author: John A. Fogleman, Justice. J. Fred Jones, Justice,

text:
    ARKANSAS STATE HIGHWAY COMM’N v. Charles L. ORMOND and Elizabeth Ann ORMOND, his wife
    5-5021
    448 S. W. 2d 354
    Opinion delivered December 22, 1969

      Thomas Keys and Kenneth Brock, for appellant.

      Felver A. Rowell, Jr., for appellees.
   John A. Fogleman, Justice.

Appellant took 11.01 acres from a 262-,acre tract owned by appellees for the construction of Interstate Highway 40, a controlled-access highway. It appeals from a judgment awarding appellees $12,000 as just compensation, .asserting only two grounds for reversal. The first is the refusal of the trial court to strike that portion of the testimony of Charles L. Ormond, one of the landowners, relating to values based on use of the land for commercial catfish farming. The other is that there was no substantial evidence to support the verdict.

We agree that appellant’s motion to strike that portion of Ormond’s value testimony of which it complained should have been sustained. He had fixed a value of $102,114 on the whole tract before the taking and a value of $17,240 on the remaining lands, consisting of 92.5 acres north of, and 158 acres south of, the new highway. Thus, his difference between before and after values was $84,874.

Ormond, a realtor and farmer, demonstrated his familiarity with real estate values in Conway County. He testified that the highest and best use for the lands was for catfish farming, and that he had commenced operations to devote the lands to that purpose before the taking. According to him, he had constructed a preliminary pond in 1963 or 1964 and had constructed a dam on the north part of the land which had not been completed when the condemnation suit was filed. Ormond stated that he acquired the land several years before the taking after having studied the entire county to find land suitable for flooding. He felt that this land had these attributes and a terrain such that adjoining lands would not be flooded from dams necessary for his purposes. This taking destroyed accessibility to the north residual, so that there was no way to proceed with catfish farming plans.

On cross-examination, it was revealed that Ormond had made extensive investigation as to markets, prices, demands, methods, yields and costs he might anticipate when his plans were implemented. He admitted that his before taking value was based entirely on income he anticipated upon the basis of his own estimates of market prices, yields and costs. Ho also admitted that prices would fluctuate and that one could not say as much as a year in advance what the price would be when the crop was yielded. His estimate of costs included 6c for fingerling minnows, even though he acknowledged a current range of 4%c to 7c.

There is nothing whatever in the record to indicate that Ormond had any experience in this business or anything related thereto. Appellant’s objection was that the value based upon his anticipated future profits was highly speculative. Thus, appellant met its burden of showing that there was no reasonable basis for Ormond’s opinion of the value of the entire tract before the taking. Even if we should consider that evidence of income and production from commercial catfish farming is admissible under the recognized exception in cases of agricultural property, as appellees urge, there is no exception which permits such values to be based on pure speculation, as must be the case when the testimony is given by one without experience or expertise in the undertaking about which he. testifies, when there is no history as to the particular land upon which to base anticipated income or production. See Little Rock & Ft. S. Ry. Co. v. Alister, 62 Ark. 1, 34 S. W. 82.

Even though the value testimony. of Ormond was improper, this does not require reversal, if other evidence is sufficient to sustain the verdict. Owen v. Jones, 14 Ark. 502; Jones v. Malvern Lumber Co., 58 Ark. 125, 23 S. W. 679. It is only when there is no other evidence to sustain the verdict or when it is manifest that appellant was prejudiced by the incompetent evidence that a reversal is proper under circumstances existing here. See Owen v. Jones, supra; Fordyce v. McCants, 51 Ark. 509, 11 S. W. 694, 4 L. R. A. 296, 14 Am. St. R. 69. We have held that error will not require reversal where it is manifestly not prejudicial,. or where it is evident that the error did not affect the verdict. Insured Lloyd’s v. Mayo, 244 Ark. 802, 427 S. W. 2d 164; Keathley v. Yates, 232 Ark. 473, 338 S. W. 2d 335; Street v. Shull, 187 Ark. 180, 58 S. W. 2d 932; Lamden v. St. Louis Southwestern Ry. Co., 115 Ark. 238, 170 S. W. 1001.

We must determine, then, whether, in view of other evidence in the case, this error was prejudicial to appellant or whether it affected the verdict. In doing so we must also determine the other question posed, i. e., whether there was substantial evidence to support the jury verdict. We find that there was and that the error in relation to the Ormond testimony does not require reversal.

It must be remembered that only Ormond’s opinion as to the land value before the taking would have been stricken. This would leave for the jury’s consideration, not only Ormond’s opinion as to the value of the remaining lands, but his testimony as to the characteristics of the land and as to a much disputed point — its highest and best use. This was appropriate. Ormond was entitled to show every advantage that his property possessed, present and prospective, in order that the jury might satisfactorily determine what price it could have been sold for on the market. Arkansas State Highway Commission v. Carder, 28 Ark. 8, 305 S. W. 2d 330; Arkansas State Highway Commission v. O. & B., Inc., 227 Ark. 739, 301 S. W. 2d 5; City of El Dorado v. Scruggs, 113 Ark. 239, 168 S. W. 846; Little Rock Junction Ry. v. Woodruff, 49 Ark. 381, 5 S. W. 792, 4 Am. St. R. 51; Kansas City Southern Ry. Co. v. Boles, 88 Ark. 602, 115 S. W. 375. He could state and have his witnesses state any and every fact concerning the property which he would naturally be supposed to adduce in order to place it in an advantageous light if he were selling it to a private individual. Little Rock Junction Ry. v. Woodruff, supra; Stuttgart & R. B. R. Co. v. Kocourek, 101 Ark. 47, 141 S. W. 511. An owner is entitled to show the availability of his property for any and all purposes to which it is plainly adapted, or for which it is likely to have value and induce purchases. Arkansas State Highway Commission v. Brewer, 240 Ark. 390, 400 S. W. 2d 276: Arkansas State Highway Commission v. Griffin, 241 Ark. 1033, 411 S. W. 2d 495; Gurdon & Ft. Smith R. Co. v. Vaught, 97 Ark. 234, 133 S. W. 1019. The same considerations are to be regarded as in a sale between private parties. Ft. Smith & Van Buren Bridge District v. Scott, 103 Ark. 405, 147 S. W. 440; Little Rock & Fort Smith Railway v. McGehee, 41 Ark. 202.

Appellees also offered the testimony of Lloyd Pearce, a realtor with 14 years’ experience as a real estate appraiser. He described a 10-acre lake on the property and a dam which held water on some 35 to 40 acres thereof. He recognized that these lakes had a potential for fish farming. He considered that the highest and best use of the lands was for agricultural purposes with a potential for rural homesites and commercial fish farming. His opinion was that the fair market value of the whole tract Avas $52,400 and of the remaining lands, $35,300, leaving a difference of $17,100 or $5,100 more than the jury verdict.

Appellant’s argument that Pearce’s value testimony is not substantial is difficult to follow. He was the first witness called. Our attention is not directed to any objection to his testimony or the basis therefor made during the trial. Apparently appellant did not consider his testimony to be without any reasonable basis at the time it was given. As we interpret the argument, appellant contends that Pearce based his valuation of the Ormond land before the taking substantially on two sales, one of which Avas not comparable, and the other based on incorrect information, but ignored a sale which was comparable. It is also argued that there was no basis for his difference in values before and after the taking.

Pearce said that he used market data in making his appraisal. He used a sale of ,a tract by one Isley to Walls on June 18, 1966. This was a 66-acre tract, and Pearce stated that he confirmed a sale price of $18,000, or $290 per acre, with the real estate man who handled the sale, hnt not with the seller or purchaser. Federal revenue stamps on the deed also indicated an $18,000 consideration. Appellant argues that Pearce was wrong because one of its witnesses, a highway department staff appraiser, testified that he confirmed this sale with the purchaser Walls and found that the consideration was $12,-000 or $182 per acre. It has been recognized that a value expert may rely upon hearsay in determining market values in the vicinity of the lands in question. Arkansas State Highway Commission v. Russell, 240 Ark. 21, 398 S. W. 2d 201.

It has never been recognized that one person who has firsthand knowledge of a real estate sale as a party is a source of information superior to another participant. Apparently, no one made any effort to contact the seller. An interesting question would be posed if he had given another witness still a third figure as the true consideration. The jury was not required to accept the version of either of the witnesses. Buyers and sellers of real estate are often reluctant to disclose true prices. A question of credibility and weight was presented for jury determination on this point, at least in the absence of direct and uncontradicted evidence on the subject.

Appellant contends that this sale and another could not be considered as comparable because the lands involved in those transactions fronted upon, or were near, Highway 64,’while the property in question was accessible only by an unimproved dirt road, which may not have been used for some time, or by a permissive access to a county road which intersected with a dirt road from Highway 64, one-fourth to one-half mile away. The Ormond property was 1% miles east of the city limits of Morrilton. Its characteristics were fully described by Pearce, Ormond, and by appellees’ witness Hayes. No effort was made by appellant to show dissimilarity of these tracts in any respect other than the means of access. We have said many times that no two tracts of land are identical and that reasonable latitude must be allowed in considering comparability of sales. Arkansas State Highway Commission v. Duff, 246 Ark. 922, 440 S. W. 2d 563; Arkansas State Highway Commission v. Sargent, 241 Ark. 783, 410 S. W. 2d 381; Arkansas State Highway Commission v. Clark, 247 Ark. 165, 444 S. W. 2d 702. We also have repeatedly said that there are many factors to be considered in determining comparability, but that reasonable resemblance is all that is required. Arkansas State Highway Commission v. Witkowski, 236 Ark. 66, 364 S. W. 2d 309; Arkansas State Highway Commission v. McAlister, 247 Ark. 757, 447 S. W. 2d 649. We cannot say that the one element of dissimilarity was sufficient to require that the sales, as a basis for opinion evidence, be held not comparable as a matter of law.

