author: Donis B. Hamilton, Special Justice. Steele Hays, Justice,

text:
    Melvyn Epstein FESTINGER et al v. Helen Epstein KANTOR et al
    80-15, 80-174 and 80-184
    616 S.W. 2d 455
    Supreme Court of Arkansas
    Opinion delivered May 4, 1981
    [Rehearing denied June 22, 1981.]

      Howell & Price, by: Dale Price, for appellants Steve Festinger, Lynda Festinger White, Ed Festinger as Next Friend and Guardian Ad-Litem of Rebekkah Ruth White, Joan Elanine White and Paula White; and Wright, Lindsey & Jennings, by: Alston Jennings, Sr., and Eichenbaum, Scott, Miller, Crockett, Dorr & Hawk, PA., by: Leonard L. Scott, for appellant Melvyn Epstein Festinger.

      Robert R. Wright and Friday, Eldredge & Clark, by: Michael G. Thompson and James E. Harris, for appellee Sylvia Epstein Angel; and Sanford L. Beshear Jr. and Drew & Mazzanti, by: William H. Drew, for appellees Sam Angel and Rodney Angel, Individually and Sam Angel, as Guardian of the Estates of Sam Epstein Angel II and Cheryl Angel, minors.
   Donis B. Hamilton, Special Justice.

This complex case involves three appeals pending in this court consolidated for argument and decision. The first case (80-15) consists of two cases which were consolidated in the trial court and has been previously before us. See Festinger v. Kantor, 264 Ark. 275, 571 S.W. 2d 82 (1978). As we commented then, it is not an overstatement to say the issues are as numerous as would ordinarily be found in a half dozen lawsuits. The basic issues in 80-15 involve the construction of the wills of Sam Epstein and Becke Ruth Epstein, his wife, the construction of the testamentary trusts found in each of those wills, accounting by the trustees, termination of the trusts, and partition of certain lands. The other two cases (80-174 and 80-184) involve appeals from the chancellor’s orders concerning the sale of one of the assets (a cotton gin, its improvements and related acreage), and the confirmation thereof.

After having reviewed the orders appealed from, we affirm in part and reverse in part.

Prior to his death in 1944, Sam Epstein accumulated vast holdings in Chicot County consisting of approximately 10,000 acres of land, two properties and lots, rent houses, business properties, and a cotton gin. Surviving Sam Epstein were his widow, Becke Ruth Epstein, and three daughters, Helen Epstein Kantor, Sylvia Epstein Angel and Melvyn Epstein Festinger.

During his life, Sam Epstein either bought or arranged for the purchase of various properties aggregating approximately 1,000 acres consisting of various tracts, the deeds to which showed the grantees as being Becke Ruth Epstein (the wife of Sam Epstein), Helen Epstein, Sylvia Epstein, Melvyn Epstein, or in the name of Ben Angel (son-in-law of Sam Epstein and husband of Sylvia Epstein Angel), or in combination of two or more of these five persons. These properties constitute what will be referred to herein as the “disputed properties.” Other properties which were unquestionably in Sam Epstein’s name or which were acquired by the trustees of his testamentary trust are referred to as the “undisputed properties” or the “original lands.” Certain other lands, although originally a portion of the disputed lands were later excepted out of the case by a stipulation of the parties and have been referred to as the “excepted lands.”

Part VII of Sam Epstein’s will, dated less than two months prior to his death, provides;

I give, devise and bequeath to my said trustees, Ben Angel, Harold Kantor and Becky Ruth Epstein, ... and unto the survivor of them, and their successor in trust as herein provided, all of my estate ... to be held in trust as herein provided, all of my estate ... to be held in trust by them for the use and benefit of my said beloved wife, Becke Ruth Epstein ... and my said children, Helen Epstein Kantor, Sylvia Epstein Angel and Melvyn Epstein Festinger, share and share alike, and unto the heirs of their body and the survivor or survivors of them, per stirpes, for the uses, covenants, purposes and with and subject to the powers and limitations hereinafter expressed and declared of and concerning the same as follows ...

Subparagraph (F) of Part VII of the will provides that the net income of the trust estate should:

be paid over ... to my beloved wife, Becke Ruth Epstein ... and to my children, Helen Epstein Kantor, Sylvia Epstein Angel and Melvyn Epstein Festinger, share and share alike, and unto the heirs of their body, and the survivor or survivors of them per stirpes, so long as they shall live, or until the expiration of this trust. ...

Subparagraph (G) of Part VII of the will is as follows:

This trust shall remain in full force and effect for a period of ten years from the date of my death, and as long thereafter as my said wife shall live, provided she is a party beneficiary and trustee under this trust, if not, then for so long thereafter as the surviving beneficiary or beneficiaries hereunder may elect, and when, according to the terms hereof, this trust shall cease, it then is my will and I do so hereby devise, will and bequeath all of the remainder thereof, as well as money and all other assets of said trust estate, and the increase thereof, in fee simple and absolute, to the beneficiaries under this trust, share and share alike, and unto the heirs of their body, and the survivor or survivors of them, per stirpes.

It is undisputed that before his death, Sam Epstein controlled, managed, rented and collected the income from all of the properties, both disputed and undisputed. Although it is asserted that Sam Epstein kept some sketchy accounts in his books relating to income from properties variously owned among his wife, his daughters and his son-in-law, it is undisputed that only nominal amounts of income were actually distributed to the record title owners. After Sam Epstein’s death, Ben Angel, who, by all accounts, was an honest, honorable and diligent manager, continued to manage all the properties, both disputed and undisputed, in the same manner as Sam Epstein had done prior to his death. For the period from 1944 to 1951, it is controverted as to whether income from the disputed properties was accounted for in the books or ledgers that were kept. However, all distributions of income that were actually made were given in equal shares to the widow and three daughters. From 1951 until litigation was commenced, both disputed and undisputed properties were managed as a single unit without attempting to identify what income was produced by what property and with all distributions being made in five equal parts: one part was retained in the trust to provide for depreciation and capital expenditures; one part was distributed to Becke Ruth Epstein; and the remaining three parts were distributed to the three daughters.

Sam Epstein’s widow, Becke Ruth Epstein, died testate in 1963. In one provision of her will, Mrs. Epstein implores her daughters to continue the Sam Epstein Testamentary Trust, apparently under the mistaken impression that it would continue after her death:

(3) It is my wish and desire that after my death, my daughters or those surviving me shall elect to continue the Sam Epstein Trust as their father intended for them to do. By so following the intent of their father, his grandchildren should always enjoy economic security as their grandfather provided for their mothers. If my daughters elect to continue said trust, it is my desire that my three daughters, the survivor or survivors, shall qualify and act as co-trustees with Ben Angel and such that all four of them will be charged with the duties and obligations imposed by the said Sam Epstein Trust. ...

In another portion of her will, and after making specific bequests, Mrs. Epstein leaves the residue of her property to her three daughters in trust to pay the income to the grandchildren during their lifetimes with the remainder over to the descendants of said grandchildren.

In 1964, the three Epstein daughters filed a petition in the Chancery Court of Chicot County alleging that they were the sole surviving heirs at law of Sam Epstein and the beneficiaries under his testamentary trust. The petitioners further alleged that the trust had been in existence and still existed. They stated that they had elected to continue the trust after the death of their mother, Becke Ruth Epstein, and asked that the court approve their election to carry on the trust under the terms of the Sam Epstein will until the death of the last of the three daughters. A consent order of the Chancery Court of Chicot County was issued the next day authorizing the trust to:

continue to operate as a trust estate under the provisions of said will and with Ben Angel, Helen Epstein Kantor and Sylvia Epstein Angel as trustees in succession, with all the powers, duties and under the terms of said trust estate ...

The three daughters of Sam Epstein, together with Ben Angel, continued to operate both the disputed and undisputed properties, apparently as trustees, although the management, direction and control of the properties were handled by Ben Angel whom all parties respected and trusted. It should be pointed out that so long as Sam Epstein lived, and after his death so long as Ben Angel lived and managed the affairs of the family, everyone was happy and all of the properties, both disputed and undisputed, were successfully managed as a unit. After Becke Ruth Epstein’s death, rather than have the separate properties owned by her husband managed by the Becke Ruth Epstein Testamentary Trust, they were continued to be managed apparently as a part of the Sam Epstein Trust with the one-fifth share of the income which ordinarily would have gone to Becke Ruth Epstein being paid in equal shares to her grandchildren (Sam Angel and Rodney Angel, sons of Sylvia Epstein Angel, and Lynda Festinger White and Steve Festinger, the daughter and son of Melvyn Epstein Festinger — Helen Epstein Kantor not having any children).

In 1969, Ben Angel died. Without question, Ben Angel was the ridgepole over which the tent of the Epstein empire was draped. Without his character and leadership to give it form, the various Epstein holdings which were the canvas that sheltered and protected the Epstein family came down on their heads. The family members are now engaged in what has been a seven-year struggle to see which member can walk off with the biggest part of the fabric.

The character of Ben Angel is evidenced by the following remarkable provision in his will:

While the entire or an undivided interest in the naked or legal record of the separate parcels of real estate hereinafter identified in this Item Third of my will at my death may be in my name, such parcels of real estate are not owned by me personally and are not to be included in the assets of my estate. So, as soon as may be convenient after my death, my executrix shall execute a quitclaim deed conveying all of my right, title and interest, divided or undivided, appearing of record in such parcels of real estate to the trustees or to the beneficiaries for the title thereto to vest under the terms of the Last Will and Testament of the late Sam Epstein to be found of record in Will Record Book, Volume E, Pages 138 through 143, in the office of the Probate Clerk of Chicot County, Arkansas, identified and described, to wit: (here are described thirteen parcels of property referred to by the court below and the parties here as Tracts 1, 4, 14 and 76).

