author: George Rose Smith, Justice. John A. Fogleman, Justice.

text:
    United-Bilt Homes, Inc. v. Donald L. Teague et ux
    5-4318
    432 S.W. 2d 1
    Opinion Delivered September 16, 1968
    [Rehearing denied October 28, 1968.]

      James R. Hale, John L. Wilson and S. Hubert Mayes, Jr. for appellant.

      Walter R. Niblock and William R. Hass for appellees.
   George Rose Smith, Justice.

This is a usury case. On November 9, 1962, United-Bilt Homes, Inc., agreed to build and to finance a house for the plaintiffs, Teague and his wife. The basic cash price, after a $10 down payment, was $2,450, but that figure was not set forth m the building contract or in the note or in the mortgage, all executed on November 9. Instead, all three instruments simply recited the Teagues’ obligation to make 90 monthly payments of $43.07 each, or a total of $3,876.30.

On October 5, 1965, the Teagues, after having made several payments at irregular intervals, brought this suit to cancel the debt for usury. United-Bilt denied usury and sought foreclosure of its mortgage. This appeal is from a decree canceling the note and mortgage, for usury.

The Teagues’ indebtedness was initially $2,450. They signed documents ostensibly requiring them to pay more than 10% per annum on that debt. In the loan papers United-Bilt made no effort whatever to explain its finance charges. That omission brings the case within the rule that we adopted more than ten years ago in taking our stand on the matter of truth in lending. We then pointed out that when the lender writes the contract he has the opportunity to put down in black and white an intelligible description, and the exact amount, of every charge that is being added to the principal of the debt. When, as here, the lender gives the borrower no information at all about the deferred charges, the trier of the facts is justified in assuming, until he is convinced by proof to the contrary, that the difference between the principal of the loan and the face amount of the contract represents interest on the debt. Jones v. Jones, 227 Ark. 836, 301 S.W. 2d 737 (1957). We have consistently adhered to the rule laid down in the Jones case, which is an important but completely fair weapon in the legal arsenal available to the courts in the con- ‘ inning fight against usury.

In the case at bar the charges were excessive oil their face. United-Bilt fixed the monthly payments at $43.07. That figure exceeds the maximum legal charge of $38.80 — the amount needed monthly to retire a debt of $2,450 in 90 months at 10% interest. See Lake’s Monthly Installment and Interest Tables (5th Ed., 1959), p. 149. Under the Jones case United-Bilt had the burden of explaining the excessive charges.

At the trial United-Bilt supplied an exact explanation of its monthly charge of $43.07. Dennis Wilson, its chief accountant, testified that United-Bilt’s experience had shown that its closing costs always exceeded 11% of the principal debt. Hence the table which it furnishes to its salesmen was prepared by adding 11% to the principal and then charging 10% interest upon that total.

Lake’s tables confirm Wilson’s testimony. Here the principal was $2,450. Eleven percent of that amount is $269.50, making a total of $2,719.50. According to Lake, p. 149, a loan of $2,719.50, payable in 90 monthly installments at 10 % interest calls for monthly payments of $43.07. That, to the very penny, was the amount specified in this case.

Thus United-Bilt’s task is that of proving legitimate closing costs — costs that may be passed on to the borrowers at 10% interest for the life of the loan — of at least $269.50. United-Bilt now contends that it was entitled to charge the following closing costs to the Teagues, even though they were not told about any of the amounts involved:

Title insurance $ 40.00
Eire and extended coverage (FEC) 144.25 Appraisal 52.50
Credit life insurance premiums 117.27
$354.02

The chancellor correctly allowed the first two items, totaling $184.25, upon proof that TJnited-Bilt had spent that amount for title and FEC insurance. The case turns upon the other two items.

TJnited-Bilt attempts to sustain the appraisal charge by insisting that it was for the Teagues ’ benefit. That just is not true. The inspection and appraisal were not made until April 2, 1963, long after the consummation of the loan and the completion of the house. The Teagues were not even told about the appraisal, which did not benefit them in any way whatever. The appraisal, fee was for United-Bilt’s sole benefit and cannot be passed on to the Teagues. Winston v. Personal Finance Co., 220 Ark. 580, 249 S.W. 2d 315 (1952).

