text:
    George A. BRADSHAW v. MOTORS INSURANCE CORPORATION and CIM INSURANCE CORPORATION
    77-355
    566 S.W. 2d 134
    Opinion delivered May 22, 1978
    (Division II)

      Noel F. Bryant, of Brockman, Brockman & Gunti, for appellant.

      Barber; McCaskill, Amsler, Jones & Hale, for appellees.
   George Howard, Jr., Justice.

The basic question to be resolved is whether there is substantial evidence to support the trial court’s holding that appellees effectively canceled an insurance policy extending comprehensive and collision coverage on a pickup truck owned by appellant by simply substituting another policy which is not materially different from the first policy, except an increasement in premium and is designated as a commercial policy whereas the first policy is characterized as a policy for family use. Of course, if the answer is in the affirmative, we must affirm, while on the other hand, if the answer is in the negative, we must reverse.

THE FACTS

On June 10, 1974, appellant purchased a 1974 GMC pickup truck from Homer Cogbill of Star City, Arkansas. Appellant made application for insurance coverage providing for comprehensive and collision protection. The coverage dated from June 10, 1974, to June 10, 1975, and the annual premium of $127.00 was paid in full at the time the application was made. The policy was returned to appellees’ agent, Homer Cogbill, who countersigned the policy and delivered it to appellant. The Bank of Star City was designated as a party in interest in view of the fact it was the lienholder having financed the purchase of the vehicle.

On August 14, 1974, appellees’ underwriting department sent appellant a letter stating that a substituted policy was being written inasmuch as appellees had information to the effect that appellant was using his truck for commercial or business purposes and, consequently, the substituted policy being written was based on commercial rates requiring an additional premium of $85.00. A few days later, appellant received another communication from appellees containing a bill for the additional $85.00 premium. The statement also provided that if there was any question about the matter, appellant should call the local branch office collect. Appellant immediately called the Little Rock office of appellees where a representative advised appellant that the additional $85.00 premium charge was being assessed because appellant’s truck was used as a commercial vehicle. Appellant’s response was “A. I told her I did not . . . and I did not need it . . . any commercial insurance on it.”

Appellant further advised the representative that his vehicle was not being used for commercial purposes, but was simply used as transportation to and from his place of employment.

Appellant subsequently received the substituted policy. However, appellant refused to pay the additional premium although he had received approximately three written demands from appellees and continued to retain possession of the initial policy.

On December 26, 1974, appellees mailed to appellant a notice of cancellation of the substituted policy stating that the policy would be canceled effective January 15, 1975, unless the additional premium in the sum of $85.00 was received on or before January 15, 1975.

On February 21, 1975, appellant’s vehicle was involved in an accident and was rendered a total loss. Appellant made demand upon appellees for payment, but appellees refused to honor the claim, contending that the first policy was canceled by substitution of the second policy and the second policy was canceled for nonpayment of premium.

On June 17, 1976, the appellees, pursuant to an agreement with the Bank of Star City, paid to the Bank of Star City the sum of $3,654.40 as satisfaction of the outstanding indebtedness owed to the bank by appellant on the vehicle. The Bank of Star City executed an assignment of its rights to the installment transaction with appellant for the purchase of the vehicle to appellees pursuant to the subrogation provision contained in the substituted insurance policy.

Appellant filed suit against appellees for damages sustained as a result of the total loss to his pickup truck. Appellees filed a counterclaim for the money paid to the Bank of Star City pursuant to the subrogation provision in the substituted policy.

HOLDING OF THE TRIAL COURT

The trial court, sitting without a jury, rendered the following decision:

1. The trial court found that the first policy of insurance was effectively canceled and that the appellant accepted the second policy of insurance.
2. That appellees properly canceled the substituted policy which became effective January 15, 1975.
3. That appellees were entitled to a judgment against appellant on its counterclaim in the sum of $3,-654.40, the amount paid by appellees to the Bank of Star City.

APPELLANT’S CONTENTIONS FOR REVERSAL

1. The trial court erred in finding that the initial policy, a family policy, was effectively canceled by the substitution of a commercial policy.
2. The trial court erred in holding that appellees were subrogated to the rights of the Bank of Star City against appellant under the security agreement the Bank of Star City received for financing the purchase of the vehicle for appellant.

THE DECISION

We are persuaded that appellant’s contention that the trial court committed error in holding that the initial policy, a family policy, was effectively canceled by the substitution of a commercial type policy has merit and we, accordingly, reverse the trial court.

In relevant part and which is germane for a resolution of the issue at hand, the initial policy regarding the right and procedure to be pursued by appellees-insurers in cancelling the policy are as follows:

“This policy may be canceled by the company by mailing to the insured . . . written notice stating when not less than twenty days . . . thereafter such cancellation shall be effective; provided that,
(1) if the named insured fails to discharge when due any of his premium obligations in connection with the payment of premium for this policy or any installment thereof, whether payable directly to the company or its agent or indirectly under any premium finance plan or extension of credit,
(2) or, if this policy has been in effect less than sixty days ... at the time notice of cancellation is mailed and this is not a renewal policy, . . .
this policy may be canceled by the company by mailing to such insured written notice stating when not less than ten days thereafter such cancellation shall be effective.
15. CANCELLATION BY COMPANY LIMITED

After this policy has been in effect for sixty days ..., the company shall not exercise its right to cancel the insurance unless:

(1) the named insured fails to discharge when due any of his obligations in connection with the payment of premium for this policy or any installment thereof, whether payable directly to the company or its agent or indirectly under any premium finance plan of extension of credit; or
(2) the driver’s license of the named insured or of any other operator who either resides in the same household or customarily operates an automobile insured under this policy has been under suspension of revocation . . . during the policy period:
provided that the company shall have the right to modify any physical damage coverage afforded by this policy ... by inclusion of a deductible not exceeding $100 ...”

The original policy also contains the following significant provision:

“Class 1 Means: There is no male operator under 25 years of age, the automobile is not used for business, other than driving to or from work.” (Emphasis added)

In Vol. 17, Couch on Insurance, 2d, p. 415, § 67:40, it is provided, in pertinent part, as follows:

“The substitution of one policy for another, whether with the same or a different insurer, is to be distinguished from the mere canceling of a policy. Where the substitute policy is issued by the same insurer, the act of substituting the policy is in effect the manifestation of mutual consent to the termination of the original policy. . . .” (Emphasis added)

In Vol. 6A, Appleman, Insurance Law and Procedure, p. 605, § 4194, appears the following:

“An insurance policy is in effect canceled when another policy is substituted for it. But to have such effect, the insured must have consented to the cancellation and the substitution of the later for the earlier policy. ...” (Emphasis added)

It is clear from the evidence in this case that appelleesinsurers made a unilateral decision to substitute the original policy delivered to appellant by preparing and forwarding to appellant a commercial policy sixty-four days after the initial policy had been in full force and effect. Appellees have characterized this action in two fashions. First, as a substitution and secondly, as an act of cancellation of the first policy. Thus, appellees-insurers’ posture in this regard is essentially that substitution and cancellation are indistinguishable. But the difficulty we have in accepting appellees-insurers’ posi-, tion is threefold in scope, aside from rejecting the theory that, substitution and cancellation are one and the same. Indeed, the substitution of one policy by another is to be distinguished from the mere cancelling of a policy.

First, the original policy makes no reference to any authority being afforded appellees to make a substitution.

Secondly, the substitution of an existing policy which has the effect of cancelling a prior policy dictates mutual consent on the part of the policyholder and the insurer, unless there is a provision in the policy authorizing unilateral action of substitution on the part of the insurer.

Thirdly, the initial policy delineates and provides expressly the steps that appellees-insurers must pursue in cancelling effectively the policy. For example, the original policy could be canceled by the insurer by mailing to the insured a written notice that cancellation would become effective within twenty days where the named insured failed to discharge his obligation for the payment of the premium; or the policy could be canceled by the company by simply mailing to the insured written notice stating when, not less than ten days after receipt of the notice, such cancellation would become effective without giving any reason whatsoever for cancelling the policy. In addition, paragraph 15 of the first policy provides that after the policy has been in effect for sixty days, the company shall not exercise its right to cancel the insurance coverage unless the insured fails to pay his premium or the insured’s driver’s license or any other operator who either resides in the same household with the insured or customarily operates the vehicle of the insured has been suspended or revoked during the policy period.

Inasmuch as it is virtually conceded by appelleesinsurers that the policy guidelines for cancellation were not pursued, the conclusion is inescapable that there has been no cancellation within the terms of the policy.

In Commercial Union Fire Insurance Company v. King, 108 Ark. 130, we stated:

“. . . But this right of cancellation, where a policy has been fairly entered into and has taken effect, can be exercised only because it is reserved in the policy, and can only be exercised as it is there provided. ” (Emphasis added)

In The Home Insurance Company v. Hall, 192 Ark. 283, we made the following observation:

“The cancellation clause in the contract of insurance existing between appellant and appellee gave to the insurer the undoubted right to cancel the policy by strictly complying with its provisions(Emphasis supplied)

The most that can be said with reference to appelleesinsurers’ action in executing and forwarding to appellant the commercial policy is that appellees-insurers made an offer to appellant to cancel the family policy by the substitution of the commercial policy which was not accepted by appellant. It is uncontradicted that upon receipt of the commercial policy, appellant immediately communicated with the local representative of appellees and made it clear that he did not need or desire the second policy. In addition, appellant insisted, during his telephonic conference with the representative, that his vehicle was not used for commercial purposes, but, on the contrary, was used as transportation to and from his place of employment and that this use was authorized under the original policy. In spite of appellant’s persistence in rejecting the commercial policy and stating emphatically that his vehicle was not engaged in commercial activities, appellees took no steps either to determine whether appellant desired the commercial policy, or to determine objectively if, in fact, appellant was engaged in commercial activity. Moreover, appellant refused to pay the additional premium billed to him.