If, for any reason, the Sam Epstein Trust Estate is not active or in existence at the time of my death or should be terminated or for any other reason this Item Three of my will cannot be carried into effect under the trust provisions of the will of Sam Epstein, deceased; then, in such event, my executrix shall execute a quitclaim deed conveying all of my right, title and interest in such parcels of real estate to the beneficiaries and as set out in the terms and provisions of the said Sam Epstein will.

Sylvia Epstein Angel, the widow of Ben Angel, was appointed executrix of his will with virtually unlimited power over the probate estate. Notwithstanding her position as trustee of the Sam Epstein Trust and notwithstanding her position as executrix of her husband’s estate, she has refused to carry into effect the solemn provisions of her husband’s will and has claimed that, as a surviving spouse and, therefore, the surviving tenant by the entirety of the interest conveyed of record to her and to her husband (as well as to others) in the deeds to the four tracts, she claims the entire interest as her own.

Following the death of Ben Angel, the acrimony among members of the family grew until 1973 when the appellees, Helen Kantor and Sylvia Angel, filed suit in chancery court against the appellant, Melvyn Festinger, seeking partition of the lands in the Sam Epstein Trust, which they contended they owned in fee simple and stating that they were electing to terminate the trust as continued by the 1964 chancery court order. The properties sought to be partitioned, with minor exceptions, were the “undisputed” lands or “original lands” which Sam Epstein owned in his own name at his death. The appellant, Melvyn Festinger, filed a counterclaim and cross-complaint seeking, among other things, accounting, removal of the appellees as trustees, and the partition of the “disputed” lands. Over the seven years that the litigation has been pending there has been a multitude of pleadings and amended pleadings. Eventually, Rodney Angel and Sam Angel (children of Sylvia Epstein Angel); Sam Epstein Angel, II, and Cheryl Angel, through their guardian and father, Sam Angel; Steve Festinger and Lynda Festinger White (the children of Melvyn Epstein Festinger); and Rebekah Ruth White, Joan Elaine White and Paula White (children of Lynda Festinger White) have either intervened or have been joined as cross-defendants.

We do not deem it necessary to list all of the various claims made by each of the parties and their positions as to each claim. Suffice it to say, the abstract of pleadings, testimony and briefs submitted to this court include eleven volumes of printed material containing in excess of 2,350 pages, excluding appendices and photostatically reproduced exhibits. We shall attempt to deal with the issues as they relate to the chancellor’s order below.

I.

INTERPRETATION OF THE SAM EPSTEIN WILL

The chancellor found that the Sam Epstein will, portions of which are quoted above, vested a fee tail estate in one-fourth of the trust property in each of the three daughters and the widow, Becke Ruth Epstein. We agree. The unlettered opening portion of Part VII of the Sam Epstein will (which deals with the trust) conveys the property to the trustees:

... to be held in trust by them for the use and benefit of my said beloved wife, Becke Ruth Epstein ... and my said children, Helen Epstein Kantor, Sylvia Epstein Angel and Melvyn Epstein Festinger, share and share alike, and unto the heirs of their body and the survivor or survivors of them, per stirpes. ...

The dispository provisions of Subparagraph (G) of Part VII provides:

... and when, according to the terms hereof, this trust shall cease, then it is my will and I do so hereby devise, will and bequeath all of the remainder thereof, as well as money and all other assets of said trust estate, and the increase thereof, in fee simple and absolute, to the beneficiaries under this trust, share and share alike, and unto the heirs of their body, and the survivor or survivors of them, per stirpes.

When the provisions of Subparagraph (G) is read and closely related to the unlettered opening paragraph of Part VII, it is clear, we believe, that a one-fourth share in the trust property (real estate) vested, legally and equitably, in each daughter for life, with the remainder over to her bodily heirs, and the remaining one-fourth share vested, legally and equitably, in the mother, with the remainder to the three daughters equally, they being the bodily heirs of their mother.

It has been argued here that the order of the words used by Sam Epstein in the dispositive provisions of his will following the termination of the testamentary trust would result in the vesting of a fee simple to the widow and daughters in equal shares rather than a fee tail. In other words, by stating that the trust estate remaining would go “in fee simple and absolute, to the beneficiaries under this trust, share and share alike, and unto the heirs of their body, and the survivor or survivors of them, per stirpes,” the result is different than if the words “in fee simple and absolute” had, in that same sentence, followed the words “heirs of their body.” Had the latter order of words been used, the devise would have been “to the beneficiaries and unto the heirs of their body in fee simple and absolute, share and share alike.” The argument made is that since the language, “in fee simple and absolute” was used at the first portion of the sentence, the gift had been made in fee simple, and the remaining limitation over only to the heirs of the body is void. This argument is based on a line of cases traced from Moody v. Walker, 3 Ark. 147 (1840) down through Bernstein v. Bramble, 81 Ark. 480, 99 S.W. 682 (1907) and most recently announced in Langston v. Hunt, Administrator, 269 Ark. 328, 601 S.W. 2d 833 (1980). While we recognize the rule in the line of cases above mentioned, we have also, in applying the rule, stated that when the clear, unequivocal and demonstrated intent of the testator is to limit prior devise, the limitation will be given effect. In Langston v. Hunt, Administrator, supra, we stated:

The present rule simply stated is that a testator cannot give an estate in fee simple by clear and concise language and subsequently diminish or destroy the devise by use of other language. In other words, once the fee is given to a person or class of persons or other devisee, it cannot thereafter be taken away or diminished unless the terms are clear, unequivocal, and demonstrate the intent to limit the prior devise. (Emphasis supplied.)

We believe that here, the testator’s intent, expressed over and over almost to the point of repetitiousness, is clear and unequivocal that he wanted the estate to remain in the bloodlines of the mother and daughters. Therefore, we agree with the trial court that whether the words “in fee simple and absolute” came first or last in the particular sentence should carry no weight and should certainly not be allowed to thwart the many times expressed intention of the testator that the trust properties were entailed to the named beneficiaries and the heirs of their body.

It has been argued here that the doctrine announced in Bell v. Gentry, 141 Ark. 484, 218 S.W. 194 (1920), would operate to vest title absolutely in the three daughters of Sam Epstein. This doctrine, which has also been followed in Pletner v. Southern Lumber Co., 173 Ark. 277, 292 S.W. 370 (1927); Eubanks v. McDonald, 225 Ark. 470, 283 S.W. 2d 166 (1955); and Creekmore v. Gregory, 244 Ark. 1, 423 S.W. 2d 548 (1968), is that a conveyance to “A” for life, then to “B” and to the heirs of his body vests title in “B” in fee simple, absolute. We think that our construction of the will of Sam Epstein eliminates the application of the above doctrine. Each of the three daughters had the estate given her in one-fourth entailed upon her and her bodily heirs. There was no intervening life estate in another. As to the widow’s interest, there was an immediate merger of the legal and beneficial or equitable title at her death which also happened to constitute the termination of the trust. No intervening life estate in a third party is indicated as to her interest. On the facts and our interpretation of the will here, the rule of Bell v. Gentry and its progeny would be inapplicable.

In accordance with the above, the real estate in the Sam Epstein Trust is owned as follows: each of the three daughters of Sam Epstein owns an undivided one-fourth interest in fee simple as a surviving heir of the body of Becke Ruth Epstein; each of the three daughters of Sam Epstein has an additional one-fourth interest for life, with the remainder over to her bodily heirs living at her death. The reversion of the estate tail of any daughter dying without bodily heirs will pass to the heirs at law of Sam Epstein in the same manner as if he had died intestate because no additional residuary clause other than that provided by the testamentary trust was contained in his will. See Fletcher v. Hurdle, 259 Ark. 649, 536 S.W. 2d 109 (1976); Nowak v. Etchieson, 241 Ark. 328, 408 S.W. 2d 476 (1966). We do not overlook Act 183 of 1979 but that statute clearly does not apply to the will of Sam Epstein who died some thirty-five years prior to its enactment.

Since a fee tail cannot exist in. personalty, Moody v. Walker, 3 Ark. 147(1840); Slaughter v. Slaughter, 23 Ark. 356 (1861), the personal property in the Sam Epstein Testamentary Trust vested one-fourth in each of the three daughters and one-fourth in Becke Ruth Epstein’s estate (and from there to the Becke Ruth Epstein Testamentary Trust) at the death of Becke Ruth Epstein.

II.

EFFECT OF THE 1964 ORDER

Following the death of Becke Ruth Epstein, the three daughters filed a non-adversary petition in the Chancery Court of Chicot County alleging that they were the beneficiaries of the trust estate created under their father’s will, that the administration of their father’s estate had been concluded and requesting court approval for continued operation of the Sam Epstein Trust. The following day, the chancery court entered a consent order finding that the trust might properly be continued beyond the death of Mrs. Epstein and noting the election of the three daughters to continue the trust which the court granted pursuant to the terms of the will of Sam Epstein, and the laws of the State of Arkansas. None of the prospective bodily heirs of the three daughters were parties to the proceeding and, apparently, most of them were minors at the time. Although the appellants argued vociferously to the trial court (as they have here) that the 1964 order was res judicata with respect to the ownership of the property and bound the three sisters to continue the trust until the death of the last survivor as among them, the trial court found to the contrary and we concur. As pointed out above, the order can certainly not bind the children of Sylvia Epstein Angel or Melvyn Epstein Festinger since they were not parties thereto. Further, the order simply authorizes the continuance of the trust under the terms of Sam Epstein’s will which authorized a continuance of the trust at the election of the three sisters. Now, two of the three sisters, together with the children of one of them, who are apparent remaindermen, have elected and petition the court to discontinue the trust. The court below found that none of the three sisters was prevented from withdrawing her accord initially given to the continuance of the family enterprises within the format of the father’s testamentary trust. The court further found that any benefits arising by virtue of the continuance of the trust had given way and been lost due to family bitterness and cross purposes necessitating the termination of the trust. We believe, on the basis of the circumstances here existing and the wording contained in the Sam Epstein will and the 1964 order, the chancellor’s decision on this point was correct.

III.