There remains the premium for credit life insurance. In an earlier United-Bilt ease we disallowed that premium because it was not actually paid in advance. United-Bilt Homes v. Knapp, 239 Ark. 940, 396 S.W. 2d 40 (1965). TJnited-Bilt now seeks to distinguish that ease by insisting that here its proof shows that the credit life premium would have been paid eventually, so that it was entitled to take the premium into account as part of the closing costs.

There are two unanswerable objections to that argument. First, even though United-Bilt intended in good faith to pay the credit life premium, its own undisputed proof shows that the premium was not an interest-bear-i/ng charge susceptible of being included in the closing costs. Wilson, United-Bilt’s own accountant, testified that the premium was not paid to the credit life insurance company in advance. Instead, had the Teagues paid their monthly installments as they came due, the monthly credit life premium would have been taken out of each payment, so that United-Bilt would never have been in the position of having advanced any of the premium as a loan to the Teagues. Hence, just as in the Knapp case, United-Bilt is not entitled in the case at hand to charge interest upon a sum of money that was not meant to be lent to the Teagues. Of course the issue of usury is to be determined as of the date of the contract and not by subsequent events. General Contract Corp. v. Duke, 223 Ark. 938, 270 S.W. 2d 918 (1954).

Secondly, United-Bilt was not contractually bound to carry one penny’s worth of credit life insurance. The. only reference to such insurance was contained in the printed building contract, prepared by United-Bilt and to be construed in the borrowers’ favor: “Owner agrees to pay all attorney’s fees, installment loan expenses (including cost of credit life insurance), title and property insurance, and recording costs, incurred and to be incurred in connection with creating and fixing the first lien and mortgage . . . and in financing the time sale hereby contemplated.”

It will be seen that the Teagues agreed to repay the cost of credit life insurance, but there was no requirement whatever that United-Bilt carry such insurance. The matter was discussed during the negotiations for the loan, but the written contract expressly provided that it contained all items and conditions agreed upon by the parties. Hence the Teagues had no legally enforcable right to compel United-Bilt to carry credit life insurance. United-Bilt might therefore have dropped the coverage at any time — a fact which obviously precludes it from now contending that the contemplated premium was an interest-bearing charge subject to inclusion in the closing costs. (As a matter of fact, the coverage that was actually obtained would not have benefited the Teagues if Donald Teague had died at any time within fifteen months before the date of trial. That is so because the policy provided that the insurance would not be payable if the monthly payments to United-Bilt were in arrears by more than 90 days at the death of the insured. The Teagues’ payments were more than 90 days in arrears for fifteen months before the trial; so they had no protection.)

During our discussion of the case the suggestion was made that credit life premiums should be treated in the same way as nnaccrued interest; that is, in a suit to collect an accelerated debt nnaccrued and unpaid credit life premiums should not be considered in the determination of the issue of usury. The analogy is fallacious. Unaccrued legal interest can be disregardeed, as in Mid-State Homes v. Knight, 237 Ark. 802, 376 S.W. 2d 556 (1964), because the contract would not have been usurious if the debtors had made all payments as they came due. But when the interest rate was originally usurious, the lender cannot validate the contract by bringing suit for legal interest only. Brooks v. Burgess, 228 Ark. 150, 306 S.W. 2d 104 (1957).

Similarly, if United-Bilt had been contractually bound to make the credit life premium payments every month, the future unpaid monthly premiums would not have made usurious an agreement that was originally legal. But here the matter of paying the monthly premiums lay entirely within United-Bilt’s uncontrolled discretion. It might have dropped such insurance at any time and still have continued to collect the premiums as a part of the Teagues’ monthly payments. Such a contingency, lying wholly within the lender’s power, opens the door to usury. Sosebee v. Boswell, 242 Ark. 396, 414 S.W. 2d 380 (1967). There would evidently be no ceiling upon the permissible interest rate if lenders were allowed to include in their finance charges items that they were free to pay or not to pay as they later saw fit.

We have not overlooked the fact that the Teagues’ first monthly payment was not due until January 6, 1963, giving them the benefit of a 58-day interval instead of the usual 30-day interval in the computation of interest. Even so, that windfall of $20.50 in interest (Lake, supra) is far short of offsetting the excessive interest charges.

Affirmed.

Brown, J., not participating.

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

John A. Fogleman, Justice.