Appellant contends that Pearce should have considered the sale of a tract near the Ormond land to Nash by one Wallenjohn at $125 per acre just three months prior to the date of taking. Pearce admitted he did not investigate this sale. This tract may. or may not have been comparable to the subject property. This failure on the part of Pearce was a matter to be considered by the jury in testing Pearce’s credibility and weighing his testimony. It did not render his testimony insubstantial, as a matter of law.

Appellant’s contention that there was no basis for Pearce’s difference in values is premised largely upon the argument that he based his damages to the north residual of 92.62 acres upon the fact that it was left without any access after the taking. This position is not really justified, because Pearce also pointed out that the tract was severed into two separate and distinct tracts, with resulting alterations in size and shape, and with no means of communication between them. He did consider this north residual to be isolated, because he said, as did both of appellant’s witnesses, that while the south residual had the same means of access it always had, the north tract was left without any means of access because of the location of the highway right-of-way.

There were jury questions as to the potential use of the property and as to values. The highest and best use of a landowner’s property is for the jury’s determination. Arkansas State Highway Commission v. Griffin, 241 Ark. 1033, 411 S. W. 2d 495. We also held in Griffin that it is proper to allow evidence of all potential uses of a landowner’s property. The fact that one is not an expert pertaining to some use to which the property may be put goes only to the weight to bo given to his testimony. In Ft. Smith & Van Buren Bridge Dist. v. Scott, 103 Ark. 405, 147 S. W. 440, we said:

“The sole question here was the market value of the land, and the witnesses gave their opinions as to that value, basing them on different facts and reasons in support thereof. It is true, some of them had no knowledge of the sale of lands under like conditions for bridge site purposes, nor information as to the prices realized at such sales, nor were they expert engineers, but -all who testified were intelligent men, long familiar with the lands taken and the locality and neighborhood where they were situated, knew their value for some purpose, and in giving their opinion as to the most valuable purpose for which they were adapted and could be used, they stated their reasons for so doing. Their knowledge of the facts upon which their opinions were based and the reasons therefor and the value and weight thereof could have been and were ‘readily and satisfactorily tested by cross-examination,’ as said in Railway v. Kirby, 44 Ark. 106.”

In that case we held that the question as to who was competent to give an opinion is one which must be left largely to the discretion of the trial court. This further statement in that opinion is also applicable here:

“The jury were capable of and it was within their province to determine the weight that should be accorded to the opinions of the witnesses, and we do not think there was any abuse of the discretion of the trial court in permitting the estimates of the witnesses and the reasons therefor submitted to the jury, or that any prejudicial error was committed in the introduction of the testimony.”

The case most nearly similar to this is Little Rock & Fort Smith Railway v. McGehee, 41 Ark. 202. The court faced the question as to whether there was support for the actual amount of the damages. The property involved fronted on the river for a quarter of a mile and consisted of a rock bluff entirely unfit for cultivation or human habitation. The estimate of damages on behalf of the landowner was based upon the susceptibility of the property for use as a ferry landing. No ferry had ever been established or operated on the land and no license had been granted by the county court for such a ferry. It was said to be an eligible site by reason of the deep water at that point. The land was less than one mile distant from a licensed ferry at Van Burén which had been in operation since territorial times, but which was said to labor under disadvantages. There was no public highway reaching any point in the land, but it was shown that one could be constructed from Van Burén or Fayetteville .at a moderate expense. The tract consisted of 76 acres, only three or four of which were actually taken. The evidence showed that the landowner had destined the land for this use and had once leased it with the condition that the lessee obtain a license and establish a ferry or surrender the premises. No other use for the property was suggested. The condemnor had moved to exclude all evidence relating to the feasibility of establishing a ferry from the landowner’s property to the opposite bank of the river. The court said that although no ferry may have ever been established there it was possible and maybe probable that a change of circumstances or the development of the country might require one in the near future. It was held that the jury had not placed an exaggerated estimate upon the injury inflicted upon the owner’s tract of land.

"We have always held that a jury verdict will not be disturbed if there is any substantial evidence to support it. Arkansas State Highway Commission v. Sargent, 241 Ark. 783, 410 S. W. 2d 381; Arkansas State Highway Commission v. Jelks, 203 Ark. 878, 159 S. W. 2d 465. To do otherwise would invade the province of the jury. Washington County v. Day, 196 Ark. 147, 116 S. W. 2d 1051.

Here the Ormond value testimony was manifestly not prejudicial, and obviously disregarded by the jury. The verdict was only a fraction of the damages he stated. It was substantially less than Pearce’s assessment. We have heretofore entered remittiturs when the owner’s value testimony was without reasonable basis down to the amount that was shown by his other value witnesses. See City of Harrison v. Moss, 213 Ark. 721, 212 S. W. 2d 334. The logic applied in such cases requires affirmance of this judgment, where the error obviously did not enhance the award and the verdict is less than the amount for which there is substantial evidentiary support.

George Hose Smith, Jones and Byrd, JJ., dissent.

J. Fred Jones, Justice,

dissenting. I do not agree with the majority opinion. The Ormond land originally consisted of 262 acres. The taking of 11.01 acres for right-of-way left 92.62 acres on the north side of the right-of-way, and 158.37 acres on the south side. Mr. Ormond testified that his damage amounted to $84,874 on a before value of $102,874, and an after value of $17,240 because of loss in access to a part of it. His only expert •witness testified that the total damages amounted to $17,000. Two expert witnesses for the Commission testified that the damages amounted to $4,150 and $4,500 respectively. Judgment was entered on a jury verdict for $12,000 and on appeal to this court the Commission relies on the following points for reversal:

“The trial court erred in refusing to strike that portion of Charles L. Ormond’s value testimony relating to values based on commercial catfish farming.
The verdict was excessive in that there was no substantial evidence to support a verdict of $12,-000.00.”

I agree with the appellant on both points.

Mr. Ormond purchased his land in about 1961, apparently at public sale, for about $11,000. Mr. Ormond testified that he had planned to raise catfish on his land and that its highest and best use is for catfish farming. He testified that water could be, and was being, impounded by a levee on 60 acres of the land and that before the taking this land was worth $1,520.40 per acre or a total of $91,224 for catfish farming. He testified that it would cost about $10,000 to put the land in shape for catfish farming, leaving a net before value of the 60 acres at $86,224.

On cross-examination Mr. Ormond testified that he used the income approach in establishing the value of his land. He says his lake would be 20 feet deep in some areas and that an acre of water four feet deep will support 2,000 catfish, and that under normal conditions he would be able to get 1,800 of them to market at one year of age; that two pounds of feed will produce one pound of catfish, and that feed costs $2.50 a sack. He testified that his annual net income from one acre of catfish would be $304.80 per acre, but that he would give a tenant half of this amount and as landlord he would net $152.04 a year per acre in catfish farming. He multiplied this amount by ten years in arriving at $1,520.40 as the value of his land per acre. At the close of Ormond’s testimony the record reveals as follows:

“MR. BROCK: At this time the plaintiff would move to strike the value testimony of the witness Ormond relating to the value placed on the land that is suitable for commercial catfish farming, on the basis that this value is based upon anticipated future profits and would be of a highly speculative nature, on which he is basing his value; and for this reason we move that that testimony with reference to the commercial fish farming and values based on that use be stricken.
MR. ROWELL: In response to the motion, counsel for the landowner asserts that the opinions as to the before value was based upon the adaptability of the land at the time of taking, that on cross-examination counsel for the Highway Department interrogated the landowner with reference to why the land was adaptable and as to why it had such a value; that in response the landowner set forth the rental value of the property with reference to farming, which is an acceptable method of ascertaining market value, having nothing to do with speculation or conjecture with reference to the adaptability of the land.
THE COURT: The court will let the whole thing go to the jury for whatever it is worth.” (Emphasis mine).

The majority agree that this testimony should have been stricken.

Mr. Pearce testified on direct examination that prior to the taking the highest and best use was one of an agricultural nature, primarily pasture land, with a potential for commercial fish farming and a future potential for rural homesites, provided adequate and suitable access was available to the property. He testified that after the taking the highest and best use of the residual on the south side remains the same as before the taking with the same potential use and value that it had before the taking. He tesitfied that the parcel remaining on the north side of the right-of-way, being without access and partially flooded, its highest and best use after the taking would be flooded timberland. It was Mr. Pearce’s opinion that the value of the 11.01 acres actually taken amounted to $2,250, and the damages to the remainder amounted to $14,850, giving a total of $17,000 for the land taken and damage to the remainder.

On cross-examination, as to access, Mr. Pearce testified in part as follows:

“Q. The real route from Plumerville, though, isn’t it this north route that comes into the property on the. north side of the property, is that right?
A. Yes, sir,,but that road has not been used, as far as I could tell, in a good while up to this property. Now—
Q. Yes, sir. It’s,grown up and it’s hard to see.
A. Ye.s, sir..
Q. You haven’t been down it?
A. I havn’t been down there, no, sir. I’ve been down it a ways, as far as it was graded out, but I haven’t been on to this property from that road. ■
Q. - This was — the road from Plumerville was one of the access routes to this property that you were talking about?
A. Yes, sir, that was one of them, yes, sir.
Q. Now, do you also know of another access route that wouldn’t even show on this property perhaps, up across the land of Earl Smith?
A. There is a road. I don’t know the name. It comes in along here—
Q. Would that be south?
A. It might be. I haven’t been over that road either. I haven’t tried that either — I don’t know the owner’s name. That comes in here.
Q. Would it be further south?
A. I don’t know about tnat. It comes on the southern portion of the property.”

As to use and value on cross-examination, Mr. Pearce testified:

“Q. The highest and best use of the property was agricultural purposes?
A. Yes, sir.
Q. For pasture land?
A. That plus any potential, as I said, for commercial fish farming and the lakes.
Q. Now, you say fish farming in the lake to the south, on the south residual?
A. And the one — The lake that had been formed on the north residual prior to the taking.
Q. This is a basis of the $200.00 per acre value?
A. Yes, sir. As I say, there was a potential for— future potential — for rural home sites, provided adequate access to the property were available,' which at this time I do not consider the access is adequate. * * *
Q. Well, this open pasture land would be better than that ridgy woodland, wouldn’t it?
A. Mr. Brock, for its particular use, uses, but then those lakes, as I say, have a potential for fish farming which could also be considered a valuable use.
Q. But your highest and best use on this property is for agricultural purposes?
A. That’s right, and I consider fish farming as an agricultural purpose, along with pasture land.
Q. There hasn’t been any fish farming done on this property, had there?
A. Not on this property, but there’s some just north of Plumerville out here that—
Q. There is a potential for it?
A. It’s a use to which the land can be devoted.
Q. Like residential?
A. As I say, that is future potential in the residential development, and that relies strongly on adequate access to the property. The ponds on this particular land could he utilized for the purpose which I mentioned immediately.”