OWNERSHIP OF THE "DISPUTED LANDS”

While the bulk of the total family properties was undisputedly owned by Sam Epstein solely prior to his death, or was acquired by his estate and/or trust after his death, there were various lands estimated by us to exceed 3,200 acres and town lots the legal title to which was variously vested of record in the three daughters and their mother. It is virtually undisputed that the interests in the various tracts of land acquired by Sam Epstein during his life in his wife’s and daughters’ names resulted from transactions initiated and handled to conclusion by the father. Further, prior to his death, Sam Epstein or employees of his office were solely responsible for managing, farming, renting, paying taxes and collecting rents or income from these properties. After Sam Epstein’s death, some sketchy records were kept in the Epstein office of receipts and expenses received and paid in connection with these disputed lands but apparently all actual distributions of income were made equally among the three daughters and their mother. From 1951 or 1952 all of the disputed lands were treated as part of the Sam Epstein Testamentary Trust for all purposes of managing, preserving, improving, leasing, collecting rents and profits therefrom, paying expenses in connection therewith and distributing the net rents and profits. Prior to the institution of this litigation, the net rents and profits, after the payment of expenses, were divided into five portions, one part of which was kept in the trust for replacement of depreciable items and capital investments, and four remaining parts were distributed equally to Mrs. Epstein and the three daughters. After Mrs. Epstein’s death, her share was continued to be set apart to her and it was distributed to her grandchildren, the beneficiaries of the Becke Ruth Epstein Testamentary Trust.

The appellants assert that the treatment of the disputed properties, both before and after Sam Epstein’s death, indicates that, at the time of the acquisition of these properties, a resulting trust existed by which the legal title was vested variously among the mother and three daughters but equitable title remained in Sam Epstein and after his death became a part of his estate and testamentary trust.

At the outset, it should be pointed out that the appellants had a very heavy burden of proof. Under our cases, the party asserting the resulting trust must prove by clear, cogent and convincing evidence that such trust existed at the time of the transaction which vests title in the resulting trustee’s name. Standridge v. Standridge, 253 Ark. 1004, 490 S.W. 2d 125 (1973); Ripley v. Kelly, 207 Ark. 1011, 183 S.W. 2d 793 (1944); Harrison v. Cruse, 233 Ark. 237, 343 S.W. 2d 789 (1961); and Bebout v. Bebout, 241 Ark. 291, 408 S.W. 2d 480 (1966). Further, since the parties involved were the wife and daughters of Sam Epstein and therefore, the natural objects of his affection and largess, the law presumes that his purchase of property and registration of legal title thereto in the family members’ names were intended as gifts by him to them. Milner v. Freeman, 40 Ark. 62 (1882); James v. James, 41 Ark. 301 (1883); White v. White, 52 Ark. 188, 12 S.W. 201 (1889); Harbour v. Harbour, 103 Ark. 273, 146 S.W. 867 (1912); Roller v. Roller, 214 Ark. 382, 216 S.W. 2d 399 (1949); and Harrison v. Knott, 219 Ark. 565, 243 S.W. 2d 642 (1951).

While at first blush the proof that Sam Epstein, during his lifetime, exercised dominion, management and control of the disputed properties, and after his death Ben Angel, who managed the Sam Epstein Testamentary Trust, did so likewise, would seem to indicate that a resulting trust existed, the chancellor was not convinced that this rose to the standard of proof required of the appellants. Indeed, the explanation of the appellees that the properties were managed and operated as an integrated unit for economic efficiency and convenience to the parties seems plausible. This is especially so when it is remembered that in addition to the farmlands involved, the undisputed properties included a cotton gin, feed, seed and chemical warehouse and business properties, all of which required a large land base which the combined farming properties provided. Further, some of the family members were able to produce receipts for payments on land issued in their names and other documents where mortgage lienholders had been paid and the satisfied documents were returned to the record title owners and not to Sam Epstein. When Mrs. Epstein died, the probate proceeding of her estate and the estate tax return thereon showed that the family members reported the property title in Mrs. Epstein’s name as having been owned by her at the time of her death.

The trial court heard all of the evidence and was in a position to evaluate the demeanor of the witnesses and followed the developments of the case much better than we can from the cold record and abstract thereof. With the exception of the specific tracts discussed hereinafter, we cannot say that the chancellor’s finding was clearly erroneous and, therefore, with the exception hereinafter described, we affirm. Rule 52 of the Arkansas Rules of Civil Procedure; Ford Motor Co. v. Yarbrough, 266 Ark. 457, 587 S.W. 2d 68; Titan Oil & Gas v. Shipley, 257 Ark. 278, 517 S.W. 2d 210 (1974).

There were four tracts purchased by Sam Epstein during his lifetime, the legal title to which he caused to be registered in the name of his son-in-law, Ben Angel, in addition to his wife and/or daughters. Tracts 1 and 14, containing 235 acres and 501 acres, respectively, were conveyed of record in 1941 to Ben Angel, Sylvia Angel, Melvyn Epstein, Helen Epstein and Ruth Epstein. Tract 4, containing 181.63 acres, was conveyed in 1941 to Ben Angel, Sylvia Angel and Helen Epstein. Tract 76, containing 32 platted lots with lakeside frontage, was conveyed in 1938 to Ben Angel and Sylvia Epstein Angel. The position of Ben Angel is best described by the following quotation from the excellent memorandum opinion of the chancellor:

... Ben Angel had the utmost respect and trust of Sam Epstein, Mrs. Epstein, and each of his two sisters-in-law as well as their respective husbands, and ... this respect and trust have survived him. The record in this case establishes that he was a person of sound business judgment and acumen and of unquestioned integrity, was deserving of the great trust that his family placed in him and was equal to the responsibilities of his position, which might be said was that of patriarch in this family following Sam Epstein’s death. The provision to be discussed immediately below incorporated into his will perhaps characterizes this man’s qualities just referred to.

The first sentence of the provision in Ben Angel’s will described by the chancellor states:

While the entire or undivided interest in the naked legal or record title of the separate parcels of real estate hereinafter identified in this Item Third of my will at my death may be in my name, such parcels of real estate are not owned by me personally and are not to be included in the assets of my estate.

The chancellor found that this provision of Ben Angel’s will was clear, cogent and convincing proof as to Ben Angel’s interest only that he was a resulting trustee; declared Ben Angel’s interest reflected in each of the deeds to be that of an undivided interest in common with the other record title owners and vested that interest in Sam Epstein and his testamentary trust. We agree with the chancellor’s reasoning that the provision of Ben Angel’s will, when taken together with the other evidence, does meet the standard of clear and convincing proof of a resulting trust as to the lands described in his will. We would not limit the trust to Ben Angel’s interest only however.

Since each of the deeds to the four tracts treated Ben Angel in the same manner as the other grantees and since all four of these tracts were handled in precisely the same manner as those tracts referred to as “undisputed properties” we believe that Ben Angel was not the only resulting trustee of these tracts but also all of the record title owners were resulting trustees of these four tracts for the use and benefit of Sam Epstein and after his death for his estate and testamentary trust. Therefore, as to Tracts 1,2, 14 and 76 we hold that legal title should be divested from the record title owners thereof or their successors and vested in the trustees of the Sam Epstein Testamentary Trust to be distributed in accordance with the terms of Sam Epstein’s will as construed hereinabove. With these exceptions, the decision of the chancellor relating to the “disputed lands” is affirmed.

IV.

REIMBURSEMENT OF CAPITAL CONTRIBUTIONS

During the trial, it was shown that certain amounts were treated as capital contributions of the three Epstein daughters toward the operation of the Sam Epstein Testamentary Trust. The chancellor ordered that these capital contributions be returned to the three daughters. This seems an altogether reasonable approach in settling the various accounts of the trust and it is our duty to affirm the chancellor’s action unless we find it clearly erroneous which we do not. Rule 52 of the Arkansas Rules of Civil Procedure.

V.

REMOVAL OF TRUSTEES

The appellants assert that the chancellor erred in refusing to remove Helen Epstein Kantor and Sylvia Epstein Angel as trustees of the Sam Epstein Testamentary Trust. Since the death of Ben Angel, it does appear that, when viewed through the eyes of the appellants, the trustees have managed the trust in such a manner so that it results in benefits to the trustees and their families. Further, it is obvious that there is a great deal of hostility between the Festinger family on the one hand and the Angel family and Mrs. Kantor on the other.

However, the removal of a trustee lies in the sound discretion of the trial court and we cannot say that the chancellor abused his discretion. Blumensteil v. Morris, Executor, 207 Ark. 244, 180 S.W. 2d 107 (1944). The matter should, however, be reviewed by the chancellor on remand in the light of the present situation which may well warrant a neutral trustee.

VI.

MISCELLANEOUS ADDITIONAL ISSUES

There were various other miscellaneous issues raised by the appellants or the appellees on appeal or cross-appeal. Among them are the appellants’ assertion that the trial court erred in dismissing the Becke Ruth Epstein Trust properties from the suit; the appellees’ objection to the court’s holding that the lands acquired by the Sam Epstein Testamentary Trust during its existence were also entailed in the same manner as lands owned by Sam Epstein prior to his death; the appellees’ objection to the chancellor’s allocation of income to the various parties while the lawsuit was pending; and Sam Angel’s objection to the action of the trial court in reducing his salary during the pendency of the lawsuit to the levels that existed prior to the institution of suit. We cannot find that the chancellor’s actions on these points are clearly erroneous and, therefore, affirm the same. Rule 52 of the Arkansas Rules of Civil Procedure.

In cases 80-174 and 80-184, the appellants objected to the actions of the chancellor in selling the cotton gin, the related acreage and improvements thereto and confirming the same while the substantive issues regarding the interpretation of the will and the order of partition were pending in this court under Cause 80-15. Additionally, appellants objected to the minimum sales price (or “upset price”) set by the chancellor as being the minimum amount the trustees were authorized to accept at the sale. In the first place, no order of supersedeas or supersedeas bond has been abstracted by the appellants and we could find no such order or bond in the record. Under Rule 8(a) of the Arkansas Rules of Appellate Procedure, a supersedeas order and bond are necessary to stay any proceedings on the decree or order being appealed from. Additionally, upon a review of the abstract of the pleadings and testimony, we are unable to find that the chancellor’s actions are clearly erroneous. Rule 52 of the Arkansas Rules of Civil Procedure.