I respectfully dissent. I do not disagree with the principles stated in the court’s opinion, as much as I disagree with the application made of them. I particularly agree that the courts should be zealous in protecting borrowers and installment credit purchasers against any fraud, trick, scheme, device or shield cloaking a usurious charge for loan or forbearance of money. I do not think that the penalty provided by our constitution is too severe when lenders exact usurious charges, either by blatant disregard of our usury laws or by any scheme or evasion. The zeal of the courts in affording protection has not abrogated fundamental rules to be applied in usury cases. Some of these are:

1. Usury is a corrupt agreement for more than the legal rate of interest on a loan of money or forbearance of a debt. It is the excess over the legal rate charged for the use of money. Universal C.I.T. Credit Corp. v. Hudgens, 234 Ark. 1127, 356 S.W. 2d 658.

2. The test, when usury is alleged, is whether the borrower promised to pay a greater rate of interest than the law permits and the lender knowingly entered into a usurious contract intending to profit by the methods employed. Commercial Credit Plan, Inc. v. Chandler, 218 Ark. 966, 239 S.W. 2d 1009; General Contract Corp. v. Duke, 223 Ark. 938, 270 S.W. 2d 918; Blalock v. Blalock, 226 Ark. 75, 288 S.W. 2d 327.

3. The burden is upon one asserting usury to show that the transaction is usurious. Wallace v. Hamilton, 238 Ark. 406, 382 S.W. 2d 363; Cox v. Darragh Co., 227 Ark. 399, 299 S.W. 2d 193.

4. Even though the courts are justified in considering the entire difference between the amount to be paid by a purchaser in a credit transaction and the contract sale price as interest, where the difference is undesignated or unitemized, yet, usury will not be presumed, imputed or inferred when the opposite conclusion can reasonably and fairly be reached. Universal C.I.T. Credit Corp. v. Hudgens, 234 Ark. 1127, 356 S.W. 2d 658; Brown v. Fretz, 189 Ark. 411, 72 S.W. 2d 765; Brittian v. McKim, 204 Ark. 647, 164 S.W. 2d 435.

5. In determining whether a contract is usurious it must be viewed as of the time it was entered into and it must be presumed that it will be performed according to its terms. See General Contract Corp. v. Duke, supra; Sloan v. Sears, Roebuck & Co., 228 Ark. 464, 308 S.W. 2d 802; Harris v. Guaranty Financial Corp., 244 Ark. 218, 424 S.W. 2d 355; Foster v. Universal C.l.T. Corp., 231 Ark. 230, 330 S.W. 2d 288; Sager v. American Investment Co., 170 Ark. 568, 280 S.W. 654; Eldred v. Hart, 87 Ark. 534, 113 S.W. 213; 55 Am. Jur. 331, Usury, §12.

6. The actual test of a transaction alleged to be usurious is whether the total amount the borrower will be required to pay is greater than the total amount he could be required to pay to retire the principal indebtedness with interest at 10% per annum for the term thereof. McDoibgal v. Hachmeister. 184 Ark. 28, 41 S.W. 2d 1088.

7. All reasonable expenses incident to a loan which the borrower agrees to pay or which are paid out by the lender for his benefit are properly a part of the loan proceeds or the amount loaned. Harris v. Guaranty Financial Corp., 244 Ark. 218, 424 S.W. 2d 355; Lyttle v. Mathews Investment Co., 193 Ark. 849, 103 S.W. 2d 47; Brown v. Fretz, 189 Ark. 411, 72 S.W. 2d 765; Sidway v. Harris, 66 Ark. 387, 50 S.W. 1002; Shattuck v. Byford, 62 Ark. 431, 35 S.W. 1107.

8. Insurance premiums paid a third party are proper charges when the borrower agrees to pay them or receives the policy, is not charged an excessive premium, and receives the benefit of the insurance. Winston v. Personal Finance Company of Pine Bluff, 220 Ark. 580, 249 S.W. 2d 315; Smith v. Eason, 223 Ark. 747, 268 S.W. 2d 389; Griffin v. Murdock Acceptance Corp., 227 Ark. 1018, 303 S.W. 2d 242; Universal C.I.T. Credit Corp. v. Lachey, 228 Ark. 101, 305 S.W. 2d 858; Whiddon v. Universal C.I.T. Credit Corp., 227 Ark. 824, 301 S.W. 2d 567.