Appellees-insurers argue that inasmuch as appellant has acknowledged that he received the commercial policy and retained possession of it and, in addition, instituted action against appellees-insurers on both the original and the second policy, appellant is precluded from asserting lack of “mutual consent” as a defense to the attempted substitution of the commercial policy. Appellees-insurers’ argument is not impressive as appellees-insurers recognize, as they must, this argument flies in their face inasmuch as appellant retained the original policy and, moreover, appellees-insurers never requested or demanded surrender of the original policy. The retention of the original policy by appellant supports his argument that he never intended to accept the commercial policy as a substitution.

Relative to appellees-insurers’ argument that appellant’s action on the original policy and the commercial policy supports its argument is likewise unimpressive inasmuch as the record sustains a conclusion that where an insurer unilaterally attempts to substitute an original policy and the original policy is not effectively canceled, the result is that there are two policies in force: the new policy intended as a substitution and the original policy not effectively canceled.

We conclude that appellees’ offer to cancel the original policy by way of substitution of a commercial policy was nugatory inasmuch as appellant rejected the offer.

We find it is not necessary to deal with appellant’s second contention in view of the position we have taken in dealing with appellant’s first contention.

Reversed and remanded.

We agree.

Harris, C.J., and Byrd and Hickman, JJ.

      The substituted policy specifically deleted towing and labor charges which were covered under the initial policy. Otherwise, the two policies are essentially the same.

      Because of a clerical error which occurred in the Little Rock Office of appellees, the name of the Bank of Star City as lienholder was omitted from the substituted policy. Consequently, the Bank of Star City never received notice of the cancellation of the substituted policy and appellees felt that it was obligated under these circumstances to pay the bank the balance remaining under the installment contract the bank had with appellant.

      It is clear from the evidence that the first policy was a class 1 policy.

      The record reflects that sometime after the original policy was delivered to appellant, appellees-insurers concluded from a credit report that appellant’s truck was used commercially. It is clear that appellees did not consult appellant directly about the matter.


source: Caselaw Access Project

author: George Howard, Jr., Justice.

license: Public Domain

text:
    SECURITY BANK v. FIRST NATIONAL BANK
    77-368
    565 S.W. 2d 623
    Opinion delivered May 22, 1978
    (Division II)

      Branch & Thompson, for appellant.

      Cathey, Goodwin & Hamilton, for appellee.
   George Howard, Jr., Justice.

We are to decide whether the trial court’s holding that a deed of trust executed by Gene Prater and Shirley Prater, his wife, on November 13, 1974, whereby their home was to secure a promissory note in the sum of $16,000.00 representing a loan as purchase money for their home, also secures business loans made to Gene Prater individually, prior and subsequent to the loan of November 13, 1974, is supported by a preponderance of the evidence.

THE FACTS

On November 13, 1974, Gene Prater and Shirley Prater, his wife, executed a deed of trust to First National Bank of Paragould, Arkansas, hereinafter referred to as First National, offering the following described real property, which is their personal dwelling, to secure a promissory note which was also executed by both of the Praters and is also dated November 13, 1974, in the amount of $16,000.00:

That part of the Northeast Quarter of the Southeast Quarter of Section 9, Township 17 North, Range 6 East as described as follows: Beginning at the Southeast corner of said tract; run thence West 321.5 feet to the West right of way of State Highway 1, the true point of beginning, run thence North 31 degrees 10 minutes East along said West right of way of said Highway 210 feet, run thence North 81 degrees 50 minutes West 395 feet, run thence South 31 degrees 10 minutes West 275 feet, run thence East 425 feet to the true point of beginning, containing 2.0 acres, more or less.

The deed of trust was duly filed for record in the office of the ex-officio recorder in and for Greene County, Arkansas.

The deed of trust contains the following provision which is located immediately below the description of the property:

“This trust deed secures not only the indebtedness hereinafter described but any other indebtedness now or hereafter owing by the parties of the First Part, or either of them, to the party of the Third Part at any time prior to the release or foreclosure of this instrument. If any default be made with respect to the indebtedness hereinafter described or any other indebtedness secured by this trust deed, then the party of the Third Part may, at its option, declare all indebtedness due and payable at once.”

On June 14, 1976, Gene Prater, individually and doing business as Prater’s Electrical and Wiring Company, executed a note to First National in the amount of $39,546.81. This note was a composite of a series of notes executed by Gene Prater individually. The first note of the series of notes was in the amount of $2,500.00. As security for this first note, First National received a security agreement on a Tappan Heat Pump. The security agreement, as well as a lien statement, were duly filed for record; a second note involving the sum of $28,000.00 was executed by Gene Prater individually, and First National received as collateral for this note certain business equipment; a third note in the sum of $6,600.00 was secured by two gas and electric cooling units and two heat pumps; a fourth note in the amount of $5,000.00 and dated November 15, 1974, was secured by a $1,000.00 certificate of deposit and a 1972 Econoline Ford Van; and a fifth note in the amount of $2,200.00 was secured by 75 sheets of .26 gauge sheet metal. The latter designated notes were all signed individually by Gene Prater and were to secure business debts.

On October 19, 1976, appellant, Security Bank, extended a $10,000.00 loan to Gene and Shirley Prater which was evidenced by a promissory note. This note was secured by a second mortgage on the home of the Praters. The mortgage given to Security Bank likewise contains a clause stating that the mortgage would also “secure the payment of any indebtedness now due or that may become due the Mortgagee by the Mortgagor or either of them up to the foreclosure of this instrument.”

On September 17, 1976, the Praters secured a second loan from Security Bank in the amount of $1,499.76 for the purpose of putting down a well at their home. This loan was evidenced by a promissory note. On February 14, 1977, the Praters acquired a home improvement loan from Security Bank in the amount of $4,532.04 in order to construct a carport.

On March 29, 1977, First National instituted foreclosure action on the note and deed of trust executed by Gene Prater and Shirley Prater jointly on November 13, 1974, and on the note of June 14, 1976, executed by Gene Prater individually and doing business as Prater’s Electrical and Wiring Company. First National alleged that the Praters were in default with their payments and that First National was entitled to a judgment on the note of November 13, 1974, with a balance remaining of $14,315.68, and the sum of $38,367.68 representing the unpaid principal and interest on the note of June 14, 1976, a decree of foreclosure and also a decree declaring that First National’s judgments possessed priority status to any claims of Security Bank. Security Bank was also made a party-defendant to the action.

Security Bank filed its answer admitting that Gene and Shirley Prater had executed and delivered a mortgage to Security Bank involving the lands described in First National’s complaint securing an indebtedness of $10,000.00. However, Security Bank denied that the note executed by Gene Prater on June 14, 1976, to First National was entitled to priority status over its mortgage by virtue of the “dragnet” provision or “other indebtedness clause” contained in the deed of trust executed to First National. Moreover, Security Bank further denied that the loans extended to Gene Prater individually and evidenced by the note of June 14, 1976, bore any relationship to the original debt on the home of the Praters as secured by the deed of trust to First National on November 13, 1974. And, as a consequence, all of Security Bank’s claims have priority over the note of November 13, 1974, to First National.

Security Bank also filed a cross-complaint for foreclosure on the mortgage that it received from the Praters on October 19, 1976, alleging that as a consequence of the foreclosure action instituted by First National against the Praters, Security Bank’s interest in the real property in question was in jeopardy. Security Bank prayed for a judgment in the amount of $10,492.18 which represented the present balance due under the note executed by the Praters on October 19, 1976, a judgment for the balance due under the note executed by the Praters on September 17, 1976, in the amount of $1,178.17, and on the note executed February 14, 1977, with a balance due in the amount of $3,855.02.

HOLDING OF THE TRIAL COURT

The trial court found that the note executed by Gene Prater and Shirley Prater on November 13, 1974, and the note executed by Gene Prater individually on June 14, 1976, in the sum of $39,546.81, including interest and in addition thereto, an attorney’s fee, were secured by the deed of trust of November 13, 1974, by reason of the “other indebtedness clause”. In other words, the notes held by First National took priority over the notes executed jointly by Gene Prater and Shirley Prater to Security Bank.

However, the court awarded a judgment to Security Bank on the note dated October 19, 1976, interest as well as attorney’s fees and a judgment on the note of September 17, 1976, and the note of February 14, 1977. The court found that all of these notes were secured under the second mortgage given by the Praters under the “other indebtedness clause.”

THE DECISION

We deem it advisable, at the outset, to deal with an inquiry made on the part of the trial court as to the standing of Security Bank to challenge the priority status claimed by First National for those notes executed by Gene Prater individually for his business venture and as evidenced by the note of November 13, 1974.

Appellee argued strenuously that Gene and Shirley Prater did not file an answer to First National’s complaint and as a consequence, were in default. Therefore, the Praters, for all practical purposes, had admitted or it is established that it was the intention of the parties that First National’s deed of trust would secure the business debts of Gene Prater. In this regard, the trial court made the following observation in its opinion:

“. . . In this case here, the borrowers raise no defense at all and there is a question in my mind as to whether or not the second lender here, the Security Bank as to whether or not they can raise the defenses that the Praters may raise in regard to this loan with First National Bank.”

We hold that Security Bank had standing to raise and litigate the question of the priority of the note executed by Gene Prater individually to First National on June 24, 1976. Priority status conferred on the note ofjune 14, 1976, indeed, meant the difference between Security Bank receiving a repayment on the indebtedness of the Praters and receiving only a part or none at all. It is clear, from the record, that whatever proceeds are derived from the sale of the real property will not be sufficient to pay off the obligations due both First National and Security Bank.

Under our civil code, substance is preferred over form in procedural matters. Consequently, to hold that Security Bank did not have standing to raise the issue of priority would in effect elevate form to the lofty position of substance.

Moreover, First National has not demonstrated how it has been prejudiced by permitting Security Bank to raise the defenses asserted. It must be remembered that Shirley Prater was a joint owner of the homestead and she did not sign any of the business obligations of Gene Prater. It would appear that the posture taken by Security Bank in this action is a position that may be characterized as common to both the Praters and Security Bank. Security Bank’s interest was, indeed, real and vital. We, therefore, conclude that Security Bank had standing to assert the defenses raised by it in this case.