Finally, after all briefs had been submitted, but prior to oral argument in this case, the appellants and appellees filed motions to dismiss the appeals and the cross-appeals in Cause 80-15 on the basis of actions taken by the respective parties relating to the sale of the cotton gin and other properties. The points raised by these motions have been rendered moot by the decisions above and are, therefore, denied.

The decision in Cause 80-15 is affirmed in part, reversed in part and remanded to the trial court for proceedings not inconsistent herewith. The decisions of the chancellor in Causes 80-174 and 80-184 are affirmed at the cost of appellants.

Adkisson, C.J., and Holt, J., not participating.

Special Justice Michael Castleman joins in the opinion.

Purtle and Hays, JJ., dissent in part.

Steele Hays, Justice,

dissenting. I respectfully dissent on the grounds that the Order of Chicot County Chancery Court entered September 1, 1964, is now res judicata to the issues there presented and the parties to that order are now barred from raising such issues in this appeal.

The Order of September 1, 1964, specifically provides:

That Helen Epstein Kantor, Sylvia Epstein Angel and Melvyn Epstein Festinger have elected and do elect to continue said Trust until the death of the last one of said beneficiaries under said Will and as the sole surviving heirs at law of Sam Epstein, deceased.

We have long held that consent decrees and consent judgments are res judicata as if entered as a judgment after trial on the merits and, as such, are not subject to collateral attack. Lewis v. St. Louis, I.M. & S. Ry. Co., 107 Ark. 41, 154 S.W. 198 (1913).

In Wooldridge v. Hotze, 215 Ark. 8, 219 S.W. 2d 216 (1949), the deceased died testate in 1909 creating a trust in favor of his three children with the corpus of the trust to be distributed to his grandchildren upon the death of the last surviving child. Provisions were also made whereby the trustee was to create a fund from the estate’s assets for improvements to real property remaining in the corpus of the trust. A dispute arose in 1937 as to how the improvements fund was to be created and administered. The court in that dispute in effect rendered void the provision in the will creating the fund due to apparent impossibility of performance. In 1948, a dispute again arose as to the improvements fund. The trial court held: “The parties all assented to the order entered in 1937 ... all the respective parties to this controversy are bound by said order.” Wooldridge, at 11. On appeal, the Supreme Court affirmed:

We hold that the trial court correctly held that the issues now presented are res judicata by reason of the 1937 decree, supra. Appellants were bound by the decree. It is undisputed that at the time that decision was rendered appellants were parties, consented to that decree, and have acquiesced in the court’s construction of the will for more than 10 years thereafter. Wooldridge, at 12.

In this case the same result is equitable and appropriate. Coincidentally, it is precisely what Sam Epstein wanted his children to do, which no doubt influenced them toward that end.

It is undisputed that Helen Epstein Kantor, Sylvia Epstein Angel and Melvyn Epstein Festinger were parties to the 1964 proceeding. It is equally clear that each enjoyed the benefits of the 1964 order, as beneficiaries of the trust created by Sam Epstein, for a great many years. It is evident that they mutually elected “to continue said Trust until the death of the last one of said beneficiaries ...” and gave that election the formality and sanction of a decree of the chancery court. It is now much too late to hear those parties complain that some other interpretation of Sam Epstein’s will or of the 1964 order should be adopted.

Justice Purtle joins in this dissent.


source: Caselaw Access Project

author: George Rose Smith, Justice. Richard B. Adkisson, Chief Justice,

license: Public Domain

text:
    William P. WHITEFIELD and his Wife v. Burns HAGGART et al
    81-7
    615 S.W. 2d 350
    Supreme Court of Arkansas
    Opinion delivered May 11, 1981

      Carolyn Lee Whitefield, for appellants.

      Smith, Stroud, McClerkin, Dunn & Nutter, by: Charles A. Morgan, for appellees.
   George Rose Smith, Justice.

This is an action by two real estate brokers, Haggart and Owens, to recover a 6% commission from Mr. and Mrs. Whitefield for having found a purchaser for a 10-acre tract owned by the Whitefields. The defendants’ answer to the complaint was a general denial. Upon trial the jury awarded the plaintiffs $1,050, which was just half the amount of their commission. There are several points for reversal, plus a cross appeal, but we affirm the trial court’s judgment in its entirety.

In 1978 the Whitefields orally employed the brokers to find a purchaser for the ten acres, for $35,000. The brokers produced Phyllis Ann McKenzie, who signed a printed form of Offer and Acceptance on December 28. The description the brokers inserted in the form was indefinite: “10 acres more or less . . . owned by Whitefield. Legal to be attached.” There has, however, never been the slightest question about what 10-acre tract was involved. In fact, Whitefield himself, called as a witness by the plaintiffs, testified that he owned no other land at the time. On January 2, 1979, the White-fields accepted Mrs. McKenzie’s offer by signing the Offer and Acceptance, which included this sentence just above the Whitefields’ signatures: “We agree to pay the below named agent a fee of 6% for professional services rendered in securing said offer.” Haggart signed below.

After the signing of the Offer and Acceptance, negotiations looking to the final closing of the sale were conducted by Charles Morgan as attorney for the buyer and by Whitefield’s sister Carolyn as attorney for the sellers. Difficulties arose about the manner of financing the sale, even though the Offer and Acceptance had stated explicitly that the buyer would pay #8,000 in cash and the sellers would carry the balance of #27,000 at 8Vi% interest with specified monthly payments for 15 years, the sellers giving a deed and the purchaser executing a note and deed of trust. The problem seems to have been that the Offer and Acceptance recited that the sellers would furnish title insurance, but the property was actually subject to an outstanding mortgage of about #16,000, payable in installments. That refinancing problem was evidently the responsibility of the sellers, not of the buyer nor of the brokers.

Finally, on January 31, 1979, just before the intended transfer of possession, Miss Whitefield wrote Morgan that “the purported contract ... is in fact not a contract,” that there would be no transfer of any property to the buyer, and that “Mr. Whitefield does not desire to sell any property at this time.” This suit by the brokers followed, with the record indicating that Mrs. McKenzie also brought suit for specific performance.

We consider first the Whitefields’ argument that the jury should have been instructed in substance that the Offer and Acceptance was void because of the indefinite description of the land. That may or may not have been true as between the sellers and their buyer, but the invalidity of the contract is not material to the brokers’ right to recover their commission. In the first place, the Whitefields signed a contract reciting that a legal description would be attached. Whitefield admitted that he had the correct description, which was by metes and bounds. During the negotiations, however, his sister refused to supply the description. Obviously one who employs a broker to sell his land must furnish a legal description; so the omission was not that of the brokers.

In the second place, the brokers would be entitled to their commission even if the description had been bad and the Whitefields had refused to sign the Offer and Acceptance for that reason. A broker’s contract is not within the statute of frauds and need not be in writing. Walthour v. Finley, 237 Ark. 106, 372 S.W. 2d 390 (1963). It is immaterial that the principals do not sign the contract of sale, because the broker earns his commission by producing a purchaser ready, willing and able to take the property on the seller’s terms, even though no enforceable contract of sale is executed. Fike v. Newlin, 225 Ark. 369, 282 S.W. 2d 604 (1955); Reeder v. Epps, 112 Ark. 566, 166 S.W. 747 (1914); Moore v. Irwin, 89 Ark. 289, 116 S.W. 662, 20 L.R.A. (n.s.) 1168, 131 Am. St. Rep. 97 (1909)- Thus there was no occasion for the trial judge to instruct the jury about the validity of the Offer and Acceptance.

Next, the Whitefields argue there is no substantial evidence to support the jury’s finding that the brokers produced a purchaser ready, willing and able to buy the property. It was, however, not necessary for Mrs. McKenzie to tender complete performance, because the sellers put themselves in default when they reneged on their promise by notifying the buyer’s attorney that they did not desire to sell the property. In that situation it was enough for the buyer to indicate her willingness to perform in case of the sellers’ concurrent performance. Loveless v. Diehl, 236 Ark. 129, 364 S.W. 2d 317 (1963). That concurrent performance was never tendered by the Whitefields; to the contrary, they repudiated their obligation.

The proof of Mrs. McKenzie’s being ready, willing and able to buy was clearly sufficient to go to the jury. It is undisputed that she signed the Offer and Acceptance and put up #500 as earnest money. She retained Morgan as her attorney, who worked toward the completion of the sale until Miss Whitefieid abruptly ended the negotiations. The day before that Morgan had written her that Mrs. McKenzie had the $8,000 down payment on deposit. Broker Owens, who was in contact with Mrs. McKenzie, testified that not only was she ready, willing and able to purchase. “She wanted the property as soon as she could get it.” We need not decide whether broker Haggart’s similar testimony was admissible, because at most its admission into evidence was cumulative and harmless error. In short, the plaintiffs made a strong prima facie case on this point, but the Whitefields offered not one word of proof to question Mrs. McKenzie’s readiness, willingness, or ability to buy. Quite the opposite, their acceptance of Mrs. McKenzie’s offer, without questioning her ability to purchase, indicated their satisfaction on that point. Sarna v. Fairweather, 248 Ark. 742, 746, 453 S.W. 2d 715 (1970).

We need not discuss in detail the Whitefield’s arguments about special interrogatories to the jury, a device not extensively used in Arkansas. Both brokers testified that they were licensed as such in Arkansas. There was no dispute about that fact. Even so, the Whitefields insist it was reversible error for the trial judge to refuse to submit an interrogatory requiring the jury to determine whether the plaintiffs were licensed real estate brokers. The far-fetched argument is that the brokers were parties to the action; so their testimony is not regarded as undisputed. The short answer to this argument is that if by some blunder the jury had found that the plaintiffs were not licensed, the trial judge would have been required to set aside the verdict as being against the preponderance of the evidence. Thus the interrogatory would necessarily have been futile.