9. Credit life insurance premiums fall into the same category as other insurance premiums. Lowrey v. General Contract Corp., 228 Ark. 685, 309 S.W. 2d 736; Universal C.I.T. Credit Corp. v. Lachey, supra.

10. The withholding of sums to meet obligations for insurance premiums with the acquiescence of the borrower does not render the transaction usurious, unless the insurance is a subterfuge. Hartzo v. Wilson, 205 Ark. 965, 171 S.W. 2d 956.

11. A borrower’s default does not have the effect of rendering a transaction usurious, because it is within his power to avoid the consequences. Carney v. Matthewson, 86 Ark. 25, 109 S.W. 1024; Mid-State Homes v. Knight, 237 Ark. 802, 376 SW. 2d 556.

12. In calculating the amount the borrower could be required to pay, the statutory system of applying payments first to interest and the excess, if any, to principal is followed. Ark. Stat. Ann. §68-606 (Repl. 1957); Lyttle v. Mathews Investment Co., 193 Ark. 849, 103 S.W. 2d 47; Hare v. General Contract Purchase Corp., 220 Ark. 601, 605, 249 S.W. 2d 973; Widmer v. J. I. Case Credit Corp., 243 Ark. 149, 419 S.W. 2d 617; Commercial Credit Plan, Inc. v. Chandler, 218 Ark. 966, 239 S.W. 2d 1009.

I agree with the majority that the title insurance and the fire and extended coverage premiums are properly a part of the principal indebtedness. I also agree that the appraisal fee of $52.50 was not a proper part of the principal debt, but not for the reason indicated in the majority opinion. The contention was made by appellant that this appraisal was necessary to fix the amount of title insurance coverage. Yet this appraisal was made four months after the issuance of the title insurance policy and two months after the premium was paid. Under the caveat in Winston v. Personal Finance Co. of Pine Bluff, 220 Ark. 580, 249 S.W. 2d 315, this item must be rejected as a part of the principal debt. If the appraisal had been necessary for the purposes of title insurance, the fee paid for it would have been proper, in my opinion. So I agree that the decision depends upon the treatment of the credit life insurance premiums.

In the building contract entered into between the parties, appellees agreed to pay all attorney’s fees, installment loan expenses (including credit life insurance), title and property insurance and recording costs incurred in connection with creating and fixing a first lien and mortgage and in financing the time sale in the amount of $295.00. While appellant’s chief accountant calculated that total credit life insurance premiums to be paid by appellant would amount to $117.27, if all payments were made promptly by appellees, when we deduct the amount of other insurance premiums from the stipulated amount for such expenses, i.e., $295, this left only $110.75 which could be applied to credit life insurance.

Evidence that credit life insurance on the life of Donald Teague was carried by Life Underwriters Insurance Company is undisputed. Neither appellant nor its officers, directors or employees had any connection with this company. The insurance was evidenced by a certificate furnished to appellees dated November 9, 1963 providing coverage for not more than sixty (60) months. There can be no doubt that this insurance was contemplated by the parties. Not only was it mentioned in the contract, but Donald Teague testified that this insurance was discussed at the time the contract was executed. He received the certificate and was satisfied. The insurance was based on an arrangement by which it covered all insured debtors of appellant at a premium rate of 75c per $1,000.00 of the total unpaid balance per month, with the premium prorated among the various debtors. Appellees had the benefit of the protection afforded by the insurance while it was in force. It is not shown that appellant has any interest in the insurance company or that it receives any rebate, deduction, commission or other form of compensation from the insurer.

I submit that any idea that the premiums were not paid in advance by appellant is clearly erroneous. The first premium payment including appellees’ balance of $3,876.30 was made by appellant in December 1962. The first payment on the indebtedness was scheduled for January 1963. Thus, the monthly premium would be advanced by appellant throughout the term of the insurance. It was only in appellant’s chief accountant’s attempt to test the contract for usury and in determining unpaid balances that the amount of the monthly premium prorations were deducted from the installment payments scheduled or made. There is no reason why, in testing the contract for usury, these credit life insurance premiums should not be added as items of the principal indebtedness as they were paid, and interest at the highest legal rate calculated on them, at least from the date of advance. When this is done, the contract is not usurious.