(Emphasis mine)

It is my opinion that Mr. Pearce’s testimony as to potential value for catfish farming should have been stricken. It is my further opinion that without the potential fish farming value, there was no substantial evidence to support the verdict for $12,000.

As to his market value approach, Mr. Pearce testified:

“Q. Now, this $200.00 per .acre, what approach to value did you use? Did you use the market data approach?
A. Yes, sir.
Q. Does this include sales of other lands in this vicinity?
A. That’s correct.
Q. What sales did you use to arrive at this $200.00 per acre value?
A. I used the sale of Isley to Walls, one which was a 66 acre tract south of Highway 64 a mile and a half east of Morrilton.”

Mr. Pearce testified that the Isley to Walls sale was for $290 per acre as indicated by revenue stamps on the deed and as confirmed by the real estate agent who closed the deal, and that there was public access to this property. One other sale used by Mr. Pearce was a 40 acre tract fronting on Highway 64 some five miles east of the Ormond property. He testified that this property sold for $7,000 or $175 per acre. Mr. Pearce testified to two other sales, one in 1963 for $132 per acre, hut none in the vicinity of the Ormond property. The sale of an 80 acre tract near the Ormond property for $175 per acre was not considered an arms-length transaction by Mr. Pearce, and property near the Ormond land, purchased by a Mr. "Wingo for $50 per acre, was considered a bargain by Mr. Pearce and not representative of market value. Mr. Pearce was asked concerning other specific sales in the vicinity of the Ormond property, but he disclaimed any knowledge concerning these sales.

All of Mr. Pearce’s testimony as to severance damage pertained to the 92.62 acres north of the right-of-way which he says had a market value of $200 per acre as pasture and a potential fish farm before the taking, but which has now been reduced to flooded timberland worth only $40 per acre because of loss of access.

“Q. Now, on this south 150.87 acres, what did you consider the value of that to be afterwards?
A. $200.00 per acre.
Q. In other words, you didn’t feel it was damaged in any way?
A. No, sir, it has been slightly altered in shape, but I didn’t consider that it had been damaged.
Q. Now, as to the 92 acres north of the new Interstate, 92.62 — A
A. Yes, sir.
Q. What after value did you place on that?
A. $40.00 per acre.
Q. $40.00 per acre? And what was the reason it was only worth $40.00 an acre again?
A. It is an isolated tract and doesn’t have access. The highest and best use for the land after the taking a portion of the land is flooded. It would be flooded timber land. Some of it is flooded, and some of it was not flooded.
Q. So you damaged the 92 acres north of the Interstate $160.00 per acre?
A. Yes, sir.
Q. Because it had no access.
A. Yes, sir.”

Mr. Pearce testified on cross-examination that there were two access roads into the property; that one of them had grown up and was hard to see, and that he had not attempted to go to the property over either road.

Neither Mr. Ormond nor Mr. Pearce qualified as experts on fish farming and their testimony as to value and damage on such potential use was without logical basis. Mr. Ormond built a dam which impounded the water on the north 92.62 acres of his land and it was this act rather than the taking of the right-of-way that reduced this acreage to flooded timberland, as testified' by Mr.. Pearce. According to Mr. Pearce this 92.62 acres of land north of the right-of-way was damaged by the right-of-way taking in ,an amount greater than what appears to have been the market price of the entire 262 acre tract when Ormond purchased it in 1961.

Both Mr. Ormond and his expert witness placed considerable emphasis on the value of the land as .a potential fish farm, and this evidence went to the jury for what it was worth. There is no way of determining what the value testimony for potential fish farming was worth to the jury in arriving at its verdict. I consider this testimony worth a great deal to the jury in arriving at its verdict, for I simply find no substantial evidence of severance damage to Ormond’s property which would sustain a verdict in an amount anywhere near $12,000.

I would reverse and remand for a new trial.


source: Caselaw Access Project

author:
John A. Fogleman, Justice.
      Conley Byrd, Justice,

license: Public Domain

text:
    Vada COWAN v. Florence PATRICK
    5-5078
    448 S. W. 2d 336
    Opinion delivered December 22, 1969

      Gannaway & Darrow, for appellant.

      Guy Jones, Phil Stratton, Guy Jones, Jr., for appellee.
   John A. Fogleman, Justice.

Appellant brought suit against appellee and Basil Patrick. When it came to trial, Florence Patrick moved for a dismissal of the complaint as to her without prejudice at the conclusion of appellant’s proof on the ground that there was no evidence of a joint venture with Basil Patrick. The circuit judge stated that he had no discretion to do this, but that there was no evidence of a joint venture between the defendants to submit to the jury on the question of Mrs. Patrick’s negligence and liability to appellant. Although the judge stated that there was every indication that Florence Patrick was joined as a party defendant for. the pupose of establishing venue, he directed a verdict in her favor, after which appellant took a non-suit as to a counterclaim. Judgment was entered accordingly on October 9, 1968. On December 12, 1968, during the same term, a hearing was had, as a result of which the court entered a substituted and amended judgment reciting that it had dismissed the complaint of appellant against Florence Patrick on the grounds of insufficient evidence to present the issue of joint enterprise to the jury. This appeal was taken from that judgment.

Appellant objected to the action taken at the December hearing on the basis that the court could not have done anything in the circumstances other than direct a verdict. The trial judge stated that the original judgment did not correctly set forth that which was done or meant to be done and that the judgment in order to reflect the true purpose, meaning and intent of the court would have to reflect the finding that Florence Patrick was improperly made a party defendant merely for the purpose of establishing venue.

Appellant relies on two points for reversal. The first is that the court could do nothing other than direct a verdict if she failed to produce evidence to support her complaint against appellee Florence Patrick. The second is that the court erred in entering the substituted and amended judgment. We shall discuss these points in reverse of the order stated.

The gist' of appellant’s argument on the second point is that the' court did actually direct a verdict, so that the action taken on December 12 was erroneous. This argument overlooks the control which a court has over its judgments during the term at which rendered. Before the expiration of the term, a trial court has the inherent power to modify its judgments not only to reflect the action actually taken but to correct its own erroneous action.

A court’s plenary control of its judgments during the term is inherent and exists without reference to any statute. Wright v. Ford, 216 Ark. 55, 224 S. W. 2d 50; Wells Fargo & Co. Express v. W. B. Baker Lumber Co., 107 Ark. 415, 155 S. W. 122. This inherent control includes the power to modify a judgment for sufficient cause without requiring the formality of a motion to do so. Wilkerson v. Johnston, 211 Ark. 170, 200 S. W. 2d 87; Stinson v. Stinson, 203 Ark. 888, 159 S. W. 2d 446; American Building & Loan Assn. v. Memphis Furn. Mfg. Co., 185 Ark. 762, 49 S. W. 2d 377; Democrat Printing & Lithographing Co. v. Van Buren County, 184 Ark. 972, 43 S. W. 2d 1075; Wells Fargo & Co. Express v. W. B. Baker Lumber Co., supra. In the exercise of this power, the court may review and correct any errors into which it may have fallen during the term. T. J. Moss Tie Co. v. Miller, 169 Ark. 657, 276 S. W. 586.

In Underwood v. Sledge, 27 Ark. 295, one- of the leading and more frequently cited eases on this subject, we had this to say:

“It is certainly good policy in the law to allow courts an hour’s reflection; time to revise hasty action, correct mistakes and review such error as they may have fallen into for want of sufficient consideration, and to this end they have, during their respective terms, to make up their records and fully consider the propriety of the judgments, and to review and correct any mistakes, errors, or indiscretions into which they may have fallen during the term, and when such revision is had, the action of the court .and the record stands precisely as if no such former mistake or erroneous judgment had ever been given or entered.”

Earlier we had held that it was competent for a circuit court to modify or change its proceedings and judgments at any time during the term at which they were had, so long as the action was not capricious or arbitrary, but was in the exercise of a just legal discretion. Campbell v. Garven, 5 Ark. 485.

The court’s discretion to vacate an improper judgment before the lapse of the term will not be controlled on appeal. Wright v. Ford, 216 Ark. 55, 224 S. W. 2d 50.

Since the trial court had the inherent power to modify its judgment, we must determine whether the court could take the action finally taken, i. e., dismiss the complaint as to Florence Patrick for insufficient evidence to present the issue of joint enterprise to the jury. The abbreviated record submitted consists only of the proceedings in chambers on October 2, the judgment of October 9, the proceedings before the court on December 12 and the substituted .and amended judgment then entered. There is no serious contention that the circuit judge erroneously stated that there was insufficient evidence to present a jury question as to the liability of Florence Patrick as a joint venturer with Basil Patrick. Ordinarily, a trial judge cannot require a plaintiff to take a peremptory nonsuit because of a failure of proof. The only proper action in such a case is to direct a verdict.

Yet, this court has recognized that there are circumstances under which a circuit court has the. power to dismiss an action which is shown to have been brought without merit and which constitutes an abuse of process. Heard v. McCabe, 130 Ark. 185, 196 S. W. 917. In that case we sustained the circuit court’s' dismissal of a complaint upon a finding that the cause was without merit and was brought for vexatious purposes. This ground is not one of those recognized in Ark. Stat. Ann. § 27-1405 (Repl. 1962) as the basis of a dismissal without prejudice, so it is clear that the statute does not necessarily preclude the. dismissal of a complaint on other grounds.