On cross appeal the brokers argue that upon the undisputed testimony they were entitled to recover the full amount of their commission; so we should increase the judgment to $2,100. That same argument about a jury verdict was rejected in Fulbright v. Phipps, 176 Ark. 356, 3 S.W. 2d 49 (1928), a case that has been followed many times. We do, however, sustain the appellees’ request for an allowance of $417.35 for the cost of their supplemental abstract, which we find to have been necessary. That amount will be taxed as additional costs.

Affirmed.

Holt, J., not participating.

Adkisson, C.J., concurs.

Richard B. Adkisson, Chief Justice,

concurring. Although I concur in the result of this decision, I must disagree with the majority’s unqualified statements that “the invalidity of the contract [for sale of land] is not material to the brokers’ right to recover their commission,” and that “the brokers would be entitled to their commission even if the description had been bad and the Whitefields had refused to sign the Offer and Acceptance for that reason,” and that “the broker earns his commission by producing a purchaser ready, willing, and able to take the property on the seller’s terms, even though no enforceable contract of sale is executed.”

For authority the Court first cites Fike v. Newlin, 225 Ark. 369, 282 S.W. 2d 604 (1955). There the broker arranged a trade of properties between two of his clients, the Fikes and the Hintons, the former to be liable for the broker’s commission. The Fikes raised as one reason for the nonpayment of the commission the fact that the offer and acceptance was unenforceable for lack of the signatures of either Mrs. Hinton or Mr. Fike. Based upon the particular facts of the case the Court there correctly held that an enforceable contract was unnecessary because there was no evidence of detriment to the broker’s principals, the Fikes, who sought to unjustifiably “back out” of the sale. However, there are many cases where the “enforceable contract” element of proof by a broker is prerequisite to his recovery of a commission.

The more complete statement of the rule for recovery of brokerage commissions in such cases is found in the early case of Pinkerton v. Hudson, 87 Ark. 506, 113 S.W. 35 (1908) in quoting from Lunney v. Healey, 56 Neb. 313, 76 N.W. 558, 44 L.R.A. 593 (1898):

[W]here a real estate broker contracts to produce a purchaser who shall actually buy, he has performed his contract by the production of one financially able, and with whom the owner actually makes an enforceable contract of sale. The failure to carry out that contract, even if the default be that of the purchaser, does not deprive the broker of his right to commissions. (Emphasis mine)

The Court went on to find the broker entitled to commissions in Pinkerton, stating: “The sale was closed, so far as appellant [broker] was concerned, when an enforceable contract of that kind [for sale of land] was executed.” (Emphasis mine)

From a careful reading of Pike and Pinkerton it is apparent that to receive a commission the broker must prove (1) that he has produced a person ready, willing, and able to buy under the terms of the brokerage contract, and (2) that his efforts resulted in either a completed sale, a contract of sale susceptible of enforcement by the principal, or an incomplete sale due to the fault of the principal. The reason for this “enforceable contract” element of proof is stated in a quote from Lunney.

In such case the vendor may usually enforce the specific performance of the contract, and he may in any case recover damages for the breach. In either way he gets the advantage of his bargain, and the broker has done all required of him. Such is the generally accepted view.

44 L.R.A. 593, 597.

It is easy to surmise a situation where, through negligence or fraud, a broker would produce the “ready, willing, and able” buyer but include some flaw in the contract of sale, such as an inadequate description of the principal’s land, which would allow the purchaser to back out of the deal and would not allow the principal to gain the benefit of his bargain with the broker because the contract is incapable of being specifically enforced as reasoned in Lunney. This situation should signal caution in extending the rule in Fike to all unenforceable contract situations caused by the ineptness or fraud of a broker who collects his commission leaving the seller saddled with his land and in a position of having to file or defend a suit for fraud or negligence against the broker.

The Reeder and Moore cases cited by the majority (in addition to Fike) both cite the “binding contract” and “enforceable contract” language in the test for when commissions become due.

Here testimony indicates that the purchaser was ready, willing, and able to perform pursuant to the agreed terms regardless of the unenforceability of the contract of sale. The seller, as in Fike, refused to complete the sale thus excusing the necessity of the broker proving an enforceable land sale contract.


author: John I. Purtle, Justice.

text:
    GENERAL TELEPHONE COMPANY OF THE SOUTHWEST v. ARKANSAS PUBLIC SERVICE COMMISSION
    80-307
    616 S.W. 2d 1
    Supreme Court of Arkansas
    Opinion delivered May 11, 1981
    [Rehearing denied June 15, 1981.]

      Ward W. Wueste, Jr., Kent Foster, Beverly Bassett, and Mitchell, Williams, Gill & Selig, for appellant.

      Jeff Broadwater, for appellee.
   John I. Purtle, Justice.

The Public Service Commission approved a rate increase for General Telephone Company of the Southwest in an amount less than that for which General Telephone had applied. On appeal to the circuit court the order of the Commission was affirmed. General Telephone Company of the Southwest appeals from the order of the circuit court to this court on the ground that there was no substantial evidence before the Public Service Commission to support its application of “double leverage” to appellant.

GTSW sought an increase in the intrastate rates, excluding the city of Texarkana, in the amount of $1,893,525. The PSC approved an annual rate increase of $1,498,424. It is not disputed that the PSC used the “double leverage” concept in calculating its cost of common equity capital.

The “double leverage” methodology has been previously approved by this court in Arkansas Public Service Commission v. Lincoln-Desha Telephone Co., Inc., 271 Ark 346 (1980); and Southwestern Bell Telephone Co. v. Arkansas Public Service Commission, 267 Ark 550, 593 S.W. 2d 434 (1980). The question presented to us by the appellant is whether “double leverage” should be applied in their case because of the structure of the parent company which is GTE. It is not disputed that GTE, which wholly owns GTSW, has a number of non-utility corporations in its network of operations. Apparently the public utility portion of the business is more lucrative as the testimony indicated about 86% of GTE income was from public utility companies.

The witness for the PSC selected comparable companies from a list which consisted only of gas and electric utilities. Certainly, it would seem to us that utility companies which are comparable in general to the appellant would be a proper basis for comparison.

In the cases earlier mentioned we set forth the requirements by the courts in reviewing orders of the PSC and defining the methodology of “double leverage.” Therefore, this opinion will be limited to the question brought to this court for resolution, that question being whether there is substantial evidence to support the order of the PSC in this rate case.

We have many times discussed the meaning of substantial evidence. Our rule is always that we view only the evidence most favorable to the appellee in such cases. In this case we will consider only the evidence most favorable to the PSC. In doing this we think the case must turn on the testimony of witness Phillip C. Fry. Mr. Fry is a financial analyst employed by the Arkansas Public Service Commission. Mr. Fry testified as to the manner in which he made his recommendations to’ the PSC. This witness determined that GTSW was entitled to an overall-rate return of 8.5089%. In arriving at this figure he utilized the weighted cost of capital approach whereby the costs of the individual capital components were weighted in relation to their proportion to the total capital structure. The sum of these weighted components cost was that which he applied to the cost of capital to GTSW. Mr. Fry took his comparables from the September 1978 listing of Standard and Poor’s stock guide. The 15 firms he used to determine the rate of return from GTE are shown in Exhibit PF-1, Schedule 8. These companies used as com-parables are broken down further in Exhibit PF-1, Schedule 9. It is difficult to fully appreciate all of the ramifications from the various figures and statistics presented by Mr. Fry as well as those presented by witnesses for the appellant; however, all are valid methods, of obtaining the rate of earnings necessary for the utility to remain competitive. It is the result reached rather than the method used which we consider on appeal.

We are not concerned with the methodology used by the Commission in arriving at the result so long as their finding is based upon substantial evidence. There is no question that “double leverage” is a valid method for obtaining the required rate for utilities. Appellant does not deny that “double leverage” is appropriate but insists that it is an inappropriate and unfair method in a case where the corporation is constituted in the manner of that of GTE. Appellant feels that the use of only utility comparables is unfair. However, we are still bound by the guidelines set forth more than 50 years ago in the case of Bluefield Waterworks & Improvement Co. v. Public Service Commission, 262 U.S. 679 (1923); and as followed some 20 years later in the case of Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591 (1944). Both parties to this action appear to recognize the validity of these landmark cases. It seems to me that the basic holding in the Bluefield case was: This theory was reaffirmed in Hope by the following language:

... A public utility is entitled to such rates as will permit it to earn a return on the value of the property which it employs for the convenience of the public equal to that generally being made at the same time and in the same general part of the country on investments in other business undertakings which are attended by corresponding risks and uncertainties; but it has no constitutional right to profits such as are realized or anticipated in highly profitable enterprises or speculative ventures. ...
... By that standard the return to the equity owner should be commensurate with returns on investments and other enterprises having corresponding risks. That return, moreover, should be sufficient to assure confidence in the financial integrity of the enterprise, so as to maintain its credit and to attract capital. ...

We do not believe that the appellant has shown anywhere that this order by the PSC is contrary to either Blue-field, supra, or Hope, supra. We bottomed at least two prior decisions on these two cases. They were Southwestern Bell Telephone Co. v. Public Service Commission, supra, and Public Service Commission v. Lincoln-Desha Telephone Co., supra. Additionally, we found that the testimony of witness Fry, as supported by exhibits, was substantial evidence; and, therefore, we must affirm the action of the trial court in affirming the order of the PSC.

Affirmed.

Hays and Holt, JJ., not participating.


text:
    Jim HOOD v. Earl CHADICK as County Judge of Jefferson County et al
    81-18
    615 S.W. 2d 357
    Supreme Court of Arkansas
    Opinion delivered May 11, 1981
    [Rehearing denied June 8, 1981.]

      Jones & Petty, for appellant.

      Coleman, Gantt, Ramsay & Cox, by: Martin G. Gilbert, for appellees.
   John I. Purtle, Justice.