There is nothing in this record to indicate that ap pellees were charged any excessive premium, that the insurance was a subterfuge, that appellees did not acquiesce in the payment of the credit life premiums by the method followed, that the appellant profited in any way from the payment or the method of payment, or that the contract was fraudulent or contained any trick, scheme, device, shield or cloak for the exaction of excessive interest from appellees, or the avoidance of the stiff penalties of our usury laws.

I do not agree with the statement that appellant was under no obligation to pay credit life premiums. It was just as much obligated to pay credit life premiums as it was to pay title insurance and fire and extended coverage premiums, which the majority hold to properly constitute a part of the principal debt. Its failure to pay them would only have amounted to a partial failure of consideration but would not render the contract usurious. Appellant could only recover the sums actually advanced with interest from the date of advance. Lanier v. Union Mortgage Banking & Trust Co., 64 Ark. 39, 40 S.W. 466; Widmer v. J. I. Case Credit Corp., 243 Ark. 149, 419 S.W. 2d 617. See, also, Mid-State Homes v. Knight, 237 Ark. 802, 376 S.W. 2d 556. The fact that, the insurance would not be payable if the monthly payments were in arrears for more than 90 days at the death of the insured does not alter the situation at all. This eventuality was a matter within the control of appellees, not the appellant. As hereinabove pointed out, the consequences of a borrower’s default cannot make a transaction usurious.

I would reverse the decree of the trial court and remand the cause for further proceedings.

I am authorized to state that Harris, C. J., joins in this dissent.

       his is certainly as favorable to the borrower as he could ask. It is possible that the proper test might require the allowance of interest on some of these items from the date of the contract. This procedure has been held to be proper when the delay is not occasioned by fault or bad faith on the part of the lender. McDougal v. Hachmeister, 184 Ark. 28, 41 S.W. 2d 1088, 76 ALR 1463.

      While the 58-day interval between the date of the note and the date of the first payment may not be determinative of the question whether the contract is usurious, I do not agree that this makes a difference of only $20.50 in testing the contract for usury. Assuming that this is the correct amount of interest for the 28 days in excess of the normal one-month interval, that much more of the first payment would be applied to interest rather than to principal. Thus, after the first 58 days the principal balance on which interest would be calculated for each month would be increased by $20.50. For the full term of the loan at 10% interest, the difference would be $35.70.


source: Caselaw Access Project

author: George Rose Smith, Justice.

license: Public Domain

text:
    Robert L. Lisenby v. Farm Bureau Mutual Insurance Company of Arkansas, Inc.
    5-4617
    431 S.W. 2d 484
    Opinion Delivered September 16, 1968

      Reinberger, Eilbott, Smith & Staten for appellants.

      Cockrill, Laser, McGehee, Sharp & Boswell for appellee.
   George Rose Smith, Justice.

The question here is whether homeowners whose house is destroyed by fire can maintain successive suits upon their fire insurance policy, first to recover for the loss of the house and then to recover for the loss of its contents. This appeal is from the trial court’s holding that the successful maintenance of the first suit was bar to the second suit. We hold that the court’s conclusion was correct.

The Lisenbys obtained from the appellee a homeowner’s policy which insured their dwelling for $10,000 and its contents for 40% of that amount. House and contents were totally destroyed by fire. The Lisenbeys at first filed suit to recover $10,000 for the loss of the house and $4,000 for the loss of their personal property. The insurer interposed several defenses. Before trial the plaintiffs took a nonsuit with respect to the personal property — perhaps to safeguard their claim to the statutory penalty and attorney’s fee, since the valued policy law applies only to real estate. Ark. Stat. Ann. § 66-3901 (B-epl. 1966). The jury’s verdict awarded the plaintiffs the full $10,000. They then brought the present action for the loss of the personal property, which the complaint valued at $3,300. The trial court, as we have said, entered judgment for the defendant.

In seeking a reversal the appellants cite primarily decisions of this court holding insurance policies to be severable contracts. In Globe & Rutgers Fire Ins. Co. v. Chisenhall, 162 Ark. 231, 258 S.W. 135 (1924), the policy insured a dwelling house for $2,000 and a barn for a like amount. After the house burned the insurer paid that loss and purportedly canceled the policy. The barn then was destroyed by a second fire. We held that the policy was in effect two contracts; so that the cancellation of the first, with respect to the house, did not affect the second, covering the barn. That case was followed upon analogous facts in National Union Fire Ins. Co. v. Henry, 181 Ark. 637, 27 S.W. 2d 786 (1930).