The principle involved here is treated in Pomeroy, Code Remedies, pp. 313-317, §§ 191 and 192 (5th ed. 1929). We quote portions of these sections as follows:

“* * * When a legal action is brought against two or more defendants upon an alleged joint liability, even though based upon a joint contract, and one or more of. them .are, so far as they are individually concerned, properly sued, but the others are improperly united, the defendants properly sued have no cause of complaint whatsoever, in any form, on account Of the misjoinder; they cannot demur or an-SAver for defect of parties, because there is no ‘defect;’ they cannot demur generally for Avant of sufficient facts, because sufficient facts are averred as against them; they cannot demur or answer on account of this misjoinder, because that particular ground of objection is not provided for by the codes. If on the trial the cause of action is proved against them, but none against them and the others, still the plaintiff will not he absolutely nonsuited; he will recover Ms judgment against them according to the right of action established by the proof; while as against the other defendants he will fail, and will be nonsuited, or his complaint be dismissed. # # #
The situation of those parties improperly joined as co-defendants is, of course, very different from that just described. The very statement of the case assumes that the action is wrongly brought as against them; that, either as disclosed by the allegations of the plaintiff’s pleading, or as discovered by the evidence on the trial, no cause of action exists against them, notwithstanding the one which exists against their co-defendants. If, therefore, in such a case, it appears on the face of the complaint or petition that one or more persons have been improperly made defendants, such persons may present the objection by a demurrer, not on the ground of a ‘defect’ of parties, but on the ground that the plaintiff’s pleading does not state facts sufficient to constitute a cause of action against them. * * * If the absence of a cause, of action does not appear on the face of the plaintiff’s pleading, the defence may be set up in the separate answer or answers of the parties who rely upon it. Finally, whatever be the completeness or defect of the allegations made by the plaintiff and of the issues raised in the answers of the defendants, if on the trial the evidence fails to establish a cause of action against some portion of the defendants, and it thus appears that they had been wrongfully proceeded against in the action, the plaintiff will be nonsuited, or his complaint or petition dismissed as to them, and his recovery will be limited to the others against whom a cause of action is made out. The foregoing rules are sustained by the cases with almost absolute unanimity. These are the more regular and formal modes of raising the questions as to misjoinder by those defondants who are thus wrongfully made parties to a suit; but there undoubtedly may be cases in which the court will proceed in a more summary manner, and will strike off the name of a party on his mere motion. Such cases must of necessity be somewhat exceptional, for, as a general rule, the rights and liabilities of the parties to the record will not be determined on motion or by any other means except a formal trial of the issues.”

We think that appellee’s motion was one of the procedures set out above. It was as follows:

“Your Honor, at the close of all of the testimony on the part of the plaintiff, Yada Cowan, and upon the resting of the evidence and testimony for the plaintiff, counsel for the defendant Florence Patrick moves for a dismissal without prejudice of the Complaint of the plaintiff as to the defendant, Florence Patrick, on the grounds that Florence Patrick is in this cause as a defendant on allegation of joint venture and there is no evidence to that effect. Testimony has not been presented by the plaintiff to carry out the burden as requested [required] by the laws of Arkansas to prove joint venture. ’ ’

This motion was in substance a motion for dismissal of the complaint without prejudice and was an appropriate means of invoking the powers of the court in this regard under the authorities above cited.

Appellant argues, however, that her complaint could not be dismissed without prejudice over her objection, relying upon Ark. Stat. Ann. § 27-1405 (Repl. 1962) and cases such as Martin & Van Horn v. Webb, 5 Ark. 72; Ringo v. Field, 6 Ark. 43; Hill, McLean & Co. v. Rucker, 14 Ark. 706. As to the cases relied upon, it would be sufficient to say that all of them were decided years before the adoption of the civil code. We think that the procedures set out in Pomeroy are much more appropriate to the code practice. No question pertaining to joint liability was involved in either of these cases, nor is it mentioned in the statute. Furthermore, we have pointed out that the grounds listed in the statute did not exclude other grounds for dismissal of a complaint without merit when an abuse of process results.

If we accepted appellant’s arguments, a plaintiff might fix a venue favorable to him for the trial of a counterclaim of one having no liability to him whatever, by the subterfuge of alleging a fictitious joint liability, knowing full well that there could be no factual or legal basis for that liability. This would be a most undesirable result, which we do not believe is intended by our procedural statutes. The use of subterfuge to fix venue in other cases has been rejected by us. See Robinson v. Bossinger., 195 Ark. 445, 112 S. W. 2d 637 and cases cited therein. Under our law, such a possibility is avoided.

The argument that such a dismissal cannot be without prejudice cannot be sustained. In applying Ark. Stat. Ann. § 37-222 (Eepl. 1962), permitting a new suit after a plaintiff had suffered a nonsuit, we applied the rule stated in State Bank v. Magness, 11 Ark. 343, that a new suit might be brought by a plaintiff who, from causes incident to administration of the law, is compelled to abandon an action, whether by his own act or by the act of the court, when either would leave a cause of action determined. Wheeler v. Wallingsford, 229 Ark. 576, 317 S. W. 2d 153. See also Forschler v. Cash, 128 Ark. 492, 194 S. W. 1029.

The judgment is affirmed

Byrd, J., dissents.

Conley Byrd, Justice,

dissenting. My dissent -to the majority opinion’s amendment of Ark. Stat. Ann. § 27-1405 (Repl. 1962) is based upon the fact that civil procedure in this State is controlled-by legislative act. Ark. Stat. Ann. § 27-1405 is as follows:

“DISMISSAL OF ACTIONS. — An action may be dismissed without prejudice to a future action:
First. By the plaintiff before the final submission of the case to the jury, or to the court, where the trial is by the court.
Second. By the court where the plaintiff fails to appear on the trial.
Third. By the court for the want of necessary parties.
Fourth. By the court on the application of some of the defendants, where there are others whom the plaintiff fails to prosecute with diligence.
Fifth. By the court, for disobedience by the plaintiff of an order concerning the proceedings in the action.
In all other cases, upon the trial of the action, the decision must be upon the merits. [Civil Code, § 402;...]”

It will be noted that the General Assembly, after setting up five grounds for dismissal of a complaint, provided that: “In all other cases Kupon the trial of the action, the decision must he upon the merits.’’ When we add an additional ground for dismissal it appears to me that we are but “LEGISLATING.”

If I were at liberty to legislate I would go further and provide that when it appears that a cause of action is filed in a particular jurisdiction because ■ of “a race to the court house” and for purposes of fixing venue only then the trial court in its discretion may transfer the cause to the county in which the cause of action could most conveniently be tried.

Because I conscientiously believe that the Supreme Court should only interpret the laws as it finds them and leave to the General Assembly the amendments thereof, I dissent from the action here taken by the majority.

      The court may without question dismiss an action upon other grounds not material here. Ark. Stat. Ann. § 27-1405 (Repl. 1962).

      Under the common law, when it appeared upon proof on the general issue that there was a misjoinder of defendants, a nonsuit as to those improperly joined seems to have also been the proper remedy. Harris v. North, 78 W. Va. 76, 88 S. E. 603, 1 A. L. R. 356 (1916).


author: John A. Fogleman, Justice.

text:
    Glen DAVIS and Ralph GIESSOW v. Robert O. McBRIDE
    5-5103
    448 S. W. 2d 37
    Opinion delivered December 22, 1969

      Williams & Williams, for appellants.

      James O. Burnett, for appellee.
   John A. Fogleman, Justice.

Appellee brought an action against appellants and one Ivan Bose to recover for damages to his boat. He alleged that Bose, Giessow and Davis d/b/a Prairie Creek Boat Dock were engaged in the business of storage of watercraft. He asserted that the damage occurred while the boat was held in storage by appellants for compensation. A default judgment was rendered against appellants upon their failure to answer. After the expiration of the term at which the judgment was rendered, appellants filed a complaint alleging that, by reason of misfortune and unavoidable casualty, they failed to appear and plead a valid defense based on impropriety of venue. By an amendment to this com'plaint, appellants alleged that the boat dock at which the boat was stored was owned and operated by a corporation of which Ivan Bose was president and of which appellants were employees. They also alleged that Bose was to have secured legal representation for all parties and that they had assumed that he had done so until the property of one of appellants was attached.

Ivan Bose testified that he was served with a summons, which he took to his attorney and that he told appellant Davis that he would have his attorney handle the summons. He also stated that he had spoken to his attorney in behalf of appellants and had told them they could not be liable because they did not own any of the corporation.

Davis testified that he gave the summons with which he was served to Bose and relied upon his assurance that the matter would be taken care of, that he was merely a dock hand and had no contact with appellee or his boat. Giessow did not testify.

The attorney testified that Bose came to him shortly after the summons was served, requesting that he take care of “us” in the matter; that he had represented the corporation, but did not know either appellant; that he filed an answer for Bose, assuming that “us” referred to the corporation, and that he filed the action to set aside the judgment when Bose called and advised that an execution had been levied against Davis’ property.

The trial court dismissed appellants’ complaint, finding that they were obviously negligent and entitled to no relief because of unavoidable casualty. From that judgment comes this appeal.

Appellants assert that the court erred in this finding. After the expiration of the term at which a judgment is rendered it can be set aside only upon the grounds specified in Ark. Stat. Ann. § 29-506 (Bepl. 1962), by bill of review in chancery, or for error of law apparent upon the face of the record. Karoley v. A. R. & T. Electronics, Inc., 235 Ark. 609, 363 S. W. 2d 120; Wear v. Boydstone, 230 Ark. 580, 324 S. W. 2d 337; Jamieson v. Jamieson, 223 Ark. 845, 268 S. W. 2d 881; Wright v. Ford, 216 Ark. 55, 224 S. W. 2d 50; Hill v. Teague, 194 Ark. 552, 108 S. W. 2d 889. The setting-aside of a judgment on at least one of the statutory grounds, i. e., for unavoidable casualty or misfortune preventing the party from appearing or defending, lies within the sound judicial discretion of the trial court. United Order of Good Samaritans v. Bryant, 186 Ark. 960, 57 S. W. 2d 399. See also Byrd v. Brooks, 216 Ark. 781, 227 S. W. 2d 961. The action of the trial court will not be held erroneous on appeal unless there was an abuse of discretion. Bartlett v. Standard Life and Accident Insurance Co., 223 Ark. 37, 264 S. W. 2d 46. Parties served with summons must thereafter take notice of the pendency of the suit and subsequent jjroceedings. A party seeking relief against a judgment on the ground of unavoidable casualty must show that he has been diligent and without negligence. Lambie v. W. T. Rawleigh Co., 178 Ark. 1019, 14 S. W. 2d 245; Bickerstaff v. Harmonia Fire Ins. Co., 199 Ark. 424, 133 S. W. 2d 890. There is substantial evidence that appellants were negligent in their attention to the matter, so we cannot say that the trial court abused its discretion in denying relief against the judgment.