The Jefferson County Chancery Court dismissed appellant’s action wherein he sought to enjoin the county from taking his property for the purpose of developing the grounds around the proposed courthouse. Appellant also sought damages he alleged were caused by the threat of the county to take his property.

On appeal appellant argues seven grounds for reversal. We do not find any grounds for reversal and therefore affirm the decree of the trial court.

Appellant owns property across the street from the front of the Jefferson County Courthouse, at the corner of Barraque and Main. His building was constructed in 1892 and has been a landmark in the city of Pine Bluff for a long time. In fact, the structure has been added to the National Register of Historic Places and is qualified for funds from the Arkansas Historical Preservation Commission to refurbish the building. The Jefferson County Courthouse burned in April 1976 and a temporary courthouse was established across town from the original site. However, there was much talk and sentiment about rebuilding the courthouse on its original location. A commission was appointed, and one of the many plans they considered involved closing part of Barraque Street and taking the north one-half of the two blocks on the south side of Barraque Street for parking and landscaping, which would include appellant’s property.

That plan was approved by the City Council on February 9, 1978. However, the City Council decided to refer the matter to the people in an election to be held in November of 1978. Before the election the city withdrew the question from the ballot. Subsequently another plan was developed which would require the acquisition of appellant’s property. This plan was referred to the people in an election held July 17, 1979- The plan was defeated. On July 25, 1979, the county dismissed its condemnation suit which had been filed in response to appellant’s original suit in the matter. Appellant’s suit had sought to enjoin the county judge and the Courthouse Committee from taking his property and for damages for loss of rentals, court costs and attorney’s fees.

The case went on trial on January 9, 1978, on the appellant’s complaint and the chancellor denied the prayer for an injunction but held the case in abeyance to determine appellant’s damages in the event the county actually did take the property. The final decree was entered on July 9, 1980, in which all issues were ruled adversely to the appellant.

Appellant’s points for reversal will not be separated in this opinion because all of them are interrelated. The right of eminent domain of the county is not disputed. Appellant insists the authority to condemn does not extend to property to be used as a parking lot or for beautification. We do not decide that issue because there was no taking at all in this case. There was a condemnation action filed only in response to appellant’s suit for an injunction and damages. However, the appellees dismissed their condemnation action long before the appellant tried the damage portion of his lawsuit.

Appellant relies chiefly upon three cases in support of his claim for damages. The earliest one is Reynolds v. Railway Co., 59 Ark. 171, 26 S.W. 1039 (1894). InReynolds the railroad filed a condemnation suit and placed §2,000 in the register of the court to pay for damages which the landowner might suffer. The railroad dismissed the suit and took back its deposit. Reynolds claimed part of the deposit for damages but the trial court denied his claim. It was affirmed by this court in an opinion which declared that if the railroad acted in good faith in filing the suit and did not enter upon or damage the land, the landowner did not have a right to damages. The deposited funds were properly returned to the railroad. Next, appellant argues Selle v. City of Fayetteville, 207 Ark. 966, 184 S.W. 2d 58 (1944); and Housing Authority of North Little Rock v. Amsler, Judge, 239 Ark. 592, 393 S.W. 2d 268 (1965). In Selle we stated that the city had the right to abandon its action at any stage of the proceeding without the permission of the trial court. We further held that the city could abandon its action even after judgment was rendered, and under the facts of that case no damages or attorney fees were allowed. In Housing Authority we held the landowner could recover from the condemnor when there was an attempt to abandon after a verdict was rendered in favor of the landowner. In Housing Authority we held bad faith or lack of good faith on the part of the condemnor subjected it to liability of damages but the case was returned to the trial court for the purpose of determining whether there was good or bad faith and the damages if proper. Thus, the landowner did not recover in any of the three cases relied upon by appellant.

In the present action appellees never took possession or even entered upon the appellant’s property. No hearing was ever held to determine the damages if appellees were to take the property. Certainly, there is no evidence of bad faith on the part of any of the appellees but to the contra there is much evidence revealing good faith. Even though Housing Authority, supra, is authority for the proposition that the landowner may be entitled to compensation when there has been an abandonment by the condemnor after a verdict for the landowner, the appellant here is still not entitled to recover. There was never a condemnation of his property nor did the appellees enter upon or take possession of his property. No damages are allowable for a mere “threat to condemn.”

Affirmed.

Holt, J., not participating.


author: John I. Purtle, Justice. Steele Hays, Justice,

text:
    Henry Louis DEAN v. STATE of Arkansas
    CR 80-254
    615 S.W. 2d 354
    Supreme Court of Arkansas
    Opinion delivered May 11, 1981

      E. Alvin Schay, State Appellate Defender, by: Jack R. Kearney, Deputy Defender, for appellant.

      Steve Clark, Atty. Gen., by: Arnold M. Jochums, Asst. Atty. Gen., for appellee.
   John I. Purtle, Justice.

After a trial by jury, appellant, Henry Louis Dean, was sentenced to concurrent life terms for kidnapping and rape.

Appellant does not contest that he committed the acts necessary for a conviction, but relies upon his plea of mental defects and maintains that he was not accountable for his actions. Following the close of the State’s case, appellant’s mother testified that her son had a long history of mental disease and had been committed to various mental institutions on numerous occasions during the last five years.

Appellant next called Dr. Pierre Dwyer who had examined appellant during his court-ordered commitment to the Arkansas State Mental Hospital. It was Dr. Dwyer’s opinion that appellant suffered from chronic schizophrenia which was in remission and that appellant’s condition would come and go or recur; he further testified that appellant had been admitted to the state hospital 13 times since 1975 and related to the jury what appellant had told him:

He mentioned that for four times in the past something like this had happened. He mentioned that he maybe could have some control over this if he paid for his sex. He suggested this as a way of managing his problems.

Appellant first argues that the court committed error in not granting a mistrial during cross-examination of Dr. Dwyer by Mr. Crowe, deputy prosecuting attorney, during which the following exchange occurred:

Q. You remember my telephone conversation with you the other day?
A. I was trying to recall it this morning. I can’t recall the specific things that we talked about.
Q. Okay. Let’s — Do you recall telling me in our telephone conversation that the defendant would be very likely to do this sort of thing again?

Appellant’s counsel immediately objected based on insufficient foundation and prejudice and moved for a mistrial. The court sustained the objection, but denied the motion for a mistrial stating:

Ladies and gentlemen of the jury, I am admonishing you at this time to disregard the last question of the prosecutor to the — I think his question was about is he likely to do it again. That has nothing to do with whether or not he’s already done something. You will disregard that question.

Declaring a mistrial is an exceptional remedy to be used only where any possible prejudice cannot be removed by an admonition to the jury. Cobb v. State, 265 Ark. 527, 579 S.W. 2d 612 (1979). The trial court is granted a wide latitude of discretion in granting or denying a motion for mistrial, and the decision of the trial court will not be reversed except for an abuse of that discretion or manifest prejudice to the complaining party. Brown v. State, 259 Ark. 464, 534 S.W. 2d 207 (1976).

The question by deputy prosecuting attorney Crowe did not simply seek to elicit testimony from the witness, but, in effect, made a clear statement of fact amounting to testimony by him under the guise of cross-examination. The statement by Mr. Crowe, a judicial officer, was made for the sole purpose of convincing the jury that if appellant were allowed to remain free there was expert opinion that he would again commit the crimes for which he was then on trial. This testimony by a court official was a flagrant violation of appellant’s right to a fair and impartial trial as guaranteed by the Arkansas and United States Constitutions and was so clearly prejudicial that the error could not be removed by the trial court’s admonishing statement. See Hughes v. State, 154 Ark. 621, 243 S.W. 70 (1922); Sharron v. State, 262 Ark. 320, 556 S.W. 2d 438 (1977).

With regard to appellant’s second assignment of error, we find that the trial judge properly refused to give a requested instruction informing the jury of the possible disposition of persons acquitted by reason of mental disease or defect under Ark. Stat. Ann. § 41-612 (Repl. 1977). See Campbell v. State, 216 Ark. 878, 228 S.W. 2d 470 (1950); Curry v. State, 271 Ark. 913 (1981).

Reversed.

Holt, J., not participating.

Adkisson, C.J., and Hays, J., dissent.

Steele Hays, Justice,

dissenting. This case should be affirmed. In the first place, in denying appellant’s motion for a mistrial the court promptly and firmly instructed the jury to disregard the question. We have repeatedly held that mistrial is an extreme remedy and the wide latitude given the trial court in such matters will not be reversed except in cases of manifest abuse and prejudice. Brown & Bettis v. State, 259 Ark. 464, 534 S.W. 2d 207 (1976). In Limber v. State, 264 Ark. 479, 572 S.W. 2d 402 (1978), we said that mistrial is “a drastic remedy to be resorted to ONLY WHEN THE PREJUDICE IS SO GREAT that it cannot be removed by an admonition to the jury.” [Emphasis supplied.] This case decidedly fails such a test. There was no material prejudice here. As the majority opinion points out, the predilection of the appellant to commit similar acts had already been brought out by the appellant himself, in the testimony of Dr. Pierre Dwyer, in response to questions from counsel for appellant. How, then, can he convincingly argue that he was prejudiced by the prosecutor’s unanswered question to Dr. Dwyer on the same point, improper though it may have been? I view the trial court’s immediate and assertive admonition to the jury to disregard the question, coupled with the explanation to them that the matter had nothing to do with the issue before them, to have cured whatever minimal prejudice might inhere to the question.

We have held, correctly, that where the evidence of guilt is overwhelming, as in this case, and the error harmless, as in this case, reversal is not warranted. Pace v. State, 265 Ark. 712, 580 S.W. 2d 689 (1979). See also, Harrington v. California, 395 U.S. 250 (1969). To burden the county, the trial court, the prosecutor, and the witnesses with another trial of this case on the slender ground relied on serves neither the ends of justice nor any useful purpose. I would affirm.

