this litigation followed.

Appellee filed a complaint in chancery alleging that between May 5, 1960 and October 18,1960 he constructed a dwelling for appellants, furnishing labor and materials in the total sum of $12,000 as shown in an attached exhibit; that there is past due the sum of $6,496.88; and that on January 16, 1961 (being less than 90 days after the last item of materials and labor was furnished) he filed a material and laborman’s lien as required by law. The prayer was for judgment in the amount stated and for a statutory lien on the dwelling and lands.

Appellants first filed a motion to dismiss the above complaint on the ground of res judicata which motion was denied. Then they filed an answer again raising the plea contained in the motion, and also stating that more than 90 days had elapsed after the last item of labor and materials was furnished before the lien was filed.

After a full hearing the chancery court found the issues in favor of appellee and entered a decree to that effect. Appellants here present their contentions for a reversal under four separate points.. These points will be discussed in the order presented. The pertinent evidence will be considered as we discuss each separate point.

One. Appellants seriously contend that appellee furnished no materials and did no work within 90 days prior to filing his lien in the circuit clerk’s office on January 16, 1961. Appellee says he did the last work on the house on October 18,1960, and appellants say the last work was done (or materials furnished) on October 5, 1960. The issue under this point is clear cut and, of course, the trial court must be sustained unless we find its decision is against the weight of the evidence. The trial court made the specific finding that appellee “did on the 16th day of January, 1961, before the expiration of ninety (90) days from the date of supplying the last item of materials and labor file a Material and Labor-man’s Lien. . . .” Appellee testified emphatically that the last item of work or materials furnished on the job was October 18, 1960. He stated he bought material in the amount of $3.45 on the above date and took it out to the house to fix the tile in the hall and further testified that Mr. Hyde (appellant) knew about it. This testimony was corroborated by a statement on the letterhead of Hickson, Inc. (building materials) signed by the secretary. It reads: “I hereby certify that the last material purchased by H. P. Taylor for use on the Aaron Hyde residence was invoice No. 25644 in the amount of $3.43, dated October 18, 1960”. All the above was contradicted by Mr. Hyde who stated that the last work appellee did on the house was on October 5, 1960. He further stated that the cement appellee purchased on October 18 was not used on his house. On cross examination Mr. Hyde admitted he was not at the house every minute, but said ho was there ten times more than appellee.

In view of the conflicting evidence we are unwilling to superimpose our judgment over that of the chancellor. The chancellor could have arrived at his decision on the basis that there was an honest mistake on the part of appellants, or he may have viewed the testimony as •irreconcilable. In either event he was in a better position to arrive at the true facts than are we.

Two. The defense of res judicata was based on the facts and circumstances set out below.

Appellee had apparently sublet part of his construction job to A. D. Johnson (dba Allen’s Plumbing & Heating Co.) and to Hickson, Inc. (a supplier). Having unpaid bills, each of these suppliers sued appellants and appellee for their money and sought a lien on the property. Appellee filed no answer in those actions — in fact, he said he advised the suppliers to take the action they did. By decree dated May 2, 1961, the chancery court found in favor of the two suppliers. A sale of the property was ordered, but appellants paid the judgment before the sale was held. Appellants lay particular stress on certain language in the court’s decree (of May 2) to the effect that appellee had not proceeded within the time and manner required by law to establish a contractor’s lien against the owner. Appellants also strongly insist that appellee, being a party to the above mentioned suits, should have asserted therein any claim he had against them.

We are inclined to the view, however, that the above mentioned litigation is not res judicata of the issue here presented, i. e., appellee’s right to collect his money and perfect his lien. The pertinent rule in this connection has been stated many times and in many ways. In Teasley v. Thompson, 204 Ark. 959, 165 S. W. 2d 940, it is stated:

“Before appellants may successfully sustain the defense, that the former injunctive proceedings between the parties here were res judicata of this action, it is essential that they show that the parties and the issues in both actions were the same.”