Since we find no abuse of discretion in the finding of the trial court that appellants were not without negligence, it is not necessary that we consider whether appellants asserted a meritorious defense.

The judgment is affirmed.

Jones, J., dissents.


author: J. Fred Jones, Justice.

text:
    Roland H. TROXELL et ux v. T. G. SANDUSKY et ux
    5-5073
    448 S. W. 2d 28
    Opinion delivered December 22, 1969

      Carrol Cannon, for appellants.

      Fletcher Long, Jr., for appellees.
   J. Fred Jones, Justice.

This is an appeal by the defendants, Mr. and Mrs. Troxell, from a decree of the St. Francis Chancery Court setting aside the sale of real property from the Troxells to the original plaintiffs, Mr. and Mrs. Sandusky.

The Troxells owned a house and lot on the bank of Lake St. Francis and listed the property for sale with Mrs. Walker, a real estate agent. Mrs. Walker showed the property to Mr. and Mrs. Sandusky who- subsequently purchased it direct from the Troxells for $14,750. One thousand two hundred fifty dollars of the purchase price was paid in cash and the Sanduskys executed their note, secured by a mortgage on the property, for the balance of $13,500 to be paid over a 15 year period in monthly installments of $121.33 per month. The Sanduskys took title by warranty deed dated November 24, 1967, and moved into the house on that day or the next.

Lake St. Francis was formed by impounding the water in a small natural stream behind a dam across the stream. The inundated channel of the original stream was near the property involved, and a shelf or small plateau extended from the edge of the original stream to the higher lake bank upon which Troxells built the house they sold to the Sanduskys. The lakeshore was all of loose type soil and the water level of the lake fluctuated with weather conditions, sometimes rising well above the shelf leading out to the original stream bank in wet weather and leaving the shelf exposed to view in dry weather. A concrete walk was built from the house to the edge of the lake bank above the shelf and at this point the lakeshore dropped vertically from the end of the walk six or eight feet to the shelf, and then farther out toward the original stream channel, the shelf dropped more or less vertically to the bottom of the original channel. When the lake water was at its full height, the surface of the lake was only two or three feet lower than the end of the walk and the shelf on out to the original channel of the stream was inundated beneath the surface of the lake. When the lake water was at its lowest level in dry weather, the shelf, at and below the end of the walk, was exposed to veiw.

The Sanduskys were first shown the property by the agent, Mrs. Walker, in the latter part of October when the water level in the lake was low and the shelf about six or eight feet below the end of the walk was exposed. Several slabs of broken-up concrete had been placed on the shelf to prevent erosion. Soon after the Sanduskys took possession of the property and moved into the house, the level of the lake came up and during the succeeding months the action of the waves caused erosion of the lakeshore toward the house and cut the ■bank from under the end of the walk. On January 26, 1968, the Sanduskys filed their complaint for cancellation of their note and mortgage, as well as for damages, because of fraudulent misrepresentations as to the stabilization of the lakeshore line adjacent to the property. The case was tried on December 6, 1968, and the chancellor rendered a decree on March 10, 1969, finding that there was no fraud attending the transaction, but the petition was granted because of mutual mistake. The decree recites, in part, as follows:

“Soon after the purchase the buyer became aware of the erosion and instituted the action herein.
The proof was not sufficient to show fraudulent intent on the part of the Vendor; however, it is my opinion that fraudulent intent is not necessarily a prerequisite element in a question of rescission. In 228 Ark. 824, Blythe v. Coney, the erroneous assumption of the parties to a purchase contract that there was ,a sufficient supply of city water to a dwelling house to make it livable, was held to constitute a mutual mistake of a material fact giving the purchaser the right to rescind.
Herein, the buyer, when learning of an erosion problem before purchase, duly inquired, which w,as his responsibility, and was led to believe that the erosion problem was corrected by a material affirmative remedy; namely, the large concrete slabs which were shown to him.
Conceding that the Vendor had no fraudulent intent he offered the property for sale upon the basis that the erosion had been stopped; to say otherwise would be an admission that he sold the property knowing that it would wash and erode wherein he should have disclosed it to the buyer. To deny relief to the Plaintiffs thus requiring them, in addition to the purchase price, to expend a large amount for corrective measures in order to prevent further erosion and ultimate destruction of the property, would be unconscionable in my opinion.
IT IS THEREFORE CONSIDERED, ORDERED AND DECREED that the plaintiffs have and recover the sum of $1,250.00 from the defendants for the down payment on purchase price on the property described in the deed of trust; that the plaintiffs shall have restored to them the amounts paid into the registry of the court tptaling $727.98; that the deed of trust at Book 296, page 385, Records of St. Francis County as well as the note described therein shall be in all things cancelled and plaintiffs discharged of any liability thereon; that the plaintiffs restore to the defendants the furnishings or other personal property which were in the dwelling and were a part of the sale; that the defendants ’ motion to file cross-complaint is denied; that the deed from defendants to the plaintiffs to the property described as recorded at Book 296, Page 385 of the Records of St. Francis County is cancelled; and that the plaintiffs have and recover from the defendants the sum of $63.70 costs herein expended.
All of the money payments mentioned herein shall bear interest at the rate of six percent (6%) per annum from the date of this order until paid.”

On appeal to this court the Troxells rely on the following points for reversal:

‘ ‘ The court erred in holding that under the evidence, the appellees were entitled to rescission of the sale and cancellation of the purchase money mortgage. The court erred, if rescission is granted, in failing to charge the rental value of the property against appellees.”

We are of the opinion that the decree of the chancellor is not clearly against the preponderance of the evidence as to the first point, but we agree with Mr. and Mrs. Troxell on their second point. There is considerable conflict in the evidence as to the extent of erosion, and as to the width of the shelf when concrete slabs were placed on it. There is no conflict in the evidence that there was considerable erosion of the lakeshore adjacent to the house and there is. no question that erosion presented a problem, both before and after the sale to Mr. and Mrs. Sandusky. The Sanduskys testified that the lakeshore or bank extended two or three feet beyond the end of the walk when they purchased the property and there is no testimony to the contrary. It is obvious from the photographs offered in evidence that the ground had eroded from under the end of the sidewalk. The evidence is clear that Mr. Troxell had placed ten or twelve large slabs of concrete on the ledge under the bank at the end of the walk as a protection against erosion, and the evidence is clear that all these slabs of concrete, except three, had disappeared into the deep channel of the original stream when the shelf they were on eroded from under them.

The Sanduskys testified that when agent Walker first showed them the property, there were eight or nine slabs of concrete visible on the ledge below the bank at the end of the sidewalk; that the slabs of concrete reached all the way to the end of the sidewalk and that they asked Mrs. Walker about whether the bank had been washing. Mr. Sandusky testified:

“A. I asked her this, if the bank had been washing and she said it had a little bit but they had put slabs in and it had stopped it.”

Mrs. Sandusky testified:

“A. Well, we went outside and my husband and Mrs. Walker were standing on the edge of the bank and I hadn’t gone up to the edge of the bank and I heard him say to her ‘does the bank wash’ and she said something like ‘a little bit but that is what the slabs are for’ and she said ‘that stopped it,’ so I walked over there and I looked down at the slabs and the water, you could just barely see the slabs, it was just almost on top of the slabs, you could not see what the slabs were laying on. You could just barely see the slabs.”

Mrs. Walker denied that there was any discussion about the bank eroding and denied that any questions were asked or answers made concerning it.

Mr. Troxell testified that two or three feet of the bank or lakeshore had eroded into the lake and that he placed the concrete slabs to prevent erosion. He testified as follows:

“Q. Now, Mr. Troxell has the — -I believe you testified that the high bank has come back two or three feet ... is that correct?
A. Yes, sir, I would say from 2 to 3 feet.
Q. You heard this testimony about the concrete blocks being down there?
A. Yes, sir.
Q. Was that testimony correct?
A. Yes, sir.
Q. Was the purpose of the concrete blocks to stop any bank erosion?
A. Yes, sir, to stop the slapping of the waves against the bank.
Q. And .as far as you were concerned it had stopped satisfactory?
A. I thought it had. It did a pretty good job. I didn’t go out there much in the last two years. ’ ’

Mr. Troxell testified that Mr. Sandusky asked him about the concrete slabs and that he told Mr. Sandusky he had put them there but did not know whether they would stop the erosion or not.

The evidence is clear that the lot sold to the Sanduskys was being eroded away by the waves on the lake and that Mr. Troxell put concrete slabs along the bank to prevent further erosion. Though Mrs. Walker denies that she advised the Sanduskys that the concrete slabs had stopped the erosion, or that she discussed the erosion problem with them at all, Mr. Troxell did discuss the problem with the Sanduskys and Mr. Troxell testified that he thought that the concrete slabs had stopped the erosion. The chancellor’s finding that Mr. and Mrs. Sandusky believed, as did Mr. Troxell, that the concrete slabs had, and would, serve the purpose for which they were placed by Troxell and that the property was sold by Troxells and purchased by Sanduskys on this assumption, is not against the preponderance of the evidence. Subsequent events proved that Mr. Troxell, as well as Mr. and Mrs. Sandusky, was mistaken in the belief that the concrete slabs had stopped, and would prevent, further erosion, because it is clear that they did not. As a matter of fact the shelf, or original stream bank, on which the slabs were placed, eroded out from under the slabs causing them to slide or drop into the main channel of the original stream, and the erosion of the lot from the lake toward the house continued as before.