Turning now to the fundamental issue involved, in American Bank & Trust Co. v. First National Bank of Paris, 184 Ark. 689 (1931), 43 S.W. 2d 248, we said, inter alia:

“One may execute a valid mortgage to secure a debt to be contracted in the future . . . but, in order to do so, there must be an unequivocal agreement in the instrument itself that it is given for debts to be incurred in the future . . .
“ ‘The effect of our cases is that a mortgage to secure future advances ... is valid, but, if such purpose is intended to be accomplished, that fact must clearly appear from the instrument, and such purpose will not be presumed where the instrument does not contain a general description of the indebtedness secured so as to put one who examines it on notice that this was its purpose in order that such person may pursue the inquiry which such knowledge would suggest.’ . . .
“The circumstances attendant upon the execution of the mortgage and the nature of the transaction subsequent thereto are always matters of consideration in determining the effect of the mortgage, and, as these circumstances and the language of the instruments vary ...” (Emphasis added)

In Hendrickson v. Farmers’ Bank & Trust Company, 189 Ark. 423, 73 S.W. 2d 725, we said:

“As suggested by our early cases, in the construction of a mortgage the real question is, ‘what was the intention of the parties to the mortgage?’ In determining this all the circumstances attendant upon the execution of the mortgage and the nature of the transaction itself are to be considered; . . . and, in order to extend the intention of the parties beyond the primary purpose of the mortgage so as to secure the payment of debts other than those specifically mentioned, from our decisions and principles of natural justice the following rule may be deduced: where a mortgage is given to secure a specific debt named, the security will not be extended as to antecedent debts unless the instrument so provides and identifies those intended to be secured in clear terms and, to be extended to cover debts subsequently incurred, these must be of the same class and so related to the primary debt secured that the assent of the mortgagor will be inferred. The reason is that mortgages, by the use of general terms, ought never to be so extended as to secure debts which the debtor did not contemplate. ...” (Emphasis supplied)

In considering the circumstances involving the execution of the deed of trust by Gene and Shirley Prater to First National on November 13, 1974; the note of June 14, 1976, executed by Gene Prater individually and doing business as Prater’s Electrical and Wiring Company, and the purpose for which the funds were used, and the circumstances surrounding the negotiation and granting loans by Security Bank to the Praters, as evidenced by notes dated October 19, 1976, September 17, 1976, and February 14, 1977, we are of the view that the deed of trust of November 13, 1974, executed to First National by the Praters does not secure the prior and subsequent loans made to Gene Prater individually and as evidenced by the note of June 14, 1976. Consequently, the holding of the trial court giving priority status of the note of June 14, 1976, over the note executed by the Praters to Security Bank is not supported by a preponderance of the evidence and, accordingly, we reverse the trial court.

It is clear from the evidence that the $16,000.00 indebtedness created by the Praters on November 13, 1974, was a joint obligation payable to First National for purchase money towards the Prater’s home. While on the other hand, the note of June 14, 1976, in the sum of $39,546.81 was a composite of a series of loans made by Gene Prater individually for business obligations. Shirley Prater did not execute any of these instruments. Moreover, First National took a security agreement on personal property used by Gene Prater in his business venture as collateral for these indebtednesses. It is obvious that these business loans are not of the same class as the obligation created by the Praters in connection with the purchase of their home. Nor were the business indebtednesses created by Gene Prater specifically described or designated in any way in the deed of trust that First National relies upon as affording it security for these business debts.

Appellee argues that its deed of trust, which expressly contains a provision securing additional or future advances, to either of the Praters, even up to the time of the foreclosure of the document, was duly filed for record; that during a telephonic conference, appellant’s representative had been told of the extent of the Praters’ debts with First National and that appellee was looking to security provided by the trust deed for the payment of these debts, and, consequently, appellant was put on notice. We are not impressed with this argument inasmuch as the recorded deed of trust made no reference to the business debts of Gene Prater. Moreover, there was not even a marginal entry specifying the extent of these business obligations or the purpose for which they were made.

Relative to the actual notice or advice offered by appellee to Security Bank during the telephonic conversation, the record reflects the following:

Max Redwine, loan officer for First National, testified as follows:

“Q. You never told him that you were going to look to any security in that home mortgage in that telephone conversation except that first $16,000.00 note, did you? .
“A. I told him just exactly what I said the first time, that we had other indebtednesses involved.
“Q. And that was the sum and substance of it, you had other indebtednesses involved and you advised him not to make the loan.
“A. I advised him not to proceed with the loan. That’s correct.
“Q. Now you didn’t talk about equity in any way, shape, form or fashion in that conversation, did you?
“A. I don’t believe I used the word, ‘Equity.’
“Q. And that was simply advice to Mr. Bland and not any conversation in relation to equity or anything else, isn’t that true?
“A. Well, that’s essentially correct.”
Mr. Redwine further testified as follows:
“Q. At no time, Mr. Redwine, did you or any member of the bank come up and endorse on the margin the mortgage you took and introduced into evidence, these additional debts you now claim, did you?
“A. No, sir.”

Brenda Williams, note teller at First National, testified as follows:

“Q. And in truth and in fact, you didn’t discuss any equity in that house and you didn’t tell Herb Bland nor this girl that the Security Bank was claiming these business debts under this home mortgage, did you?
“A. No, sir.”

Herbert Francis Bland, Vice President of Security Bank, testified as follows:

“Q. Who did you talk to?
“A. I talked to Max Redwine.
“Q. All right, would you, just as you could, relate to us what you remember happening or being said in that conversation?
“A. He indicated that they had a mortgage on the house, a debt against the house of $14,000.00 and something.
“Q. Did you ask him what the payoff was against the house?
“A. I asked him what the balance was.
“Q. What did he tell you?
“A. $13,000.00 or $14,000.00, then he also told me that they had an additional debt down there at the bank but it was on the business.
“Q. They had an additional debt but that it was on the business?
“A. Yes.
“Q. At any time during this conversation did Mr. Redwine tell you that the bank was looking to that home as collateral for the business debts?
“A. No.”

The trial court in holding adversely to Security Bank relied principally upon our case Benton State Bank v. Reed, 240 Ark. 704, 401 S.W. 2d 738. Benton is to be distinguished from the instant case. In Benton, it is clear that all of the loans involved were for business purposes and, consequently, were of the same class. Moreover, it is clear in Benton that all of the notes evidencing the business indebtednesses were executed by both the husband and wife who were the joint owners of the business.

Reversed and remanded for proceedings not inconsistent with this opinion.

We agree.

Harris, C.J., and Byrd and Hickman, JJ.

      It appears from the evidence in this case that the whereabouts of the Praters are unknown.


author: George Howard, Jr., Justice. Carleton Harris, Chief Justice, John A. Fogleman, Justice,

text:
    Felton ADAMS v. STATE of Arkansas
    CR 77-226
    566 S.W. 2d 387
    Opinion delivered May 22, 1978
    (In Banc)
    [Rehearing denied June 26, 1978.]

      Robert F. Morehead, for appellant.

      Bill Clinton, Atty. Gen., by: Joseph H. Purvis, Asst. Atty. Gen., for appellee.
   George Howard, Jr., Justice.

The Truckers’ Inn on Highway 79 North in Jefferson County was robbed by a lone black gunman on April 1, 1977. Some 16 hours later, appellant, Felton Adams, was arrested. A dirty, white bank bag (money bag) was found in his pocket at the time of the arrest. Marzella Williams, an employee at Truckers’ Inn, identified appellant as the robber. Furthermore, some fingerprints taken from a cup at the Truckers’ Inn that the robber had used immediately prior to the robbery were identified as appellant’s. The bank bag was identified as being similar to the one used in the robbery.

From a judgment entered upon a jury verdict finding appellant guilty of a charge of aggravated robbery and also on a charge as an habitual criminal, appellant appeals raising numerous issues for reversal.

During closing argument, the prosecuting attorney made the following statement before the jury:

“. . . To convict him (the defendant) you don’t have to disbelieve any part of their case, because what did the defense, how many witnesses did the defense put on for your consideration?” (Emphasis supplied)

It is well settled that comment on the failure of a defendant to testify in a criminal case is violative of the Self-Incrimination Clause of the Fifth Amendment to the United States Constitution which is applicable to States by the Fourteenth Amendment to the United States Constitution. Malloy v. Hogan, 378 U.S. 1 (1965); Griffin v. California, 380 U.S. 609 (1965).

In Miller v. State, 239 Ark. 836, 394 S.W. 2d 601 (1965), the defendants did not testify in the case. Over objections, the Court instructed the jury that it was the privilege of the defendants to testify in their own behalf or to decline to testify. In his argument to the jury, the prosecuting attorney specifically called this instruction to the attention of the jury, repeated it and said: “You are instructed, this is a privilege to them to either testify or not to testify. That is what the Court says in that instruction.” We said, in Miller, “Obviously, by arguing this instruction to the jury in that manner, attention was called to the fact that defendants had not taken the stand in their own behalf. This was error.”

In Evans & Foust v. State, 221 Ark. 793, 255 S.W. 2d 967, we said:

“Our law wisely provides failure of a defendant to testify shall not create any presumption against him. The prosecuting attorney should carefully refrain from using any words or gestures which would be calculated to call a jury’s attention to the fact that a defendant has not testified.”

It is readily apparent from what we have said in the two cases just cited, a defendant’s privilege not to testify and the prohibition imposed on the state to refrain from using any words calculated to call a jury’s attention to the fact that a defendant has not testified, makes this privilege a fundamental constitutional right and when this right has been violated by an over zealous prosecuting attorney, prejudice is presumed and an instruction from the trial court cannot eliminate the damage which has already occurred. Consequently, the granting of a request for a mistrial is the only solution to correct the prejudicial error.

In an effort to cure the prejudicial remarks by the prosecuting attorney, the trial court, after objection and request of counsel for appellant, gave the following instruction, but the instruction merely reemphasized the fact in the minds of the jurors that the defendant had not testified:

“THE COURT: In the event the jury didn’t understand the instructions, I will paraphrase it by saying the burden is on the State to prove that the defendant is guilty beyond a reasonable doubt. The defendant didn’t request, but I will instruct you at Mr. Morehead’s request that the defendant is not required to testify. He may do so if he likes, but you are not to take that into consideration in arriving at your verdict in this case, neither does the defendant have to call any witness on his behalf unless he wants to. You are not to consider that as evidence against the defendant. Go ahead.”