Chief Justice Adkisson joins in this dissent.


author: Robert H. Dudley, Justice. Darrell Hickman, Justice,

text:
    WOMETCO SERVICES, INC. v. William D. GADDY, Commissioner of Revenues, Department of Finance and Administration
    80-236
    616 S.W. 2d 466
    Supreme Court of Arkansas
    Opinion delivered May 11, 1981
    [Rehearing denied June 22, 1981.]

      Rose Law Firm, P.A., by: Webster Hubbell and Jerry C. Jones, for appellant.

      James R. Eads, Jr., Joseph V. Svoboda, Timothy J. Leathers, H. Thomas Clark, Jr., and Robert J. DeGostin, Jr., by: Cassandra Wilkins-Slater, for appellee.
   Robert H. Dudley, Justice.

Appellant Wometco Services, Inc. is a South Carolina corporation registered and authorized to do business in Arkansas and is a wholly owned subsidiary of Wometco Enterprises, Inc., a Florida corporation. Wometco Services’ officers and directors are not Arkansas residents. It does business in Arkansas as an operator of food and beverage vending machines, and has a Morrilton office run by an Arkansas resident. Its application for a permit to sell cigarettes through vending machines was denied by the Department of Finance and Administration on the basis of Ark. Stat. Ann. §§ 84-4505 (f) (1) and (2) (Repl. 1980). Those sections read:

(1) No license or permit shall be granted to any individual person who is not a citizen and bona fide resident of the State of Arkansas and who has not been domiciled in this State continuously for at least one (1) year next preceding the date of his application for permit.
(2) No license or permit shall be granted to any person, other than an individual person, who has a manager, director, officer, member or principal stockholder who would be ineligible as an individual person to obtain a permit under provisions of this subsection.

Under the statute the residence requirements must be met by each wholesaler, retailer, dealer, salesman or vending machine owner who seeks a permit to sell cigarettes or other tobacco products. Ark. Stat. Ann. § 84-4502 (j) (m) (q) (Repl. 1980).

The circuit court affirmed the denial. On appeal Wometco Services raises three constitutional arguments: The laws violate the Commerce Clause, the Equal Protection Clause, and the Privileges and Immunities Clause of the United States Constitution. It alleges similar violations of the Arkansas Constitution.

The Tobacco Products Tax Act, of which Section 84-4505 is a part, states at Section 84-4503 that its purpose is to “regulate closely the licensing of persons to sell cigarettes and other tobacco products and to impose licenses, fees, taxes and restrictions on the privilege of dealing with, or otherwise doing business in tobacco products. It is declared to be the public policy of this State that the public convenience and advantage ought to be promoted in the granting and issuing of licenses and permits to sell tobacco products.”

Yet, the sole purpose of the act is to provide a system for the collection of taxes. There is no provision in this or any other act in this State relating to the health, safety or welfare of tobacco vendors or purchasers. The sale of cigarettes can affect the public health and therefore might be prohibited or strictly regulated. If we had any such laws in Arkansas, a different question would be presented. For example, we do regulate the sale of alcoholic beverages in minute detail and because of that regulation we have held that the issuance of a license to sell those beverages is a privilege “not of right, but purely of legislative grace, and may be extended, limited or denied without violating any constitutional right.” Blum v. Ford, 194 Ark. 393, 107 S.W. 2d 340 (1937). We regulate parimutuel betting and prohibit it except at a licensed track. The regulation of this privilege caused us to uphold a statute which provided that all officers and directors of greyhound dog tracks must be qualified electors of the State, must have resided in the county where the track is located for at least two years, and had to maintain their residence in that county during their tenure in office. Rogers v. Southland Racing Corp., 247 Ark. 1115, 450 S.W. 2d 3 (1970). We have long regulated dance halls and similar public establishments where juke boxes may lead to unwholesome conditions. Brown v. Cheney, 233 Ark. 920, 350 S.W. 2d 184 (1961), cert. den. 369 U.S. 796 (1962). The Supreme Court of the United States has approved regulation of a privilege where there is a legitimate state interest. For example, a New Orleans ordinance prohibiting pushcart food sales in the French Quarter unless the vendor had eight years’ experience was upheld. City of New Orleans v. Dukes, 427 U.S. 297 (1976).

We do not, however, regulate the sale of cigarettes and other tobacco products in any way that is remotely connected with the public health, safety or welfare. The statute does declare the tobacco business to be a privilege, but that declaration is merely the introduction to the requirement that licenses and permits be obtained by persons engaged in the business. The permits are required, however, simply to make certain that the State collects the taxes levied on cigarettes and other forms of tobacco. Ark. Stat. Ann., Title 84, ch. 45. In the same way, the state requires all retailers subject to the sales tax to obtain a permit, but the only reason for the permit is to insure the collection of the sales tax, not to regulate retailers in general as a matter of public peace, health, morals, or safety.

We simply do not regulate the sale of cigarettes as a public health measure. We have a “fair trade” law authorizing cigarette dealers to fix prices, a statute of doubtful validity. Ark. Stat. Ann., Title 70, Ch. 6 (Repl. 1979); see Union Carbide & Carbon Corp. v. White River Distributors, 224 Ark. 558, 275 S.W. 2d 455 (1955). We have a 1929 statute prohibiting persons from selling tobacco to minors, Ark. Stat. Ann. § 41-2465 (Repl. 1977), but the prohibition is a dead letter as to cigarettes, because any minor can buy them at any vending machine. Those are our only arguable restrictions relating to the sale of cigarettes.

It is fundamental that a statutory classification is permissible only if the differences in the impact of the statute are reasonably related to the purpose of the law. Jacks v. State, 219 Ark. 392, 242 S.W. 2d 704 (1951). There being no such relationship between the collection of cigarette taxes and the residence of the seller, the classification is actually nothing more than a bald effort to exclude nonresidents from engaging in business in Arkansas. That we might regulate the sale of tobacco products is immaterial.

The State may regulate business which affects public health, safety and welfare, but it may not deprive an individual of his right to conduct lawful business unless it can be shown that such deprivation is reasonably related to the State interests sought to be protected. Dent v. West Virginia, 129 U.S. 114 (1889). There is no relationship between the required residency and a valid governmental interest. It is economic protectionism which creates an artificial barrier to commerce and violates the Commerce Clause. The decisions of the United States Supreme Court have given definition to the purposes of the Commerce Clause, and Justice Jackson summarized them in Hood and Sons v. Du Mond, 336 U.S. 525, 537 (1949):

This principle that our economic unit is the Nation, which alone has the gamut of powers necessary to control the economy, including the vital power of erecting customs barriers against foreign competition, has as its corollary that the states are not separable economic units. As the court said in Baldwin v. Seelig, 294 U.S. 511, 527 (1935), “what is ultimate is the principle that one state in its dealings with another may not place itself in a position of economic isolation.”

We can find no justification for a residency requirement to tax the sale of Cigarettes, and hold that the statute constitutes an unlawful discrimination against interstate concerns. It is prohibited by the Commerce Clause of the Constitution of the United States.

The dissenting opinion refers to avoidance of “bootlegging” of tobacco products. There is no proof in the record of “bootlegging” or other illegal sales. There is not even a hint by the appellee Commissioner of Revenues that the appellant Wometco has ever done any wrong. The only reason given to deny this permit is that all of Wometco’s managers, directors and officers are not residents of Arkansas. Quite obviously, if this statute presently is enforced with an equal hand, no large national grocery chain would be allowed to sell cigarettes as this also would violate the statute. § 84-4505 (f).

We hold the statute unconstitutional as it is applied to nonresidents. We do not declare the entire statute unconstitutional as asked by appellant. Clearly, just as with sales tax permits, the State may require that all persons dealing in tobacco products, whether residents or nonresidents, obtain a permit in order to insure collection of the tax.

Reversed.

Adkisson, C.J., Hickman and Purtle, JJ., dissent.

Darrell Hickman, Justice,

dissenting. The majority’s decision is wrong for four reasons.

First, there is no movement of the product in interstate commerce. Wometco sought a license to operate vending machines to sell cigarettes retail, not wholesale. Consequently, the question is reduced to whether a Florida corporation, acting through a subsidiary North Carolina corporation, has a constitutional right to sell cigarettes retail in Arkansas. The statute is unconstitutional only if no reasonable state of facts can be conceived that would justify Arkansas limiting the privilege to sell to Arkansas residents and those corporations principally owned by Arkansans. McGowen v. Maryland, 366 U.S. 420 (1961).

Taxes collected on tobacco products are substantial and the avoidance of such taxes by illicit sales, or “bootlegging,” is a legitimate concern of the state. How are these provisions to be enforced against a nonresident? The statement of the majority that “there is no provision in this or any other act in this state relating to health, safety or welfare of tobacco ... purchases” is incorrect. Ark. Stat. Ann. § 41-2465 (Repl. 1977) reads: “It shall be unlawful for any person, other than the parent or guardian, to give, barter, or sell to a minor under eighteen years of age tobacco in any form or cigarette papers.” Ark. Stat. Ann. § 41-2406 (Repl. 1977) defines such an act as contributing to the delinquency of a minor, a Class A misdemeanor. Arkansas does regulate tobacco sales to some degree. Since there is no movement of the goods in interstate commerce and there is a reasonable justification for the law, the law is not in violation of the Interstate Commerce Clause.

Second, not all laws favoring state residents are unconstitutional. In Exxon Corp. v. Governor of Maryland, 437 U.S. 117 (1978), a Maryland statute was upheld that essentially barred out-of-state producers and refiners of petroleum products from selling gasoline retail in Maryland. The Court stressed the fact that the Commerce Clause “protects the interstate market, not particular interstate firms from prohibitive burdensome regulations.”

In Williamson v. Lee Optical Co., 348 U.S. 483 (1955), the Court upheld an Oklahoma law that severely restricted opticians and favored optometrists and opthalmologists. In doing so the Court laid down the constitutional test regarding state protectionist statutes:

The day is gone when this Court uses the Due Process Clause of the Fourteenth Amendment to strike down state laws, regulatory of business and industrial conditions, because they may be unwise, improvident, or out of harmony with a particular school of thought. . . . For protection against abuses by legislatures the people must resort to the polls, not to the courts. ... The prohibition of the Equal Protection Clause goes no further than the invidious discrimination. [Emphasis added.]