We are of the opinion that the chancellor was correct in his interpretation of our holding in Blythe v. Coney, 228 Ark. 824, 310 S. W. 2d 485, as recited in the decree, supra. The chancellor viewed the property involved in the case at bar; he saw the witnesses and was in a position to observe their demeanor while testifying, and we are unable to say that the chancellor’s finding that there was a mutual mistake of a material fact is clearly against the preponderance of the evidence. We conclude, therefore, that the chancellor did not err in cancelling the notes and mortgage and setting aside the conveyance.

We are of the opinion, however, that the chancellor did err in not awarding a fair rental value of the property to Troxell for the period of time it was occupied by the Sanduskys. (See Dunham v. Phillips, 154 Ark. 87, 241 S. W. 361). The proprety was renting for $115 per month at the time Sanduskys moved in on the day or next day after the deed was executed on November 24, 1967, so we conclude that $115 per month was fair rental value. The case was tried in chancery court on December 6, 1968, and Mr. Troxell testified, without contradiction, that he first knew that the Sanduskys had vacated the premises two or three days before the trial. Consequently, Troxell is entitled to the rental value of the premises for 12 months at $115 per month, in the total amount of $1,380, for which he should take credit against the payments made by the Sanduskys to Troxell and into the registry of the court. With this exception the decree of the chancellor is affirmed.

Affirmed in part and reversed in part.

Harris, C. J., and Fogleman, J., dissent as to affirmance.


text:
    Arthur G. BRICKEY, Sr., Adm’r v. B. L. LACY et al
    5-5082
    448 S. W. 2d 331
    Opinion delivered December 22, 1969

      Mitchell Moore, for appellant.

      Bruce Ivy and James Hyatt, Jr., for appellees.
   J. Fred Jones, Justice.

This is an appeal by Arthur Gr. Brickey, Sr., administrator of the estate of Mabel Brickey Ayres, from an order of the Mississippi Probate Court allowing a claim by B. L. Lacy against the Ayres estate in the amount of $8,028.26. The only point in issue is stated in the point relied on by Brickey as follows:

“The probate court erred in allowing the claim of B. L. Laej because the claim is barred by the statute of nonclaim. ’ ’

This case is a sequel to Arthur G. Brickey, Sr., Adm'r v. B. L. Lacy et al, 245 Ark. 860, 435 S. W. 2d 443, and the facts are as follows: Mrs. Ayres owned farm lands in Mississippi County, Arkansas, and for a number of years had rented some of her land to Lacy on a year-to-year basis running from January 1 to January 1 the following year, and requiring six months’ notice for termination. (See Jonesboro Trust Co. v. Harbough, 155 Ark. 416, 244 S. W. 455). Mrs. Ayres died on September 7, 1963 — too late in the year for her administrator to terminate the year-to-year lease by giving the required notice six months before January 1, 1964. Brickey was appointed administrator of Mrs. Ayres’ estate and gave a quit notice to Lacy on November 27, 1963. Brickey sought and obtained an order of the probate court authorizing him to bring an action against Lacy in unlawful detainer and such action was commenced in February 1964, by Mr. Brickey as administrator. Lacy elected to surrender possession rather than retain it under cross-bond, but filed an answer denying Brickey’s right to possession and praying damages caused by his ouster. The trial of the unlawful detainer action in the circuit court resulted in a judgment for damages in favor of Lacy, which was sustained by this court on appeal, in the amount of $8,028.26 (Brickey v. Lacy, supra). Lacy filed claim against the estate for the amount of the judgment and the claim was .allowed by the probate court.

We do not agree with the appellant that this claim was barred by the statute of nonclaim. Ark. Stat. Ann. § 62-2111 (Supp. 1967) provides, in part, as follows:

“Promptly after the letters have been granted on the estate of a deceased person, the personal representative shall cause to be published a notice of his appointment, stating the date thereof, and requiring all persons having claims against the estate to exhibit them, properly verified to him, within six months from the date of the first publication of the notice, or they shall be forever barred and precluded from any benefit in such estate.”

The statute of nonclaim relied on by Brickey, Ark. jStat. Ann. § 62-2601 (a) (Supp. 1967), provides as follows:

“. . . all claims against a decedent’s estate, other than expenses of administration and claims of the United States which, under valid laws of the United States, are not barrable by a statute of nonclaim, but including claims of a state or territory of the United States, and any subdivision thereof, whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract, or otherwise, shall be forever barred as against the estate, the personal representative, the heirs and devisees of the decedent, unless verified and presented to the personal representative or filed with the court within six months after the date of the first publication of notice to creditors.”

We are of the opinion that the demand of Lacy in the case at bar arises as a cost of administration and is not such demand as is contemplated by § 62-2601 (a), supra, and is not barred by the six months’ period for exhibition provided in § 62-2111, supra, and presented or filed as provided in § 62-2601 (a).

In his petition to the probate court for authority to evict Lacy, Brickey, as administrator, simply set out that all the heirs of the decedent had not been determined; that

“in order to preserve the property, to protect the rights and interests of persons having interest therein and for the benefit of the estate, the administrator should be permitted and authorized to contract for and collect rents and earnings therefrom, pay taxes and special assessments thereon, make necessary repairs thereon, maintain the same in a tenantable condition, preserve same against deterioration, protect same by insurance, and maintain or defend an action for the possession thereof, or to determine or protect the title until such property is sold or is delivered to the distributees thereof, or until the estate is settled.” (Emphasis supplied) .

Brickey then alleged that Lacy still owed for advances made by the decedent for the 1963 crop, and that it would be to the best interest of the estate that the farm be rented to some other person. The petition set out that Brickey had been offered the sum of $45.10 per acre cash rent for the property for 1964 by W. S. Cockerham and in order to rent the land to Mr. Cockerham it would be necessary to eject Mr. Lacy. The petition then concludes as follows:

“WHEREFORE, petitioner prays an order of this court authorizing and directing him to lease the lands in question to said W. S. Cockerham for the sum of $45.10 per acre for and on behalf of the heirs at law and the estate of Mabel Brickey Ayres, deceased, and that he be authorized and directed to file suit of ejectment against the said B. L. Lacy and any and all persons holding possessions of said lands unlawfully; that he be authorized and directed to pursue and maintain or defend all actions for the possession of said property and for the preservation of same and that the court make a finding that this action is necessary for the preservation of the property, to protect the rights and interest of persons having interest therein, that it is for the benefit of the estate and that it meets all the requirements necessary in Arkansas Statutes Section 62-2401 for the purpose of enabling the Administrator to act for and on behalf of the heirs at law of Mabel Brickey Ayres.”

Lacy had leased the property involved from Mrs. Ayres before her death and when she failed to terminate the year-to-year tenancy relationship by six months ’ notice, Lacy was entitled to continue in possession under his year-to-year tenancy relationship during the calendar year 1964. Lacy had no claim against Mrs. Ayres prior to her death and no claim against her estate, contingent or otherwise, at the time of her death.

In 31 Am. Jur. 2d, Executors and Administrators, § 318, appears the following:

“Contractual obligations which survive the death of the obligor are binding on his executors and administrators in their representative capacity and are enforceable against his estate. Thus, it is not only within the power of an executor or administrator to complete a contract made by his decedent, it is his duty to carry out the contract. If he fails to perform a contract of his decedent which is binding on the estate, he may be compelled to pay damages out of the assets in his hands. . .”

Mr. Brickey Avas the personal representative of the decedent, Mrs. Ayres, and in his representative capacity Avas obligated to honor and carry out the agreements she had made. He alleged that it was to the best interest of the estate and the heirs to eject Mr. Lacy from the land and rent the land to another person for $45.10 cash per acre. He proceeded to eject Mr. Lacy but did so wrongfully and to Mr. Lacy’s damage in the amount of $8,028.26. Mr. Lacy had no claim to file against the estate until it was created by Brickey’s own act in his official capacity as administrator, and as finally determined by this court in Brickey v. Lacy, supra. We hold that the statute of nonclaim, as set out in Ark. Stat. Ann. § 62-2601 (a), supra, does not apply to the facts in this case.

The judgment of the probate court is affirmed.


author: Conley Byrd, Justice.

text:
    ARKANSAS STATE HIGHWAY COMM’N v. Mary Raines JOHNSON et al
    5-5075
    448 S. W. 2d 36
    Opinion delivered December 22, 1969

      Thomas Keys and Virginia Taclcett, lor appellant.

      Graves & Graves, for appellees.
   Conley Byrd, Justice.

The Arkansas State Highway Commission appeals from a verdict and judgment of 45,300 for a taking of 24.09 acres from 334.9 acres owned by appellees Mary Raines Johnson and the heirs of the D. H. Raines Estate for interstate highway construction in Hempstead County.

Initially appellant condemned 11.06 acres of appellees’ land and by amendment increased the taking to 24.09 acres, to accommodate rest areas on the interstate highway. At the time of the taking, all of appellees’ 334 acres was subject to a timber contract covering all timber eight inches and over. Appellant, not wanting the timber cut on the proposed rest areas, contracted to pay the timber contractor the value of the uncut timber. It was stipulated at trial that the before and after valuations would be based on the assumption that all timber eight inches and .above had been cut and removed at the time of taking.

For reversal appellant relies on the following points:

“I. The opinion of Dorsey McRae, appellees’ only value witness, was based on erroneous assumption and not upon fact, and his testimony should have been struck upon appellant’s motion.
II. There is no substantial evidence to support the verdict.”

Appellant’s first point is two-pronged, i. e., (1) Mr. McRae valued the property as though the timber had not been removed, and (2) he erroneously damaged part of the property, referred to as Tract 2, as being landlocked because the access wa's destroyed. So far as Mr. McRae’s value testimony is concerned, a careful review shows that he consistently based his valuations on the assumption that timber eight inches and over had been removed. Appellant’s complaint with reference to McRae’s testimony arises out o£ the following question and answer:

“Q. This is cut over timber land?
A. No, it’s not all. No, you’ve got some there that you found a little later and took for a park, which I guess is the prettiest land on the highway, that ain’t cut over.”