We do not consider those cases to be pertinent here, because they did not involve the matter of splitting a cause of action. That was the issue in State Life Ins. Co. v. Goodrum, 189 Ark. 509, 74 S.W. 2d 230 (1934), also cited by the appellants, where the insurer on different dates had issued two different policies upon the life of the insured. We held that the beneficiary had a separate and distinct cause of action upon each policy and therefore could maintain successive suits following the death of the insured.

This case is almost the exact opposite of that one and consequently is not governed by that ruling. Here only one policy was issued. Only one premium was paid. Under the printed contract the personal property coverage was expressed not in dollars and cents but as a fraction (40%) of the real property coverage. There was only one fire. Apart from the effect of valued policy law, the issues with respect to the real property loss were exactly the same as those with respect to the personal property loss. It is hard to conceive of a situation in which the first lawsuit would be so nearly identical with the second one.

Needless to say, the rule against the splitting of a single cause of action is intended to keep defendants from being harassed by a multiplicity of suits and to lighten the already overcrowded dockets of the trial courts. In finding the existence of a single cause of action we have placed some emphasis upon the fact that the several claims arise from a single transaction. Evermann v. Beck, 221 Ark. 138, 252 S.W. 2d 388 (1952). In the case at bar we are firmly of the view that the fire created only one cause of action and that the plaintiffs ought not to be permitted to subdivide that cause of action, thereby burdening the defendant and the courts with the waste of time and expense that attends a needless jury trial.

Affirmed.

Harris, C. J., not participating, and Fogleman, J. disqualified.


author: Paul Ward, Justice.

text:
    Peoples Loan and Investment Company v. B. B. Booth, Lydia Booth, et al
    4526
    431 S.W. 2d 472
    Opinion Delivered September 16, 1968

      Ball & Gallman and Franklin Wilder for appellant.

      Walter R. Niblock and Richard Hipp for appellees (Booths).

      Glen Wing and Charles W. Atkinson for appellees (Haggards).
   Paul Ward, Justice.

This appeal raises the issue of usury in two separate notes. To aid in an understanding as to how the issues arose we set out below a brief statement of the facts.

On August 21, 1963 the Peoples Loan and Investment Company (appellant here) loaned B. B. Booth and his wife (two of the appellees here) the sum of $5,500 (to pay certain debts) and also the sum of $40,000 for the construction of chicken houses on land belonging to them. These two advancements are represented in one note (hereafter referred to as Note #1) a copy of which is found at page 337 of the record — marked "Plaintiff’s Ex. #1”. The two notes are referred to hereafter as Note #1 and Note #2.

Note #1. The face of the note shows a principal sum of $80,421.55, “payable in thirty-nine quarterly installments of $2,010.53 each, and one final installment of $2,010.88 ...” The note was secured by a mortgage on real estate — a copy shown at page 339 of the record and marked Plaintiff’s Ex. #2. The principal sum of the note, as shown by appellant's records, consisted of the following items:

(1) Net cash to borrower $40,000.
(2) Other payoffs 5,500.
(3) Hazard Insurance (1st year) 402.
(4) Credit Life Insurance 4,058.
(5) Total charges paid by Peoples 185.
Total Principal $50,145.
(,6) Interest @ 5.41%, ten years 27,128.
(7) Hazard Insurance after first
year — nine years 3,135.
(8) Legal Preparation and
Credit Report 12.50
Total Face of Note $80,421.55

Note #2. This note was executed by Booth and his wife to appellant on October 9, 1963 (a copy shown at p. 15 of the record) in the principal amount of $6,611.40, “payable in 47 monthly installments of $137.73 each and one final installment of $138.09; the first installment to become due and payable on or before the 9th day of October, 1963 ...” (emphasis ours.) it will, of course, be noted that the first installment of $137.73 was due on the day the note was executed. This note was secured by a chattel mortgage on cattle owned by Booths.

On August 25, 1964 the Booths conveyed their interest in the real estate and the cattle to Carl Gregory Haggard and his wife — also appellees here.