In Carrigan v. Carrigan, 218 Ark. 398, 236 S. W. 2d 579, the Court in this connection said:

“ ‘. . . it must appear either upon the face of the record, or be shown by extrinsic evidence, that the precise question was raised and determined in the former suit.’ ”

There remain two principal issues in this litigation: the balance appellants owe appellee under the contract and how much is secured by a lien on the property. Since appellants offer res judicata as an affirmative defense, the burden is on them to show (by the record) that the two issues above mentioned were also issues in the previous litigation. Appellants frankly admit they cannot discharge that burden. "We therefore must sustain the decision of the trial court on this point.

Three. Appellants say the trial court erred in refusing to transfer the cause to the circuit court. It seems this assignment is based solely on an error in the record which has been cured since their brief was filed here. The original record (before correction) showed appellee to have admitted he had no lien and that only questions of law were presented. The corrected records show the above statement in the record to be the result of an error on the part of the reporter.

Four. The trial court found that appellants were indebted to appellee in the sum of $5,839.24 (with interest thereon from January 16, 1961) and gave judgment accordingly. It also held that said judgment was a first lien on appellants’ property. Appellants challenge the above actions of the trial court in two respects: (a) as to the amount of the judgment and (b) the extent of the lien.

(a) We are unable to say the evidence does not support the finding that appellants owe appellee the full sum of $5,839.24 (plus interest) on the contract. It is true that some of the testimony is indefinite and hard to-evaluate, but we cannot say the chancellor’s finding was against the weight of the evidence. Appellants have not. pointed out any definite figures or testimony to indicate error.

(b) We have concluded-there is no clear testimony in the record to sustain thé chancellor’s finding that. appellee is entitled to a lien for the full amount of the judgment. Under our holding in the case of Withrow v. Wright, 215 Ark. 654, 222 S. W. 2d 809, appellee was not entitled to a lien for his profits (if any) as a result of performing the contract. After a careful review of the record we are unable to determine with any degree of satisfaction what part of the total judgment represents labor and materials paid for by appellee or if any of it represents profits. These questions can more easily and more accurately be determined, we believe, by the trial court.

For the reasons just mentioned the cause is remanded for further proceedings. In all other respects the decree of the trial court is affirmed.


author: Sam Robinson, Associate Justice.

text:
    Alexander v. McCray.
    5-2696
    357 S. W. 2d 301
    Opinion delivered May 21, 1962.

      J. B. Milham and Gladys M. Cummins, for appellant.

      Fred E. Briner, for appellee.
   Sam Robinson, Associate Justice.

This is a suit for a real estate agent’s fee, alleged to have been earned in the sale of a tract of seven and a fraction acres for the sum of $7,695.00. There was a judgment for the plaintiffs, Jack and J. E. McCray, real estate agents, in the sum of $745.00, and the defendant, Will Alexander, the property owner, has appealed.-

Appellees are licensed real estate brokers in Benton. They entered into a contract with appellant, Will Alexander, whereby they undertook to have surveyed 16 acres, more or less, belonging to Alexander, streets marked off, the property divided into lots, and sell the same for a commission of 20 per cent of the sale price.

When the survey was made it was discovered that a small strip of land, thought to be a part of the 16 acres owned by appellant, really belonged to Wyatt Crawford. In an attempt to iron out this difficulty, Jack McCray talked with Mr. Crawford. In the course of the conversation Crawford made an offer of $1,000.00 an acre for seven and a fraction acres of Alexander’s 16 acres. McCray conveyed this information to Alexander.

There is substantial evidence to the effect that Alexander inquired of Jack McCray if the real estate agent’s fee would be 20 per cent as provided by the original contract, and that McCray replied that in the circumstances, the fee would be only the regular commission of ten per cent for selling country property. The evidence is substantial to the effect that Alexander authorized McCray to proceed with the sale on that basis; that McCray prepared the offer and acceptance, and that the sale was completed.

Of course, there can be no question but that the original contract for selling the 16 acres as lots was abandoned. McCray testified that Alexander agreed to sell the seven and a fraction acres to Crawford and his associate, J. B. Yarbrough,' Jr., and it is clear from the record that Alexander did convey the property to them.

There is only one real question; did Alexander agree to pay McCray ten per cent of the sale price for making the sale to Crawford and Yarbrough? The jury’s verdict answering that question in the affirmative is supported by substantial evidence.

Affirmed.