It is apparent that in light of the prosecuting attorney’s comment the jury could have surmised appellant’s failure to testify was an admission of guilt. Thus, the exercise of a constitutional right could have been damaging evidence against the appellant. The state contends that the judge’s charge, as set out above, cured any harmful effect of the comment. It is conceded that the trial judge may have done all he could under the circumstances, his charge, however, only would have vindicated the adverse effect of a comment with respect to appellant’s duty to take the stand. The judge’s charge did not cure the adverse inference the jury could have drawn on the issue of guilt or admission of guilt.

The error complained of here by appellant is a denial of a right guaranteed against invasion by the Fifth and Fourteenth Amendments to the United States Constitution and appellant is entitled to be free from penalties or sanctions that may have been influenced by his failure to testify in his criminal trial. Chapman v. California, 386 U.S. 18, 87 S. Ct. 824 (1967).

In Chapman v. California, supra, the United States Supreme Court said, among other things:

“. . . [BJefore a federal constitutional error can be held harmless, the court must be able to declare a belief that it was harmless error beyond a reasonable doubt.” See also: Fahy v. State of Connecticut, 375 U.S. 85.

We cannot say, from reviewing this record, that the error complained of was harmless beyond a reasonable doubt, or that there is not a reasonable possibility that the remarks complained of on the part of the prosecuting attorney might have contributed to appellant’s conviction, accordingly, we reverse on this ground only.

We recognize, as we must, that there exists some inconsistency in our cases dealing with the extent and latitude to which a prosecuting attorney is permitted in arguing to the jury the posture of the state’s case or in summarizing the evidence when a defendant has failed to take the witness stand in his own behalf. In Harris v. State, 260 Ark. 646, 543 S.W. 2d 459, we found that the following statement did not constitute prejudicial comment upon appellant-defendant’s failure to testify:

“Possession? You heard the three agents get on this stand and say that the hundred pounds of substance was taken from these two defendants out there on Cato Springs Road on April 29th, 1974. There has been absolutely no testimony to contradict that. I don’t think that is even an issue at this point. ...” (Emphasis supplied)

We do not consider the statement “There has been absolutely no testimony to contradict that” as prejudicial comment upon appellant-defendant’s failure to testify, inasmuch as counsel for appellant-defendant, indeed, was afforded the opportunity to cross-examine all of the state’s witnesses for the purpose of developing any inconsistencies or contradictions. Therefore, if counsel for appellant-defendant discovered no contradictions in the state’s case, indeed, the prosecuting attorney had every right to call to the jury’s attention that there existed no contradictions in the state’s case. We cannot visualize any valid objection to a remark of this nature when it cannot be construed as calculated to call a jury’s attention to the fact that a defendant has failed to take the witness stand.

On the other hand, the remarks of the prosecuting attorney in the instant case, namely, “Ttf convict him, (the defendant) you don’t have to disbelieve any part of their case, because what did the defense, how many witnesses did the defense put on for your consideration?” can be characterized only as calling to the jury’s attention that appellant had not taken the witness stand to testify.

We emphasize that an expression on the part of the prosecuting attorney attributable to the weight to be given to the evidence as distinguished from an expression or gesture indicating to the jury that the defendant has not taken the witness stand does not offend the posture taken by the Court today in this case. Evans & Foust v. State, supra; Miller v. State, supra.

We have carefully reviewed the other points asserted by appellant for the reversal of his conviction and we are persuaded that such claims are not meritorious and, accordingly, we find no error in these asserted claims. We make this observation in order to avoid any misunderstanding as to the Court’s position on these issues in the event of a retrial of this case.

Reversed and remanded.

Harris, C.J., and Fogleman, J., dissent.

Carleton Harris, Chief Justice,

dissenting. I cannot agree that this case should be reversed because of the prosecuting attorney’s comment to the jury, which the majority state called attention to the fact that appellant Adams did not testify.

Before discussing the remark made by the prosecutor, there is, off-hand, a reason why this case should not be reversed, whatever the prosecutor’s remark. I refer to the fact that the defendant’s counsel requested the court to tell the jury that the defendant was not required to testify, and the court complied with the request, explaining that a defendant may testify if he likes, but is not required to do so, and that fact is not to be taken into consideration in arriving at a verdict in the case. In Russell v. State, 240 Ark. 97, 398 S.W. 2d 213, we thoroughly discussed when it is proper for a court to give this instruction, and when it is improper. We said:

“None of the three accused took the witness stand. The court, despite the objections of defense counsel, told the jury that the accused had the right to testify or not to testify and that their failure to do so was not evidence of guilt and was not to be considered by the jury. This is a familiar instruction. When the accused asks that such a charge be given it is reversible error for the court to deny the request. Cox v. State, 173 Ark. 1115, 295 S.W. 29 (1927). When, however, the accused objects to such an instruction, a different situation is presented.

Accordingly, it would have been reversible error for the court to refuse the instruction after defendant’s counsel requested it! In such event, I can’t see how the State can win — the case is reversed by giving the instruction — and it would be reversed if it had not been given. Not only that, but it is certainly most unusual to reverse a judgment because of error committed at the request of a defendant.

As to the actual remark made, I repeat the statement of the prosecutor because I intend to compare it with numerous other statements where the same contention (that such statements called attention to the jury that the defendant did not testify) was made, and this court found no error. Here, the prosecuting attorney said:

“. . . To convict him, (the defendant) you don’t have to disbelieve any part of their case, because what did the defense, how many witnesses did the defense put on for your consideration?”

In the first place, a defendant frequently offers several witnesses, whether he testifies himself or not, and the statement made, to me, simply has reference to a lack of witnesses offered (no witnesses were offered by the defense).

To compare a few other cases where the same identical contention was made, let us first look at Harris v. State, 260 Ark. 646, 543 S.W. 2d 459. There, the prosecuting attorney, in argument, stated:

“Possession? You heard the three agents get on this stand and say that the hundred pounds of substance was taken from these two defendants out there on Cato Springs Road on April 29th, 1974. There has been absolutely no testimony to contradict that. I don’t think that is even an issue at this point. They possessed it; a hundred pounds — Approximately one hundred pounds — ”

It was argued that the italicized statement constituted prejudicial comment upon appellant’s failure to testify, but we found no merit in this contention.

In Sims v. State, 258 Ark. 940, 530 S.W. 2d 182:

“Appellant objected to the prosecuting attorney’s reference to testimony as uncontradicted and undenied, as a comment on defendant’s failure to testify, and moved for a mistrial. Overruling the objection and refusing to declare a mistrial was not error.”

In Shaddox v. State, 244 Ark. 747, 427 S.W. 2d 198, objection and motion for a mistrial were based on the contention that certain remarks amounted to a comment on the appellant’s failure to take the witness stand. The statement objected to was as follows:

“ * * * Now, how could even, how could these fine attorneys for the defense reasonably argue to you that he did not intend to inflict serious harm upon Younes, he said he did. He said ‘Johnny, Blankety-blank I’ll kill you.’ And nobody has attempted to explain that away^ in fact, I guess they couldn’t.”

We held that no error had been committed.

In Davis v. State, 96 Ark. 7, 130 S.W. 547, a prosecutor’s remarks that the defendant had told two witnesses how he had administered medicine to produce an abortion, followed by the statement that, “* * * it is undisputed and undenied and he cannot deny it,” were expressions of opinion as to the weight of the testimony of the witness which could not be construed as a reference to the fact that the defendant had not testified.

In Culbreath v. State, 96 Ark. 177, 131 S.W. 676, the opinion reflects:

“Another ground urged for reversal is as to alleged improper remarks of an attorney representing the State in his closing argument. The following are the objectionable remarks: ‘Where was the defendant that day? He has never seen fit to say. He has not shown by any one where he was between the hours of 10 o’clock in the morning and 1:30 in the afternoon.’ Taking the whole statement together, we do not think it can fairly be construed as a comment or criticism on defendant’s failure to testify in his own behalf or as calling attention to that fact. It was merely an expression of the opinion of counsel that the defendant had not adduced evidence accounting for his whereabouts during the hours named. We conclude that there was no prejudicial error in the remarks.”

A statement by a prosecuting attorney asserting that a conversation by a defendant was unexplained and undenied by anyone and calling on “them” to explain it, if untrue, was held to be an expression of opinion that the testimony, not being rebutted, should be accepted as true and not a comment on the failure of the defendant to testify. Davidson v. State, 108 Ark. 191, 158 S.W. 1103.

When a prosecuting attorney referred to a coat of an alleged accomplice which had been found in a defendant’s car and asked, “What explanation have they made of that?”, this court said that this argument was not a comment on the defendant’s failure to testify. Cascio v. State, 213 Ark. 418, 210 S.W. 2d 897, cert. den. 335 U.S. 845.

In Edens v. State, 235 Ark. 996, 363 S.W. 2d 923, also a case where the defendant offered no proof, a statement by a prosecuting attorney in closing argument that the State’s evidence was undenied was said by this court to be a contention that the testimony should be believed because it was uncontradicted.