On March 21, 1966 appellants filed suit against all the appellees to recover the balances due on the two notes and to foreclose said mortgages.

After an extended hearing (set forth in over 400 pages and numerous exhibits in the record) the trial court made comprehensive findings which, in pertinent part, are summarized below.

(a) The Haggards agreed with Booths to assume both debts.
(b) Appellees contend both notes are usurious.
(c) Interest must be calculated on the reducing principal basis.
(d) Note #1 is usurious because Booths did not authorize Hazard Insurance — shown as items (3) and (7) above mentioned.
(e) Note #2 is usurious because it requires the first payment to be made on the date of execution, and the proof does not show this was merely an honest mistake on the part of appellant.

From the above findings appellant, on appeal, contends the trial court erred in holding each of the notes usurious. For reasons hereafter discussed, we are compelled to agree with appellant in both instances.

Note #1. Due to the commendable frankness by both parties on oral argument the decisive issues here are limited largely to certain questions of fact.

Since the note does not show usury on its face, the burden was on appellees to show it was, in fact, usurious. See: Baxter v. Jackson, 193 Ark. 996, 104 S.W. 2d 202; Commercial Credit Plan v. Chandler, 218 Ark. 966, 239 S.W. 2d 1009. Also, usury -will not be presumed when the opposite conclusion can reasonably be reached. Cammack v. Runyan Creamery, 175 Ark. 601, 299 SW. 1023; Hill v. Jacobs, 187 Ark. 1162, 60 S.W. 2d 564, and; Brittain, Adm. v. McKim, 204 Ark. 647, 164 SW. 2d 435. In the McKim case we also pointed out that, to constitute usury, “. . . there must have been an intention on the part of the lender to take or receive more than the legal rate of interest”.

In our opinion the appellees did not meet the burden of proving usury. It is not questioned by appellees that fire and windstorm insurance was a benefit to them or that it was not a proper requirement by appellant. The thrust of appellees’ contention is that they did not know appellant required such insurance. However, this contention is completely nullified by the fact that Mr. Booth and his wife signed the mortgage (securing the note) which specifically required the insurance. This is the language used:

‘ ‘. . . said mortgagors hereby agree with the mortgages that they will keep the buildings on said land in good repair and constantly insured in some company satisfactory to said mortgagee for the sum of $40,000 . .

The mortgage also provided that if the mortgagees did not provide the required insurance, then appellant “is hereby authorized to do so . . .”

Note #2. Here, it is conceded that the note, on its face, is usurious. It is again pointed out that the first payment of $137.73 is shown (on the face of the note) to be due on the day it was executed. The evidence shows that such payment (along with the other required payment) constitutes usury. Therefore appellant tried to avoid the result of usury by showing the “date of payment” was entered as the result of an honest mistake and without any corrupt intent to exact interest in excess of the legal rate. This, appellant had a right to do. See: Cox v. Darragh, 227 Ark. 399, 299 S.W. 2d 193; Brooks v. Burgess, 228 Ark. 150, 306 S.W. 2d 104.

It is apparent from the record that the trial court, in holding the note usurious, felt it was limited to considering the face of the note. In its opinion the trial court said:

“. . . plaintiff must stand or fall on note #2 as it is written, irrespective of plaintiff’s mistake, inadvertent or otherwise, in drawing the instrument..”

The record shows that appellant offered to introduce oral testimony and also certain office records to show the first payment due date was inserted by mistake. This should have been considered by the court. In Sammons-Pennington Co. v. Harry H. Norton, et al, 241 Ark. 341, 408 S.W. 2d 487, this Court said:

“It appears, that, in determining whether a usurious charge has been made, all attendant circumstances must be taken into consideration. When this is done, we think it is plain that the overcharge in the instant litigation was the result of error, made in good faith, rather than being based on an intent to violate the usury law ...”

See also Guaranty Financial Corp. v. James Harden, et ux, 242 Ark. 779, 416 S.W. 2d 287, where we said:

“We think the chancellor fell into error in construing the promissory note all by itself, without regard to the building contract which was executed at the same time, as a part of the same transaction and which gave rise to the debt evidenced by the note. ’ ’

It is therefore our conclusion that the decree of the trial court should be, and it is hereby, reversed, and the cause is remanded for further proceedings consistent with this opinion.