We do not interpret Mr. McRae’s .answer as being an assertion that he valued the land on the basis with the timber in place, but rather a truthful answer to the question asked. For this reason we hold this contention without merit.

The access to the land referred to as Tract 2 had been by a road from the southernmost part of the property, which road was completely severed by the controlled-aecess interstate. Shepherd Road, which was made into an overpass over the interstate, crosses the southwestern corner of Tract 2. The taking in fee included .09 acre for straightening or widening Shepherd Road. The highway department fenced its right of way along Shepherd Road and the. approaches to the overpass. McRae ascribed $2,000 as damage to Tract 2 for loss of access. Appellant argues that McRae’s testimony is valueless because he did not study appellant’s plans and specifications and thus determine that the fenced approach was not a controlled access area, insinuating that the landowners could have access through this fenced area, as .appellant’s appraiser testified. This argument is without merit. This court has recently considered the effect of a fee simple taking on the matter of access and specifically held:

“We hold that a fee simple taking under Act 419 [Ark. Stat. Ann. § 76-544 (Repl. 1957)3 places the predominant control of all lands within the right-of-way in the Commission; that the utilization of the acquired property for highway purposes and for such purposes as are delegated to political subdivisions and utilities will as a matter of law take precedence over all other uses; and that Mrs. Wallace’s [the landowner’s] use of the highway for going in and out of her property can reasonably be expected to be affected.
. . .“From what has been said it is apparent that the nature of Mrs. Wallace’s access may well be substantially impaired; certainly the right of ingress and egress was not established as a matter of law.” Ark. State Highway Comm’n v. Wallace, 247 Ark. handed down Sept. 22, 1969, 444 S. W. 2d 685.

On the question of substantiality of the evidence, Mr. McRae’s testimony of $7,000 was sufficient to support the jury verdict of $5,300.

Affirmed.


author: Frank Holt, Justice.

text:
    William F. HOGUE & Beda Sue Hogue, Husband & Wife v. Ama HOGUE
    5-5019
    448 S. W. 2d 627
    Opinion delivered December 22, 1969
    [Rehearing denied January 26, 1970]

      Joe Hardegree, for appellants.

      Shaw & Shaw, for appellee.
   Frank Holt, Justice.

This litigation results primarily from a disagreement as to the amount of the purchase price and the payments made upon certain lands. The appellee, mother of appellant Wm. F. Hogue, brought an action against him and his wife alleging a constructive trust and seeking reconveyance of 144 acres or, in the alternative, to recover $14,400 as the fair value of the lands which she had previously conveyed to the appellants; $500 annual rent for a period of ten years less $2,000 credit [appellee later abandoned her claim for rent;] $922.21 for her investment in a tractor; and an accounting from the appellants with respect to her cattle which she later testified to be of the value of approximately $1,800. The issues were joined by the appellants’ answer denying appellee’s allegations and specifically pleading the defenses of the statutes of frauds and limitations and asserting that the appellants had owned the lands in question since 1957. At the conclusion of the trial the chancellor approved the motions of both parties that the pleadings be amended to conform to the proof as is permitted by Ark. Stat. Ann. § 27-1160 (Eepl. 1962).

The chancellor decreed that the property was subject to a constructive trust in favor of the appellee in the sum of $8,626.92; that the appellee had the right to use and occupy the dwelling on the property for her lifetime jointly with the appellants and that if the joint use and occupancy of the dwelling should become unbearable to the appellee and appellants, then the right of the appellants must yield to the right of the appellee; that the appellee should have the right to keep her livestock on the property; that because of offsetting equities between the parties the appellee should not recover anything for the .alleged sale of her cattle or her equity in a tractor; that the parties had numerous transactions between themselves by deeds, mortgages and other business ventures, mostly for the benefit of the appellants; that all the deeds .and other transactions between the parties were inferior, ineffective, and if effective, merged into the deed dated June 6, 1966, wherein appellee conveyed the lands therein described [144 acres] to the appellants; that the consideration for said conveyance was for the amount the appellee had in her property which is the sum of $8,626.92 and this consideration is unpaid. From that decree comes this appeal.

For reversal appellants contend that the finding of the court that a constructive trust existed is not supported by the required “extraordinary burden of proof” and that no constructive trust existed without fraud at the inception. Upon a review de novo we are of the opinion that the better view is that a vendor’s lien for the unpaid purchase price, instead of a constructive trust, existed in favor of the appellee.

The appellee is 69 years of age and without any formal education. Her son, the appellant, is 44 years of age with a college education. She has four other adult children. The appellee and her husband acquired 160 acres of land in 1939. When she and her husband divorced in 1944, she acquired title to this property. At about this same time she purchased an adjoining 40 acres in the name of her son, the appellant, from an allotment made to her by him while he was in the military service. In 1957, at a time when appellants were elsewhere teaching school or in the poultry business, appellee deeded 120 acres of her property to appellants in fee simple. She retained 40 acres, which was in the soil bank, “as security.” In 1958 the 120 acres were reconveyed to appellee for the purpose of securing a $5,000 FHA loan in appellee’s name. This money was used to construct a new house on the property. In 1963 the appellee deeded to appellants her entire 160 acres. In the meantime appellants had conveyed to appellee, without her knowledge and for their own purposes, their original 40 acres. Appellee also conveyed this acreage along with the 160 acres. The appellants, who had possession of their 1963 deed, did not record it. In 1966 the appellee made another warranty deed (a correction deed she claims) to the appellants to the same property excluding, however, a 12-acre tract which appellee, unknown to the appellants, had deeded to one of her other children. Upon receipt of the 1966 deed the appellants recorded it. Shortly thereafter they recorded the 1963 deed which included the 12-acre tract. All of the deeds were warranty deeds reciting a nominal cash consideration and no encumbrances. In March 1968 the appellee filed her complaint alleging, among other things previously indicated, an unpaid purchase price of $14,400.

It appears undisputed that the appellee agreed to convey certain lands to the appellants. According to her evidence she agreed that the consideration would be for what “I’ve got in it” providing she would have a home there for as long as she lived. She testified that the appellants agreed to pay her $6,333 which, according to her computations, represented what she had in the property before the new house was built. In 1958, when the property was reconveyed to her, she borrowed $5,000 in her name for the construction of a new home according to her own plans and specifications. When the house was constructed the appellants were “supposed to pay” to her “what she paid into the house.” Further, it was the understanding that appellants were to pay her in full before they recorded their deed and that they breached their agreement by recording the deeds in 1966 before paying her the agreed purchase price. She testified and offered some receipts from the FHA that she had made payments in her name on the FHA loan to the extent of $2,293.92. She claims her 1966 deed to appellants was a correction deed for the purpose of excluding 12 acres that were included by mistake in the 1963 deed. It was understood by appellants, according to appellee’s evidence, that this 12 acres plus 4 acres, or a total of 16 acres, were to be deeded by appellee to another one of her children.

Appellee testified that appellants never “paid another penny” after they made a $500 down payment by check in April 1957. She contends they are due no credit for this $500 down payment because it was used by her, with appellants’ consent, to apply on an FHA mortgage on a tractor which appellants later acquired. She also admits that later she received $1,500 cash from the appellants. However, she testified this was used for expenses in the operation of the farm for appellants’ benefit. She testified that she first learned in 1966 that appellants were not going to perform their agreement when “he told me that I had to move several times * * * he would just say you know you cannot stay here and you know you can’t.” They further breached their agreement by refusing to “settle” with her and by filing her deeds before full payment of the agreed purchase price.

The appellants’ version is that the sale price agreed upon was $2,500 for the 160 acres. It is undisputed that they made a $500 down payment preceding appellee’s deeding to them the 120 acres in 1957. Forty acres were not conveyed to them with the understanding that it would stay in appellee’s name “as security” and that the soil bank payments derived therefrom would be applied to the purchase price “until she was satisfied she had received full payment.” Appellants testified that in 1963 the appellee deeded the entire farm to them because she was satisfied they had paid all they owed her and that she never mentioned the figure of $6,333. Further, that they never agreed appellee could have a home with them for the rest of her life. It was appellants’ position that they had never refused appellee a place to live and it was their obligation to see that she had a place to live but that this was not a part of the consideration.

It appears undisputed that there was no disagreement between the parties from the date of the original transaction in 1957 until the appellants moved onto the farm with appellee in 1966. Then family discord erupted which was further precipitated by appellee’s 1966 correction deed to appellants that excluded 12 acres from the unrecorded 1963 conveyance. It seems appellants did not object to a previous transfer of 4 acres by appellee to her daughter, the one to whom she also deeded the 12 acres.

We cannot say there is a lack of clear and convincing evidence to support the chancellor’s findings except as to the $500 down payment and the $1,500 payment made by the appellants and admittedly received by the appellee. In our view the appellants are entitled to dethis $2,000 from the $8,626.92 which the chancellor found as the unpaid purchase price. This, of course, would leave a balance of $6,626.92. There are other credits and claims made by both parties. It would serve no useful purpose to detail them since the chancellor’s findings on these issues are not deemed to be against the preponderance of the evidence.

It is well established that the relation of a vendor and purchaser is essentially that of a mortgagor and mortgagee and entitles the vendor to an equitable lien upon the failure of the vendee to pay the true purchase price. Brooks v. Smith, 215 Ark. 421, 220 S. W. 2d 801 (1949); Jones, Arkansas Titles, § 76, p. 60 (1935), and the Annotated Supplement, § 103, p. 53 (1959). In the case at bar we hold that the appellee has an equitable lien to the extent of $6,626.92 upon the property conveyed to appellants by her 1966 deed.