In Hammond and Evans v. State, 244 Ark. 1113, 428 S.W. 2d 639, it was contended that certain remarks of the prosecuting attorney before the jury amounted to a comment upon the failure of appellants to testify. During his closing argument, the prosecutor made the following statements, and those that were contended to be-prejudicial are italicized:

“The proof’s in here that the McDougal boy admitted it, and the proof’s in here that the other boy, or Jerry Hammond, or Jerry ‘Fish’ Hammond, admitted it. And it’s uncontradicted and it’s undisputed.
“Now then, what does that bring us down to just purely and simply? We just have no other — there’s no alternative. It’s inconceivable to me of anything other than guilty on burglary, without question. There is even an inference when you’ve found stolen property and the possession of it is not explained. That’s not enough to put you in the penitentiary itself; but, that alone is inference of your guilt. You say, ‘Well, it might happen to me. They might catch me with it.’ You’re going to answer pretty quick where you got it, where you bought it, and what you did with it. We have no such explanation. * * *
“Is he guilty? or is he innocent? If he’s guilty, then talk about the sentence. If there’s extenuating circumstance, then, sure, take into consideration the minimum. That’s why — that’s what minimum sentences are for, if there’s extenuating circumstances. I know of none here. None has been called to your attention here. None has been told you here. ”

In a rather comprehensive discussion, the court held that none of the remarks were a comment upon the defendants’ failure to testify and stated:

“Actually, much stronger statements have been held to not constitute a comment upon the failure to testify.”

In Moore, Frazier, Davidson v. State, 244 Ark. 1197, 429 S.W. 2d 122, the prosecuting attorney, in the course of his closing argument, made the following statements:

“The case was ‘uncontradicted and undenied’; l will leave that because the record is bare; There is nothing else in here except the testimony and proof of the sheriff; There has been no proof as to who (certain equipment) belonged to, the testimony was that nobody would claim it, nobody has acquired it, nobody has come here today to acquire it; and if I was picked up with (the equipment introduced into evidence), there would .be some explanation of what it was doing in my car and what I was doing with it.”

This court stated:

“We feel that the expressions are all attributable to the weight to be given to the evidence, and that in no instance was the jury’s attention called to the fact that appellants failed to testify.”
In Ferrell v. State, 177 Ark. 742, 9 S.W. 2d 15, where the defendant failed to testify, the prosecutor stated:
“Now, gentlemen, we just want to be fair. If I knew Frank Ferrell was innocent in this crime, but the circumstances, gentlemen of the jury, that we have introduced here before you have not been denied.”

We found no error.

In Langston v. State, 184 Ark. 687, 43 S.W. 2d 231, the prosecuting attorney remarked:

“The fact that Burley Tyler bought the liquor from the defendant has not been denied, and his testimony stands unimpeached.”
No error!
In Markham v. State, 149 Ark. 507, 233 S.W. 676, the prosecuting attorney used the following language:
“ ‘We find the five leaving the mill and going in the direction of the still. None of them denied that they went to the still but Perry Franklin.' [My emphasis.] The appellants objected to the argument of the prosecuting attorney and asked that the jury be instructed not to consider it for the reason that ‘it was a direct reference to the failure of the defendants to testify. ’ The court overruled the objection and appellants duly excepted. The jury returned a verdict of guilty against the appellants and fixed their punishment at one year in the penitentiary. * * *
The remarks of the prosecuting attorney should not be construed as a comment upon the failure of the appellants to testify, and hence these remarks do not contravene the provisions of our statute to the effect that the failure of an accused to testify shall not create any presumption against him.”

The case of Miller v. State, 239 Ark. 836, 394 S.W. 2d 601, cited by the majority, is clearly distinguishable, for there, over objections, the court instructed the jury that, it was the privilege of the defendants to testify in their own behalf or to decline to testify, and the prosecuting attorney, in arguing the case, specifically called this instruction to the attention of the jury, and even repeated it. Obviously, attention was directly called to the fact that defendants had not taken the stand in their own behalf.

It is apparent from the cases cited that much stronger remarks have been made than the simple little remark made in the instant case, but this court found no error. It is inconceivable to me that this case is being reversed, and to me, this reversal has the effect of overruling the cases mentioned, and numerous others that I do not have time to cite.

I consider that the majority opinion will very much handicap a prosecutor in his argument to the jüry, and in fact, places him in a position where he really cannot know what can be validly said.

I would affirm.

Fogleman, J., joins in this dissent.

John A. Fogleman, Justice,

dissenting. I fully agree with the dissenting opinion of the Chief Justice and join in it. I also take issue with the majority assertion that there are inconsistencies in our cases relating to arguments of the nature of that made in this case that must be resolved. Resolution of inconsistencies is an important responsibility of a court of last resort. The strained attempt of the majority to distinguish Harris v. v. State, 260 Ark. 646, 543 S.W. 2d 459, is a poor demonstration of inconsistency. I submit that the alleged inconsistency in our cases is an illusion. See Hall, The Bounds of Prosecutorial Summation in Arkansas, 28 Ark. Law Rev. 55, 72 and cases cited in the dissenting opinion by Harris, C.J.; Annot., 14 ALR 3d 723, 757, §9; 773, § 15; Supp. 1977, p. 34, § 10.

Of course, a prosecuting attorney should not comment on a defendant’s failure to testify. But for an advocate to be prohibited from pointing out that no witness testified except those presented by the state, as a basis for eliminating reasonable doubt and as a factor in determining the weight to be given that evidence, is extreme and Unnecessary. See 14 ALR 3d 723, 729, § 3, Practice Pointers. It reads something into the Fourteenth Amendment that isn’t there. 1 fear that it means that a prosecuting attorney cannot ask a jury to accept even an isolated statement by one witness because no one denies it, when dozens of people could if it were untrue.

It is all very well to relegate the prosecuting attorney into the role of a minister of justice in some stages of the prosecutorial process, for he must act in a quasi-judicial capacity. But in closing argument to a jury, his role as an advocate completely overshadows any other role. Then he is society’s — the people’s — only advocate. Sending him into the arena shackled, hamstrung and gagged destroys his ability to act as such, at a time when society’s need for strong advocacy was never greater.

      In view of the fact that the majority opinion is predicated on the self-incrimination clause of the 5th Amendment to the United States Constitution, applicable to states by the 14th Amendment, it is interesting to note that certiorari was denied by the court in this case. See 393 U.S. 1063.


author: George Rose Smith, Justice.

text:
    Jesse FOXWORTH v. STATE of Arkansas
    CR 78-20
    566 S.W. 2d 151
    Opinion delivered May 30, 1978
    (Division I)

      Q. Byrum Hurst, Jr. and Nanette B. Sullins, for appellant.

      Bill Clinton, Atty. Gen., by: Joseph H. Purvis, Asst. Atty. Gen., for appellee.
   George Rose Smith, Justice.

Foxworth appeals from convictions upon two counts charging possession and delivery (by sale) of heroin. The jury fixed the sentences at five years each, which were ordered by the judgment to run consecutively. The several contentions for reversal disclose no prejudicial error.

There was no denial of a speedy trial. The case was set for trial well within the time allowed by Rule 28 of the Rules of Criminal Procedure. A few days before the scheduled trial Foxworth assaulted his counsel, which led them to ask for permission to withdraw. The court’s action in ordering a continuance to allow Foxworth to obtain other counsel was certainly a delay “for good cause” within Rule 28.3 (h).

No evidence was offered to show either that the amount of bail was excessive or that the defendant’s confinement without bail deprived him of the effective assistance of counsel.

The State’s proof was to the effect that on both the occasions that were involved an undercover agent of the police telephoned Foxworth and arranged for the purchase of heroin at a specified washateria. On the first occasion Foxworth and Janelle Hamilton drove up to the washateria together, and Ms. Hamilton made the actual sale. On the second occasion only Ms. Hamilton came to the washateria and made the sale. It is immaterial that Foxworth did not take part in the actual sales, for the jury could readily infer that he and Ms. Hamilton were acting together. Her statements in the course of the transactions were admissible as being stalements of a co-conspirator. Rule 801 (d) (2) (v) of the Uniform Rules of Evidence, Ark. Stat. Ann. § 28-1001 (Supp. 1977); Bosnick v. State, 248 Ark. 846, 454 S.W. 2d 311 (1970).

Upon a related evidentiary point the trial court is not shown to have been in error in admitting a tape recording of the conversation in which the undercover agent made arrangements with Foxworth for the second purchase of heroin. It is argued that the agent was incapable of consenting to the taping of the conversation, because he urgently wanted a “fix” of heroin, and that the agent was not sufficiently shown to be able to recognize Foxworth’s voice on the telephone. Both arguments relate to preliminary questions of fact about the admissibility of the evidence. Such questions are to be determined by the trial judge, under Uniform Evidence Rule 104. We cannot say that the trial judge abused his discretion in admitting the tape recording.

There is no merit in the argument that the testimony of the undercover agent and of another witness for the State was inadmissible because they had been promised a measure of immunity in return for their testimony. Such a matter goes to the weight of a witness’s testimony, not to its admissibility. Zachry v. State, 260 Ark. 97, 538 S.W. 2d 25 (1976).

Finally, it is not shown that Foxworth received an especially heavy sentence merely because he is black. Although two white witnesses who testified for the State received lighter sentences, they entered negotiated pleas of guilty and were sentenced by the trial judge. Foxworth elected to plead not guilty and was sentenced by thejury. Those differences in the surrounding circumstances are abundantly sufficient to explain the differences in the sentences. For that matter, no explanation of the differences is required, for thejury were free to impose whatever sentence they thought to be just. Apart from the bare fact that Foxworth is black and the other two defendants are white, there is not the slightest basis in the proof for supposing that color had any bearing upon the comparative severity of the sentences.

Affirmed.

We agree: Harris, C.J., and Fogleman and Holt, JJ.


author: John A. Fogleman, Justice.

text:
    Bernard PERRY v. BALE CHEVROLET CO.
    77-402
    566 S.W. 2d 150
    Opinion delivered May 30, 1978
    (Division I)

      Jewel Brown, of Brown & Pruitt, P.A., for appellant.

      Friday, Eldredge & Clark, by: George Pike, Jr., for appellee.
   John A. Fogleman, Justice.

The question on this appeal is whether the trial court abused its discretion by granting a default judgment against appellant on appellee’s complaint filed March 17, 1977. Summons was duly issued. It was served on appellant Bernard Perry on March 22, 1977. Perry tendered a handwritten answer on the 19th or 20th day after service but the clerk of the court refused to accept it because it was not typewritten in compliance with the procedural rules of the Pulaski Circuit Court on file in the office of the clerk of this court. Perry then filed a typewritten answer one day after the maximum period allowed by Ark. Stat. Ann. § 27-1135 (Repl. 1962). Bale Chevrolet Company, the plaintiff, moved for a default judgment. Appellant responded alleging that rendering default judgment under the circumstances would result in injustice or oppression.