In City of New Orleans v. Dukes, 427 U.S. 297 (1976), the Court upheld a New Orleans city ordinance that favored experienced street vendors over newcomers. In upholding this ordinance the Court said:

When local economic regulation is challenged solely as violating the Equal Protection Clause, this Court consistently defers to legislative determinations as to the desirability of particular statutory discriminations. Unless classification trammels fundamental personal rights or is drawn upon inherently suspect distinctions such as race, religion, or alienage, our decisions presume the constitutionality of the statutory discriminations and require only that the classification challenged be rationally related to a legitimate state interest. States are accorded wide latitude in the regulation of their local economies under their police powers, and rational distinctions may be made with substantially less than mathematical exactitude. ... In short, the judiciary may not sit as a superlegislature to judge the wisdom or desirability of legislative policy determinations made in areas that neither affect fundamental rights nor proceed along suspect lines. [Emphasis added.]

Recently the United States Supreme Court dealt with legislation that favored a Minnesota industry over out-of-state firms. In upholding this law the Court said:

A nondiscriminatory regulation serving substantial state purposes is not invalid simply because it causes some business to shift from a predominantly out-of-state industry to a predominantly in-state industry. Only if the burden on interstate commerce clearly outweighs the State’s legitimate purposes does such a regulation violate the Commerce Clause.

Minnesota v. Clover Leaf Creamery Co., 101 S.Ct. 715 (1981).

When these decisions are applied to the facts before us, it is clear to me that Arkansas can prohibit a Florida corporation from operating through yet another foreign corporation to sell cigarettes retail in Arkansas.

The third reason for disagreeing with the majority opinion is that this case involves a privilege. There is no right to sell cigarettes. States are given wide latitude in regulating privileges; a privilege can be banned altogether. Rodgers v. Southland Racing Corp., 247 Ark. 1115, 450 S.W. 2d 3 (1970); Hinebaugh v. James, 119 W.Va. 162, 192 S.E. 177 (1937).

Finally, the majority’s decision is wrong because it misapplies two of our decisions. In Rodgers v. Southland Racing Corp., supra, we upheld a law that required all officers and all directors of Southland to not only be residents of Arkansas but residents of Crittenden County for two years. In doing so we clearly stated why Arkansas could so act:

The operation of a dog track, with legalized gambling, is unquestionably a privilege which the state might prohibit altogether if it chose to do so. Fortune telling and the sale of intoxicating liquors fall in that same category and may be similarly prohibited ... that being true, the State may impose conditions upon the exercise of the privilege beyond those that might be imposed upon the enjoyment of matters of common right.
Statutes restricting the issuance of liquor licenses to local residents have frequently been sustained. ... Such a statute is a permissible exercise of the State’s police power.

Later we upheld a law that denied any nonresident the right to operate “juke boxes.” Brown v. Cheney, 233 Ark. 920, 350 S.W. 2d 184 (1961), cert. denied 369 U.S. 796 (1962). Juke boxes are hardly a great factor in the health, safety or welfare of Arkansans. The General Assembly simply decided that a license to operate a juke box was a privilege that should be taxed. We upheld the law. Contrary to the majority’s statement, there is no “regulation” of juke boxes in Arkansas related to health, welfare or safety. In doing so we said:

It is significant we think that our legislature, without successful challenge, has many times favored residents over nonresidents in regulating certain privileges, such as: The manufacture and sale of wine (Ark. Stats. § 48-110); Retail beer dealers (§ 48-515); Fur dealers (§ 47-202); The taking of mussels (§ 47-601, C.), and The practice of optometry (§ 72-806).
Appellant’s contention that Act 120 violates Article 2, §§ 2, 3, 18, 19 and 29 of the State Constitution has been examined and found without merit. Section 2 deals with inalienable rights — not with privileges; Section 3 refers to discrimination based on race or color; Section 18 refers to discriminations between citizens or class of citizens; Section 19 refers to monopolies; and, Section 29 deals with rights retained by the people. We are unable to see how any of the above sections are related to or are violated by Act 120.

The majority too easily ignores the statutes, our decisions, and the United States Supreme Court decisions. The majority decision simply cannot be squared with the facts or the law.

I respectfully dissent, finding the Arkansas law constitutional as it is presumed to be.

Adkisson, C.J., and Purtle, J., join in this dissent.


author: Steele Hays, Justice.

text:
    MILORD and BLANKS, Trustees v. ARKMO LUMBER & SUPPLY CO.
    80-295
    615 S.W. 2d 349
    Supreme Court of Arkansas
    Opinion delivered May 11, 1981

      Wayne R. Foster, for appellants.

      Homer Tanner, for appellee.
   Steele Hays, Justice.

Appellee filed suit below to impress a materialman’s lien for repairs to appellants’ church. The court awarded judgment in rem against the building in the amount of $6,871. The only question raised on appeal is whether the statute allowing such liens against churches, Ark. Stat. Ann. § 51-631, was repealed by implication.

The facts of this case are not in dispute. Appellee furnished materials to the Big T Roofing and Gutter Co., Inc., for use in construction of a new roof for the church building. Big T did not furnish a bond to appellants as required by Ark. Stat. Ann. § 51-633 (Repl. 1971). Appellants paid Big T the contract price for the roof, but Big T filed in bankruptcy without paying appellee. This suit resulted.

Prior to 1911 our case law held churches and charitable institutions were exempt from materialmen’s liens. See Eureka Stone Company v. First Christian Church, 86 Ark. 212, 110 S.W. 1042(1908). In 1911 the legislature passed Act 446, Ark. Stat. Ann. §§ 51-627 to 631 (1947). Section 1 of this act provided for performance bonds to prevent the attachment of materialmen’s liens generally; Sections 2 and 3 dealt with performance bonds in the case of public buildings; Section 4 provided for performance bonds for churches and charitable institutions to cover indebtedness incurred by the contractor for labor or material furnished in construction or improvement. The issue here concerns Section 5 of the act:

Such bond shall be filed in the office of the clerk of the circuit court in the county in which the property is situated, and any person to whom there is due any sum for labor or material furnished, or his assigns, may bring an action on said bond for the recovery of said indebtedness; provided, that no action shall be brought after six [6] months from the completion of said church, hospital, orphanage, or charitable institution, or benevolent institution; provided further, that if said bond is not filed, as above provided, that all persons performing labor or furnishing material, except the principal contractor shall have a lien upon said property for the unpaid amount of his claim.

Thus, the legislature created the right to impress a materialman’s lien against a church. This section was codified as Ark. Stat. Ann. § 51-631 in the 1947 Statutes and continued essentially unchanged for forty years.

In 1953 the legislature passed Act 351 which made some changes in the existing materialmen’s lien law as it related to performance bonds, such as the amount of the bond and the size of contract to which the bond requirement attaches. The repealing clause of the act, Section 8, listed Sections 1, 2 and 4 of the 1911 act as being repealed, as well as several other sections of other acts. It also provided that all other laws or parts of laws in conflict with the act were repealed thereby. Section 5, quoted above, was not in this list of sections repealed. The 1953 act, Ark. Stat. Ann. §§ 51-632 to 638 (Repl. 1971), has no provision for a lien to attach against a charitable institution if the bond requirement is not met. Appellant contends that Section 5 of the 1911 act was repealed by implication, and consequently no authority exists for a materialman’s lien to attach to a church, prior case law having denied such liens. Appellants also point to the 1971 replacement volume in which the compiler omitted this Section 5, Ark. Stat. Ann. § 51-631, stating it appeared to be “obsolete” with the repeal of Section 4, which created the bond requirement. They also contend that the language of § 51-633 that “No contract . . . shall be entered into . . .” without such bond deprives the Court of jurisdiction to impose liens upon appellants’ building under these statutes, “its jurisdiction being restricted to that of proceeding on the bond. ...”

We do not agree. Repeals by implication are not favored in the law. As stated in Forby v. Fulk, Judge, 214 Ark. 175, 214 S.W. 2d 920 (1948):

... To produce this result, the two acts must be upon the same subject and there must be a plain repugnancy between their provisions; in which case the latter act, without the repealing clause, operates to the extent of repugnancy, as a repeal of the first. Or, if the two acts are not in express terms repugnant, then this latter (later) aci must cover the whole subject of the first and embrace' new provisions, plainly showing that it was intended as a substitute for the first. ...

We find neither test has been met here. The provision allowing a lien in the absence of the bond, in the earlier act, is not repugnant to the 1953 act which makes a bond requirement for entering into a contract. The earlier act also used mandatory language in reference to the bond. Nor does the later act “plainly show” it was intended as a substitute, covering the entire subject. The fact the repealing clause of the later act lists specific sections of the 1911 act, omitting others, rather than repealing the entire act is not compatible with an inference of intent to repeal. Furthermore, there is a presumption the legislature did not intend to overturn a long-standing legal principle unless the intent to do so is clearly expressed. 73 Am. Jur. 2d, Statutes, § 181 (1974). The right to a lien against a charitable institution had been in existence from the time of the 1911 act, and we cannot say there was a sufficiently clear expression of legislative intent to repeal this section.

Furthermore, it is significant that in 1963 the legislature enacted Act 66, dealing with mechanics’ and materialmen’s liens and making specific reference to Ark. Stat. Ann. § 51-631 a clear indication that the legislature regarded Section 5 as not repealed, or even “obsolete,” but still in effect. See also South Central District Pentecostal Church v. Bruce-Rogers, 269 Ark. 130, 599 S.W. 2d 702 (1980), which involved such a lien.

Thus we hold the legislature has not impliedly repealed the provision of Ark. Stat. Ann. § 51-631 permitting materialmen’s liens against churches in the absence of a bond. This remedy is still available and we affirm the trial court in so holding.