We cannot agree with appellants’ plea that the statute of frauds and statute of limitations apply in the case at bar. The true consideration in a deed is always subject to being shown by parol evidence. Wood v. Swift, 244 Ark. 929, 428 S. W. 2d 77 (1968). As to the statute of frauds, in 48 Am. Jur., Statute of Frauds, § 552, p. 857, we find: “Where an oral contract for the sale of land has been executed by ,a conveyance of the land to the vendee in the contract, the mischief at which the statute of frauds is aimed no longer exists, and the remaining stipulations of the contract become enforceable. Where such an oral contract is consummated by the execution of a deed and its acceptance by the vendee or title has otherwise passed in execution of the contract, the vendor may, as a general rule, recover in an action upon the contract the purchase price orally agreed to be paid, # * * .” See, also, Ferguson v. The C. H. Triplett Co., 199 Ark. 546, 134 S. W. 2d 538 (1939) and Lindell Marshall v. I. I. McCray, et al, 241 Ark. 184, 406 S. W. 2d 863 (1966).

In the case at bar the appellants’ title, of course, is dependent upon payment of the balance of the purchase price. In such a situation appellants cannot claim the debt is barred and at the same time assert title. We have said that the statute of limitations is not applicable ag-ainst a vendor and in favor of a vendee in possession until there is an open assertion of the title which is made known to the vendor by the vendee. Jones, Anno. Supp., Arkansas Titles, § 86, p. 32; Evans v. Jeffries, 210 Ark. 807, 198 S. W. 2d 62 (1946). In the case at bar there was evidence that no open assertion of title, based upon payment of the full purchase price, was made until 1966 when appellants recorded appellee’s deed which, according to appellee, was in violation of their agreement.

Appellants contend that the trial court erred in refusing to order an amendment of the pleadings. We find no merit in this contention inasmuch as both parties moved that the pleadings be amended to conform to the proof at the conclusion of the hearing and the court granted both motions.

In the instant case, as we first indicated, there is involved primarily the amount of the purchase price and the credits and payments upon an undisputed agreement to sell the lands. It is essentially an issue of credibility involving the interested parties. In such a situation we are largely guided by the chancellor’s decision. Hickenbottom v. Masterson, 240 Ark. 418, 399 S. W. 2d 662 (1966).

The decree is modified only to the extent that a vendor’s lien exists for $6,626.92 in appellee’s favor on the lands she conveyed in 1966 to the appellants who now have the right to disehargé this lien by payment of this balance, otherwise the right of foreclosure exists.

The decree is remanded with directions to enter a decree consistent with this opinion.

Jones, J., not participating.


author: Prank Holt, Justice.

text:
    BANK CREDIT LIFE INSURANCE COMPANY of Arkansas v. PINE BLUFF NATIONAL BANK
    5-5092
    448 S. W. 2d 333
    Opinion delivered December 22, 1969

      John F. Gibson, Sr. and Walker & Campbell, for appellant.

      Dickey, Dickey & Drake, for appellee.
   Prank Holt, Justice.

The appellant refused to pay to appellee a claim based upon a group life insurance certificate issued by the appellant. The trial court, sitting as a jury, found that the appellant was liable to the appellee for the amount of the certificate. Judgment was accordingly rendered for $1,131.95, $135.83 statutory penalty, $350 attorney’s fee, together with 6% interest. Prom that judgment comes this appeal.

Por reversal appellant first contends that the appellee had no insurable interest and the trial court erred in not directing a verdict for the appellant. We find no merit in this contention. The appellant contracted with A. M. Johnson, an automobile dealer, to “procure and submit applications” for group life insurance from his customers for the appellant. Mr. Johnson’s business name was Abb Johnson Motor Company, Pine Bluff, Arkansas. On May 6, 1966, Mr. Johnson sold J. R. Palmer a truck. In payment of the $1,278 balance Mr. Palmer signed a combined installment contract and promissory note payable to Mr. Johnson. At the same time Mr. Palmer was issued one of appellant’s group credit life insurance certificates in the amount of $1,278. This certificate shows Mr. Palmer as the insured and the appellee, Pine Bluff National Bank, as creditor under the 30-month installment contract. The certificate was countersigned “Abb Johnson by Ed Bardwell, Company Agent.” Bardwell, an employee of Johnson’s, had similarly signed certificates previously as .appellant’s agent. The appellee bank purchased, with recourse, the contract and note. The certificate of insurance was also delivered to appellee as creditor and principal beneficiary. Mr. Palmer died on May 28, 1966, at 62 years of age.

Ark. Stat. Ann. <§ 66-3204(1) (Repl. 1966) provides in part: “Any individual of competent legal capacity may procure or effect an insurance contract upon his own life or body for the benefit of any person.” This is the controlling portion of the statute in the case at bar. We agree with the trial court when it stated: “* * * ipkig insurance policy w,as written in order to pay this indebtedness, I think, in case the man died.” Mr. Palmer, the insured, accepted the insurance, signed the certificate, paid the premium and was the owner of the certificate. As previously indicated, appellee bank is designated as the creditor and principal beneficiary. His estate was the contingent beneficiary. He had a right to designate appellee as his creditor and primary beneficiary. It is obvious that these certificates of insurance were supplied to appellant’s agent with full awareness that a purchaser’s installment contract, additionally secured by a credit life insurance certificate, would subsequently be assigned and utilized in the channels of commerce.

Appellant asserts there was misrepresentation by the insured in the application and issuance of the certificate to him and that “the agent joined in wrongful collusion” in securing this certificate. In support of this contention the appellant offered evidence that Mr. Palmer signed the statement that he had “read the limitations and redactions on the reverse side of this certificate;” that Mr. Palmer and Mr. Johnson, the agent, both knew when this certificate was issued that Palmer had another one of appellant’s certificates outstanding which was issued to him by Johnson about a year previously on a 36-month installment contract. It is undisputed that this first certificate was issued to Palmer in the amount of $2,520.70 in connection with the sale of another vehicle by Johnson to Palmer. The total credit life insurance issuable by appellant for anyone in Palmer’s age group, according to both certificates, was limited to $2,000. Thus, it is argued this second certificate was in excess of the insurable limits since the first one was unpaid or outstanding. This first certificate, which exceeded the insurable limit, was, however, reinsured, accepted and paid by the appellant to another bank. Johnson testified that he didn’t know whether this first certificate of insurance was still in effect at the time of the issuance of the secqnd certificate. We agree with the appellee that “if appellant had previously accepted a certificate on the life of J. R. Palmer which on its face was in excess of the applicable limits, how can it now argue collusion and conspiracy because of the issuance of another certificate to J. R. Palmer in excess of the policy limits'?” There was no concealment or misrepresentation by the insured or the agent contained in the certificate of insurance.

Appellant next argues that its agent cannot validly bind the appellant on the certificate of insurance which insures the interest or property of its agent. Appellant cites as a rule of law that an insurer’s agent cannot issue a binding policy that covers his own property without the knowledge, consent or acquiescence of the insurer. We find no merit in this contention. This certificate of insurance insured the life of Mr. Palmer and not the property of appellant’s agent.

The appellant .also asserts that the findings of the trial court are not supported by substantial evidence. We cannot agree. In addition to the evidence we have discussed, there was also evidence presented and the court found that the appellee bank had no knowledge about “these secret agreements of instructions to Mr. Johnson. They had this type of insurance for sale and this bank wanted it and who could they go to other than their [appellant’s] designated agent to buy it.” It is true that when Mr. Palmer died the appellant had not yet received the application and payment of the premium and upon receipt the application and premium w.ere declined. However, there was evidence that the customary business practice between the appellant and its agent was to permit its agent to send in once a month, between the first and tenth, all applications with the total premiums collected. The handling of this certificate conformed to that established procedure. Mr. Johnson had told Mr. Palmer that he was insured. In the past the appellant had accepted Mr. Palmer’s certificate with a face amount in excess of the limitation, the excess being reinsured by appellant. The court could very well find from the evidence that appellant was not enforcing the limitation contained in the certificate as to the insurable limits. A condition inserted in a policy for the benefit of the insurer can be waived by it. Mid-South Ins. Co. v. Dellinger, 239 Ark. 169, 388 S. W. 2d 6 (1965). We cannot agree with the appellant that the findings of the court are not supported by substantial evidence. The familiar rule is that where there is any substantial evidence to support the findings of the trial court, sitting as a jury, we must affirm.

The judgment is affirmed with an additional allowance of $300 for attorney’s fee for this appeal.

Affirmed.

Fogleman, J., concurs.


author: PER CURIAM.

text:
    IN THE MATTER OF THE UNIFICATION OF THE BAR OF ARKANSAS
    5-5116
    448 S. W. 2d 948
    Opinion delivered January 12, 1970

      Bruce Bullion, Nathan Gordon, Richard Mays, W. S. Mitchell, J. L. Shaver, Sr. and Henry Woods, for petitioners.
   PER CURIAM.

'This is the second attempt by the Arkansas Bar Association to obtain an order of this court integrating or unifying the bar of Arkansas. In the earlier instance petitions for integration, signed by a substantial majority of the actively practicing lawyers in the State, were filed. After the announcement of our preliminary order granting the petition the Bar Association reversed its position in the matter and adopted a resolution opposing integration. A poll then taken by the court resulted in a vote of 489 for integration and 1,003 against ,it. We therefore rescinded our order and denied the petitions. In the Matter of the Integration of the Bar, 222 Ark. 35, 259 S. W. 2d 144 (1953).

In substance the earlier procedure was followed in the present instance. The executive committee of the Bar Association first filed a petition asking for an order approving the unification of the bar. A proposed constitution and by-laws were also submitted. Those documents, together with briefs for and against the proposal, were mailed by the Bar Association to all licensed members of our bar.

Thereafter we again took a poll of the lawyers. Of about 2,600 licensed attorneys there were 1,714 valid votes, as follows:

Attorney’s Category For Against Total
Active Resident Lawyer 610 597 1,207
Active Nonresident Lawyer 9 6 15
Inactive Resident Lawyer 95 183 278
Inactive Nonresident Lawyer 111 103 214
825 889 1,714

It will be seen that slightly less than a majority of the votes were cast in favor of unification and that those favoring the proposal constituted only about 32% of the 2,600 licensed lawyers. Regardless of the merits of the proposal, about which we need express no opinion, we are unanimously of the view that the organization would have little chance of success with such a small part of the bar sufficiently interested in it to cast a favorable vote. The petition is therefore denied.