Appellant supported his response by his affidavit that he had been in communication with representatives of appellant and that it had been generally agreed that the case would be dismissed before the last day for filing his answer, but, after he had called appellee’s representative about the 18th day after service and learned that appellee had not advised its lawyer to dismiss the suit, he had attempted to file the handwritten answer on the following day. This affidavit was not controverted. The court held that the appellant had failed to show that his failure to file timely answer was due to excusable neglect, unavoidable casualty or other just cause as required by Ark. Stat. Ann. § 29-401 (Repl. 1962) to avoid ;the entry of a default judgment. Under the peculiar circumstances of this case, we disagree and reverse the judgment. Pertinent circumstances are the appellant’s understanding that the suit would be dismissed without his being required to answer, his prompt action in tendering a handwritten answer and the filing of a typewritten answer only one day late.

Default judgments are not the favorites of the law, and we have found substantial compliance by a defendant with procedural requirements to be sufficient to avoid the harshness of a default judgment in several instances. Winters v. Lewis, 260 Ark. 563, 542 S.W. 2d 746. For example, we have held that: when a responsive pleading should have been in the hands of the clerk within the time allotted for answering, had the clerk’s office not been closed for a five-day holiday period, the plaintiff was prevented from filing a timely answer by unavoidable casualty or misfortune, Cummings v. Lord’s Art Galleries, 227 Ark. 972, 302 S.W. 2d 792; when there was a basis for confusion as to the time for answer because of difficulty in characterizing a pleading as a counter-claim or cross-complaint, the failure to file an answer within the time required to answer a counterclaim when it was timely for answering a cross-complaint could be excusable neglect, Easley v. Inglis, 233 Ark. 589, 346 S.W. 2d 206; when an attorney filed answers to interrogatories on the last day for filing answer and left the clerk’s office under the impression that he had also filed an answer he had taken there with him, and answer was filed two days late, after the defendant’s attorney had been advised that the answer had not been filed and had found copies of the answer, but not the original, in his files, the letter and spirit of Ark. Stat. Ann. § 29-401 (Repl. 1962) required the setting aside of a default judgment granted after the tardy answer was stricken. Barkis v. Bell, 238 Ark. 683, 384 S.W. 2d 269; when a defendant’s attorney appeared and made a verbal motion for an order to have a plaintiff examined by a physician and plaintiff’s attorney stated his client would be submitted for examination, and the filing of a motion was unnecessary, and the case was then set for trial by agreement, the failure to file a pleading until 22 days after the service of summons came under “excusable neglect” or “other just cause,” Fitzwater v. Harris, 231 Ark. 173, 328 S.W. 2d 501.

Under the circumstances of this case, we hold that the filing of a typewritten answer only one day late was attributable to excusable neglect or other just cause.

The judgment is reversed and the cause remanded.

We agree: Harris, C.J., and Hoi.t and Howard, JJ.


text:
    STATE of Arkansas v. William OSBORN
    CR 77-229
    566 S.W. 2d 139
    Opinion delivered May 30, 1978
    (Division I)

      Bill Clinton, Atty. Gen., by: Jesse L. Kearney, Asst. Atty. Gen., for appellant.

      Bill E. Ross, for appellee.
   John A. Fogleman, Justice.

Pursuant to Rules 16.2 (d) and 36.10, Rules of Criminal Procedure [Ark. Stat. Ann., Vol. 4A (Repl. 1977)], the state appeals from the granting of appellee’s motion to suppress evidence obtained by a warrantless search of the mobile home which was the dwelling of appellee William Osborn. The trial court held that the search was illegal and that the controlled substance (marijuana) seized as a result of the search should be suppressed, along with statements made by Osborn when confronted with the fruits of the search, as evidence obtained in violation of appellee’s constitutional rights. We find no reversible error and affirm.

On July 27, 1977, at approximately 10:45 p.m., Mrs. Iva McKinestry notified the Osceola Police Department, by telephone, that there had been a burglary at the mobile home next door to the McKinestry residence. Officer Nunnery was dispatched to the scene where he found Mr. McKinestry standing beside the Osborn mobile home. Mr. McKinestry advised Nunnery that the burglar (who was known to McKinestry) had come out of the trailer with a sack in his hand, that McKinestry had apprehended the burglar in an attempt to hold him until the police arrived, and that the burglar had broken loose and gone back into the mobile home and then had come back out without the sack and fled the scene. McKinestry’s statements to the officer corroborated the information given him when he was dispatched to the scene by radio. Nunnery had called by radio for assistance and Lt. Ramey had been called.

The state contends that the marijuana was lawfully seized as a result of an inadvertent discovery of it in plain view by Officer Nunnery from a position in which he was lawfully entitled to be, or in the course of a lawful activity. The state submits that the merits of this appeal will turn upon the question whether a law enforcement officer investigating a crime at a private residence without a warrant is authorized to enter that residence in order to investigate and secure the crime scene. The state relies solely on Ark. Stat. Ann. § 19-1705 (Repl. 1968) as authority for such an entry by a police officer. That section makes it the duty of a police officer “to suppress all riots, disturbances and breaches of the peace, to pursue and arrest any person fleeing from justice . . ., to apprehend any and all persons in the act of committing any offense against the laws of the State . . ., and at all times to diligently and faithfully enforce such laws, ordinances and regulations for the preservation of good order and the public welfare.” Under this statute, says the state, it was the duty of the officer (Nunnery) to immediately and without undue delay secure the crime scene, search for and apprehend any burglary suspects still on the scene, seek out and provide aid for any citizen within the mobile home who may have been assaulted or bound by the burglars and search for further evidence of the crime. We do not view the issue as being quite so narrow, but as we see it, the evidence does not support this view, unless the evidence, viewed in the light most favorable to the state, is given its strongest probative force. That is not the appropriate approach.

We have never stated our standard for appellate review of the trial court action granting or denying motions to suppress evidence obtained by means of a warrantless search. Although the substantial evidence rule has been followed by this court in nearly every instance of review of any fact finding by a circuit judge, even on questions pertaining to admissibility of evidence, there has been at least one outstanding exception since our decision in Harris v. State, 244 Ark. 314, 425 S.W. 2d 293, cert. den. 393 U.S. 941, 89 S. Ct. 308, 21 L. Ed. 2d 278. We then decided that we would make an independent determination of the voluntariness of a confession as a basis for its admission into evidence, giving respectful consideration to the findings of the trial judge on the critical issue. This review was crystalized into a standard articulated in Degler v. State, 257 Ark. 388, 517 S.W. 2d 515 and followed thereafter. See, e.g., Smith v. State, 259 Ark. 849, 537 S.W. 2d 158. We have also extended it to at least one other situation pertaining to admissibility of evidence. See Hammers v. State, 261 Ark. 585, 550 S.W. 2d 432.

Pursuant to Degler, we make an independent determination based upon the totality of the circumstances, but will not set aside a trial judge’s finding of voluntariness unless it is clearly against the preponderance of the evidence. In this approach, we have given considerable weight to the findings of the trial judge in the resolution of evidentiary conflicts. Harris v. State, supra. We must defer to the superior position of the trial judge to pass upon the credibility of witnesses. Whitmore v. State, 263 Ark. 419, 565 S.W. 2d 733 (1978).

The “clearly erroneous” rule (which is equated with the “clearly against the preponderance of the evidence” rule, see Degler), governs in many of the federal circuit courts of appeal. See U.S. v. Marzano, 537 F. 2d 257, 33 ALR Fed. 307 (7 Cir., 1976), cert. den. 429 U.S. 1038, 97 S. Ct. 734, 50 L. Ed. 2d 749; U.S. v. Reynolds, 511 F. 2d 603 (5 Cir., 1975); U.S. v. Lindsay, 506 F. 2d 166 (D.C. Cir., 1974); U.S. v. Chase, 503 F. 2d 571 (9 Cir., 1974), cert. den. 420 U.S. 948, 95 S. Ct. 1332, 43 L. Ed. 2d 427. There is also considerable state case law support for this type of review. See, e.g., State v. Smith, 379 A. 2d 722 (Me., 1977); State v. Pires, 55 Wis. 2d 597, 201 N.W. 2d 153 (1972); People v. Terrell, 77 Mich. App. 676, 259 N.W. 2d 187 (Mich., 1977). See also, Brooks v. U.S., 367 A. 2d 1297 (D.C. App., 1976); People v. Slonski, 40 Ill. App. 3d 319, 352 N.E. 2d 292 (1976); People v. Zynda, 53 Ill. App. 3d 794, 11 Ill. Dec. 471, 368 N.E. 2d 1079 (1977); Liptroth v. State, Ala. Cr. App., 335 So. 2d 683, cert. den., Ala. 335 So. 2d 688 (1976), cert. den. 429 U.S. 963, 97 S. Ct. 393, 50 L. Ed. 2d 332.

Since we feel that it is the better approach, and since if. involves the same type of questions (often mixed questions of law and fact) that arise with reference to suppression of confessions, and the same placing of the burden of proof, we will review this case, and all those arising hereafter relating to a motion to suppress evidence obtained by a warrantless search, in the same manner we do when voluntariness of a confession is the issue. This is similar to the approach taken in other jurisdictions. See, e.g., Bies v. State, 76 Wis. 2d 457, 251 N.W. 2d 461 (1977).

There was considerable conflict in the testimony as to what happened after the report of the burglary was received. Nunnery testified that he was the first officer on the scene. Mrs. McKinestry corroborated this testimony and said that it was ten or fifteen minutes before other officers came. Nunnery said that three other officers responded and that all arrived at the scene, separately, but within “seconds” of each other (later he named Officers Cartwright, Barron, Hill and Harris as the officers), and that he was with Mr. and Mrs. McKinestry when they arrived, but he did not recall having seen Mrs. McKinestry when he first arrived at the scene. According to Nunnery, he had already been in the Osborn mobile home before the other officers arrived.

Nunnery or Harris entered the mobile home and conducted a search of “the far bedroom,” in which a large quantity of marijuana was found on a plastic bag on the floor, and of a closet, in which more marijuana was found, after one of them had entered, smelled the odor of marijuana recently smoked and then saw about one-half ounce of marijuana on a kitchen table. Nunnery said the closet door was open.

The identity of the officer who first entered the mobile home was not established with any degree of certainty. Nunnery testified that, upon arrival and before any other officer entered the mobile home, he went in cautiously through the unlocked but closed front door, with his pistol drawn, saw smoke, smelled a strong odor of marijuana, saw the bag containing less than an ounce of marijuana on the table and inspected the structure, finding what he estimated to be one-half pound of marijuana in the bedroom and more in a bedroom closet, to which the door was open. He stated that the marijuana in the closet was visible to anyone who might be looking in the closet. He said that he also found some marijuana in a kitchen drawer. Nunnery testified that he entered the mobile home with Mr. McKinestry following right behind him, prior to the arrival of Harris and that Harris had entered while he was inside the trailer. According to Nunnery, the smoke or haze that he observed when he first entered the place indicated to him that marijuana had been smoked just moments before.

Officer Rayburn Harris testified that he was talking to Mr. and Mrs. McKinestry at the scene of the burglary when Officers Nunnery and Barron arrived a few minutes later. He said that Nunnery went into the trailer, came back and called Barron, saying that he had found some contraband.

Mrs. McKinestry, a witness on behalf of the state, testified that she and her husband were alerted to the burglary by hearing glass breaking and that her husband locked the door to the Osborn home from the outside by reaching through the broken glass in the door before the police came. She said that when the officers arrived, Nunnery was walking around looking for an address, and had not been inside the mobile home. She added that Harris came up, asked if anyone had been inside, received a negative response, and then stuck his hand inside, opened the door and entered, leaving Nunnery standing by the steps. She said that after Harris had gone through Osborn’s place turning on the lights, he came back, called Nunnery, and said something. She testified that neither officer had.a pistol “pulled” at any time. She said that she had talked to both Nunnery and Harris at the burglary scene. She also stated that her husband had followed Nunnery into the Osborn mobile home, but that Officer Cartwright had run him out of it.

Nunnery testified that his purpose for entering the Osborn place was to see if there were any other burglary suspects inside, but admitted that on his arrest report he had stated that his purpose was to see if anything had been taken and that he had testified, in a preliminary hearing, that this was his purpose. He explained the inconsistency by saying that he considered the arrest report unofficial and a mere statement of the reasons for Osborn’s arrest. He saw no need to go into great detail or to indicate that he was looking for other suspects.

Nunnery admitted that he had no reason to suspect there was contraband in the residence when he entered it. He admitted that the door to the place was closed when he entered; that when he entered, no drawers were pulled out, so he would have had no means of knowing whether anything had been taken; that no attempt had been made to get a search warrant; that he had never investigated a burglary before; that neither of the McKinestrys told him that anyone else was in the Osborn home; that Mr. McKinestry identified the burglar; that he got the impression from his conversation with McKinestry upon arrival at the scene that the occupant of the place was not at home, and had not been during that evening; that he found no one in the place that created any hazard that the substance he took to be marijuana would be taken away, or that it would disappear within the period of approximately one-half hour during which a search warrant could have been obtained. His only excuse for not obtaining a search warrant, after he had seen contraband, was that it would be a waste of motion.

The trial court stated that, since the officers were not making or attempting to make an arrest, and that there was no emergency after the officer’s original entry into the mobile home, and no reason to believe that any contraband in the place would disappear while a search warrant was being obtained, the seizure was unconstitutional.

Upon the conflicting testimony, we cannot say that the trial court’s finding was erroneous. The trial judge had the right to believe from this testimony, and he obviously did believe, that the legitimacy of the purpose of the original entry of the officers was not adequately established, and that after the observations made by the officer who first entered, the search of the other rooms was devoted solely to the discovery of controlled substances, that none of the marijuana, with the exception of the small quantity found in the room originally entered was discovered inadvertently, and that there was no exigency that made obtaining a search warrant impracticable. Five police officers seem to have been present at the time. A police lieutenant was consulted by Nunnery after the contraband was found. No reason was shown why some of the officers could not have maintained the security necessary to prevent entry into or exit from the home during the 30 minutes Nunnery needed to obtain a search warrant. Officer Cartwright was left at the scene after the marijuana was removed. Mrs. McKinestry testified that four officers participated in the arrest of Osborn when he came home. This was about three hours after the search. The trial judge was faced with a situation somewhat similar to that prevailing in Freeman v. State, 258 Ark. 617, 527 S.W. 2d 909.

The judgment is affirmed.

We agree: Harris, C.J., and George Rose Smith and Holt, JJ.


author: Conley Byrd, Justice.

text:
    4-WAY TIRE & BATTERY, INC. and Jerry QUATTLEBAUM v. INTERNATIONAL BUYERS CORPORATION
    77-372
    566 S.W. 2d 143
    Opinion delivered May 30, 1978
    (Division II)

      O. W. (Pete) Wiggins, Sr., for appellants.

      Julius C. Acchione, for appellee.
   Conley Byrd, Justice.

Appellants 4-Way Tire & Battery, Inc., and Jerry Quattlebaum appeal from a judgment entered in favor of International Buyers Corporation. For reversal appellants list the following points:

“POINT I. Was the Plaintiff, appellee on appeal, doing business within the State of Arkansas, without having registered with the Secretary of State of Arkansas, and were the courts available to the appellee because of its failure to so register? Did the ownership of the property sued on ever change hands despite the fact that appellee retained title to the property until it was paid for?
POINT II. Was the contract sued on void for usury on its face?
POINT III. Was the final failure of the appellee, plaintiff below, to ask for interest and attempt to circumvent the charge of usury under the Arkansas Constitution in violation of 10% interest, and the further question of whether or not the law of the forum would prevail where the enforcement of the contract was sought? Did the trial court err in refusing to recognize the adjustment on returned merchandise which Mr. Edwards picked up and allowed adjustment for and was the court’s judgment contrary to the facts established in the trial court?”

Appellant’s statement of the case takes up 8 pages of the brief. The statement apparently contains a summary of the pleadings. It also contains a designation of the record and the appearances of counsel for the respective parties. Our Rule 9(b) provides:

“(b) After the index, if any, the appellant’s abstract and brief shall begin with a concise statement of the case, without argument. This statement, ordinarily not exceeding two pages in length, should be sufficient to enable the court to read the abstract with an understanding of the nature of the case, the general fact situation, and the action taken by the trial court. ...”

Rule 9(c) then requires the appellant to list the points upon which he relies for reversal. Rule 9(d) then provides:

“The appellant’s abstract or abridgment of the record should consist of an impartial condensation, without' comment or emphasis, of only such material parts of the pleadings proceedings, facts, documents, and other matters in the record as are necessary to an understanding of all questions presented to this court for decision. ...”

Following the listing of the points to be relied upon, appellant does not bother to abstract the pleadings. The abstract at that point starts out with the testimony of Mr. Paul Harold Mazingo, vice president of operations of appellee. Here again appellant neglects to follow our Rule 9(d) — page 15 of the abstract between the designation “ (TR 56)” and “(TR 60)”, we find the following:

“It must be remembered that after the action was filed the issues were joined, certain amounts were available from the Fire Insurance Policy proceeds and the parties agree to take the sum of $8,775.18 and after certain credits were given the remaining disputed items totaled $3,333.00. The disputed items represent tires that were defective and wrong sized and Mr. Edwards was sent to Little Rock to adjust the items and the tires were outside of the building and there was a credit of freight bills and some spacer items. The tires were some that had become bad and some were over-sized and some not fit to use and the sum of $3,333.00 is definitely in dispute.”

We have diligently searched the record from pages 56 through 60 of the transcript and we have been unable to find any testimony of witness Mazingo to support the above quote. In fact it appears to us that appellant inserted the statement, contrary to the Rules by way of argument. Consequently, we have before us a one brief case (appellee has filed no brief) in which the statement of the case does not comply with our rules and in which the abstracting of the testimony is interspersed with argument in such a manner that it is difficult to distinguish between what the record would show and what may appear to be only argument. While we might be inclined to disregard the violations of either Rule 9(b) or Rule 9(d) if either appeared separately without the other, we feel that we cannot do so in view of the violations of both that are shown here. This court is reluctant to affirm a judgment because of the violation of Rule 9. Such rulings always involve matters of judgment that even the members of this court often disagree about. However, where the abstracting is deficient to the point that the members of this court cannot follow the proceedings as they were presented to the trial court, it places the members of this court in a position of speculating as to what transpired unless they have read the record. In such situations, we should affirm the judgment of the trial court rather than speculate on what the facts or proceedings were before the trial court.

Affirmed.

We agree: Harris, C.J., and Hickman and Howard, JJ.

      One of the participating Justices would affirm on the merits.


text:
    Bob HOPKINS d/b/a HOPKINS AND ASSOCIATES REALTY v. Gerald IVES
    77-394
    566 S.W. 2d 147
    Opinion delivered May 30, 1978
    (Division II)

      John T. Harmon and Morgan E. Welch, by: Morgan E. Welch, for appellant.

      Thompson, O’Bryan & Martin, by: Howard L. Martin, for appellee.
   Conley Byrd, Justice.

Appellee, Gerald Ives reneged on a real estate agreement to purchase the Kent and Reynolds farms owned by Reed McConnell near El Paso, Arkansas. McConnell’s real estate broker, appellant Bob Hopkins, d/b/a Hopkins and Associates Realty, brought this action against appellee to recover his alleged real estate commission in the amount of $22,299.00. Appellant’s arrangement with McConnell was an oral agreement by which appellant would have received a 6% real estate commission for the sale of the property. Appellant admits that he has not attempted to collect a commission from McConnell and that he has not sent McConnell a bill for the commission or asked about collecting the commission. The trial court in denying appellant’s claim against appellee issued the following memorandum opinion:

“The Court has concluded that recovery must be denied to the plaintiff Hopkins. It appears that many jurisdictions would grant recovery of the commission to this plaintiff representing the commission he would have earned had the contract been consummated. In those jurisdictions, privity of contract is not requisite in order for third persons benefited by it to maintain an action. However, this Court has concluded that such is not the rule of law in Arkansas; that our general rule is that there must be privity and an intention by the promisee to secure some benefit to the third party. It is not enough that the plaintiff might benefit by the performance of the contract. He can only maintain the action when the contract is made for him.
In reaching the above stated conclusion, the Court has relied on several cases to be found in Volume 5, Ark. Digest, CONTRACTS, KEY 187 (#1). Specifically, see Dickinson v. McCoppin, 121 Ark. 414 and West v. Norcross, 190 Ark. 667.”

We agree with the trial court. Our law on the subject is in accord with the Restatement on Agency 2d § 372 (2) which provides:

“An agent does not have such an interest in a contract as to entitle him to maintain an action at law upon it in his own name merely because he is entitled to a portion of the proceeds as compensation for making it or because he is liable for its breach. ”

Appellant’s reliance upon Howell v. Worth James, Const. Co., 259 Ark. 627, 535 S.W. 2d 826 (1976), is not supported by the record. In permitting Worth James Const. Co. to recover against Tall Timber Development Corporation upon a contract between Tall Timber and Howell, we stated:

“. . . In the case at bar, there is substantial evidence that it was the clear intention of the parties to contract for the benefit of appellee and that appellee was a beneficiary of their contract. We have repeatedly held that a contract made for the benefit of a third party is actionable by such third party ... .”

So far as the abstract of the record before us shows there is no evidence to show that appellee in agreeing to purchase the farm from McConnell intended to contract for the benefit of appellant. In this connection, we also note that the matter appears to have been raised for the first time on appeal.

Affirmed.

We agree: Harris, C.J., and Hickman and Howard, JJ.


author: Darrell Hickman, Justice.

text:
    ARKANSAS STATE HIGHWAY COMMISSION v. Myrtle BARNES et al
    77-399
    566 S.W. 2d 148
    Opinion delivered May 30, 1978
    (Division II)

      Thomas B. Keys and Regina Whitaker Laidler, for appellant.

      Brown, Compton & Prewett, Ltd., for appellees.
   Darrell Hickman, Justice.

The Arkansas State Highway Commission filed a condemnation lawsuit in the Ouachita County Circuit Court to condemn 15.67 acres of land in fee and .66 acre for a temporary easement, all owned by the heirs of Paul Barnes, deceased. The jury returned a verdict in favor of the Barnes heirs for $23,500.00.

The commission alleges two errors on appeal: the trial court erred in permitting a witness to use the value of a lease in determining the before value of the land when comparable sales were available; and, the trial court erred in not striking the value testimony of the landowner, Gerald Barnes.

We affirm the judgment of the trial court.

The appellant raises for the first time the question of whether it is proper for an expert witness to consider the lease value of property when comparable sales are available to use as a basis for value. We have held that it is proper to determine the value of land by using a capitalization formula based on a lease. See, Housing Authority v. Rochelle, 249 Ark. 524, 459 S.W. 2d 794 (1970).

Here the landowners’ expert witness testified that he based the before valuation of one condemned tract on land rental he knew of in the area. Taking the amount of rental income,he estimated a land value by capitalizing the rental income. He also considered comparable sales.

We have not had the question before us as to whether it is proper to use both methods in determining the value of property as was done in this case. Appellant cites a precedent from another jurisdiction where it was held that a lease could not be considered in determining value when comparable sales are available. See Lataille v. Housing Authority, 280 A. 2d 98 (R.I. 1971). We decline to adopt this view. We feel that the purpose of testimony as to value is to present evidence to a jury so a landowner may be fairly compensated for his loss. Either party, the state or a landowner, should be able to present credible and relevant evidence to determine value.

One of the landowners, Gerald Barnes, gave his opinion as to the value of the property before and after the taking. On cross examination Barnes testified that he considered comparable sales of nearby property. Barnes testified that he gained most of his personal knowledge of comparable sales as a result of talking to the experts. However, Barnes knew personally that one of the sales was from his father, Paul Barnes, for part of the land in question. The appellant moved to strike all of Barnes’ testimony as to value because Barnes did not have a basis for his opinion. We have held many times that a landowner may give his opinion of the value of his land provided there is a proper basis. A landowner’s opinion does not have to be solely based on comparable sales but may include the fact that he is familiar with the land. In this case it was undisputed that Barnes had been born on the land, helped to farm it, lived on it, and was thoroughly familiar with it. Also, he did know about at least one of the sales from personal knowledge. The motion of the appellant to strike all of his testimony as to value was therefore properly overruled. Arkansas State Highway Commission v. Person, 258 Ark. 379, 525 S.W. 2d 77 (1975).

Affirmed.

We agree: Harris, C.J. and Byrd and Howard, JJ.


text:
    Paul LAIRD and Lucy LAIRD v. Eldon LACEY
    77-382
    566 S.W. 2d 145
    Opinion delivered May 30, 1978
    (Division II)

      Dickson & Ball, for appellants.

      Putman, Davis, Bassett, Cox & Wright, for appellee.
   George Howard, Jr., Justice.

The central issue involved is whether a vendor has a reasonable length of time in which to satisfy existing liens on real property involved in the sale to his vendee under an installment contract which provides that all encumbrances are to be satisfied “at the time of final payment” or is strict compliance with the satisfaction agreement required upon full performance by the vendee.

The essential facts for resolution of this issue are: Appellee, as seller, and appellants, as purchasers, entered into a written contract for the sale and purchase of 42.36 acres of land in Washington County, Arkansas, for a total consideration of $5,500.00. The sum of $1,000.00 was to be paid by appellants as the initial payment upon the execution of the contract and the balance remaining in the sum of $4,-500.00 was to be paid out in monthly installments of $100.00 each, including interest at the rate of 8% per annum.

It was clearly understood by all parties to the agreement that there existed a first mortgage on the property in question in favor of First National Bank of Fayetteville securing an indebtedness of $5,350.00 and a second mortgage in favor of Farmers Home Administration securing the sum of $6,-400.00. The seller agreed that, upon payment of the purchase price, he would furnish a release deed showing satisfaction of the two mortgages. It was further agreed that in the event the seller was unable to obtain the release deeds at the time the purchase price was paid in full, the seller would be obligated to convey to purchasers one acre of land out of other property owned by the seller, but not involved in the contract between the parties, for each $130.00 of unsatisfied indebtedness on the real property that appellants were purchasing.

On November 13, 1975, appellants prepaid the balance of the purchase price and demanded a conveyance of the property that they had contracted to purchase. There were outstandng liens still existing against the property when the final payment was made. Appellee contends that he was not notified that appellants had made the final payment until November 15, 1975, and that on November 20, 1975, appellee acquired a satisfaction of the mortgage indebtednesses as required under the contract. Appellants dispute this contending that appellee was put on notice that the final payment would be made on November 13, 1975. However, appellants concede that appellee satisfied the mortgage indebtednesses within a period of seven days after the final payment was made by appellants.

The trial court rendered a judgment in behalf of appellee pursuant to appellee’s motion for summary judgment. As a consequence, appellants have brought this appeal contending that the trial court erred in holding that there were no genuine issues of material fact involved and that the defendant was entitled to a judgment in his favor as a matter of law.

Inasmuch as the trial court’s reasoning, in its letter opinion to counsel dated August 5, 1977, is most persuasive, we adopt the trial court’s opinion and, accordingly, set the opinion out below:

“On defendant’s motion for summary judgment: Defendant seeks judgment of dismissal of complaint on the ultimate theory that his procuring release of mortgage encumbrances, on land sold by defendant to plaintiff, within 7 days after plaintiffs paid the full purchase price was a ‘reasonable time’ afforded defendant, over against the language of the purchase contract, which obliged defendant to procure releases ‘at the time the purchase price ... is paid in full . . .’
“Plaintiffs argue contra, and ask that defendant be required to execute the penalty prescribed by contract, by conveying to plaintiffs 1 acre of land for each $130.00 of lien charge against the purchased property at time of full payment of purchase price.
“Thus, the general issue of fact is whether defendant had a ‘reasonable time’ to clear the mortgages or must be held to the strict time schedule of‘at the time’ of payment of purchase price.
“The specific issue of fact stems from plaintiffs’ answer to requests for admissions of fact by defendant, where plaintiffs deny that defendant did not know plaintiffs were going to pre-pay, he could and should have been ready to procure release of mortgage liens ‘at the time the purchase price is paid in full’; and that, not having done so, defendant is in breach, and should be obliged to convey additional property to plaintiffs.
“In the first place, the matter of whether defendant had a ‘reasonable time’ to obtain release of liens is much more a question of law than of fact. It is true, as plaintiffs suggested, that the meaning of contracts frequently turns upon the intent of the parties. It is equally true, and more fundamental that, in the absence of time-essence terms of a contract, the law presumes a reasonable time for both contracting parties to effect their duties, even where a specific time for such is stated.
“Secondly, even if defendant did know that plaintiffs were going to pre-pay on November 13, there would have been, of necessity, some period of time required for and available to defendant to obtain releases. This time might have been shortly before, at the instant of, or shortly after the actual pre-payment. In point of fact, the releases were procured 7 days after payment and, according to defendant, 5 days after he learned that pre-payment had been paid.
“Hence, under the construction of the time-frame aspects of the contract most unfavorable to defendant, he met his duties after a lapse of only 7 days from the literal time (instant of pre-payment) that he was obliged to do.
“In my judgment, the application of any pertinent equitable principles, plaintiffs have received everything they bargained for, and have suffered no harm. On any balancing of the equities, the scales clearly tip in defendant’s favor.
“In my judgment, no genuine issue of material fact is presented by the pleadings and other filed material. Motion for summary judgment should be granted, and complaint dismissed at cost of plaintiffs. ...”

Affirmed.

We agree: Harris, C.J., and Byrd and Hickman, JJ.