Reversed and remanded.


text:
    Ivan C. Wright v. Jarold Hulett
    4638
    431 S.W. 2d 486
    Opinion Delivered September 16, 1968

      Rhine & Rhine and C. B. Erwin for appellant.

      Kirsch, Cathey & Brown for appellee.
   Paul Ward, Justice.

This litigation is between Ivan C. Wright (appellant), a landlord, and Jarold Hulett (appellee), a lessee. The background facts, set out below, are not contested.

On November 15, 1966 appellant filed a complaint in chancery court alleging he had leased certain lands to appellee for the year 1966; that appellee planted 250 acres in beans and 20 acres in milo maize; that appellee agreed to pay, as rent, ^th of all crops — free from harvesting costs — and also agreed to harvest said crops at maturity. It was further alleged that appellee failed to harvest said crops at maturity, and that he owed $500 for money advanced for planting and cultivation. Appellant’s prayer was that he be allowed to enter and harvest the crops; that he be given judgment for cost of harvesting and also for the $500 advanced.

On motion by appellee the cause was transferred to the circuit court — without objections — and, on January 18, 1967 appellant filed therein an “amended and substituted complaint”, making substantially the same allegations as previously made and asking judgment for the $500 and $908 for damages to the crops. The above allegations were denied by appellee in his answer.

A jury trial was had and, on December 18, 1967, a verdict (and judgment) was entered in favor of appellee, and this appeal follows.

Seeking a reversal, appellant relies on only one point: The court erred in refusing to allow appellant to introduce in evidence his complaint filed in the chancery court.

It is our conclusion that the trial court did not commit reversible error. In the first place, appellant had a right to testify concerning the subject matter in the original complaint, and he did, in fact, so testify. Consequently it is difficult to understand how he has been prejudiced by the court’s ruling.

Moreover, it appears that the trial court would have erred had it allowed the complaint (in the chancery court) to be introduced in evidence. In 29 Am. Jur. 2d, EVIDENCE, § 703, we find this statement:

“In accord with the general rule in respect of self-serving declarations, a self-serving statement or allegation in a pleading, such as a bill in equity, or a petition or complaint, or an answer in an action at law, is inadmissible in behalf of the pleader, in the action in which it is filed, against his opponent or a codefendant, and also inadmissible in behalf of the pleader against such persons and any other person in a subsequent proceeding.”
To the same effect see 1ALR, page 84.

In The Henry Wrape Company v. Barrentine, 129 Ark. 111 (p. 115), 195 S.W. 27, where an effort was made to introduce in evidence the complaint in the original case, we find the following statement:

“We have never gone any further than to permit the use of pleadings between the same parties in other cases for the purpose of contradicting the party signing the pleadings when he takes the stand as a witness, or as admissions by him against interest.”

Likewise, in Hill v. Talbert, 210 Ark. 866 (p. 871) 197 S.W. 2d 942, this Court quoted from 31 C. J. S. page 948 § 216 the following:

“Generally a party cannot make evidence for himself by his own declarations, and it is a well-established general rule that a statement of a party, whether oral or written, which is of a self-serving nature is not admissible in evidence in his favor.”

Finding no reversible error the judgment of the trial court is hereby affirmed.

Affirmed.


author: Lyle Brown, Justice.

text:
    D. L. Swan v. The State of Arkansas
    5361
    431 S.W. 2d 475
    Opinion Delivered September 16, 1968

      Bon McCourtney & Associates by David N. Laser for appellant.

      Joe Purcell, Atty. Gen.; Don Langston, Asst. Atty. Gen. for appellee.
   Lyle Brown, Justice.

Appellant Swan was convicted for violation of our overdraft law. His appeal is concerned with the sufficiency of the evidence, the admissibility of a prior insufficient check, and the propriety of permitting the prosecuting attorney to propound certain questions to the defendant on cross-examination.

Rogers Produce is headquartered at Piggott and wholesales poultry and eggs to a substantial number of merchants in a trade area in several adjoining counties. D. L. Swan, appellant here, was a merchant in Pocahontas, to whom Rogers made deliveries twice weekly. So far as the record discloses, Rogers sold Swan on a cash basis. The deliveryman would take an order the first part of the week, deliver and collect the latter part of the week, and account to Rogers on returning to Piggott.

Rogers had done business with Swan for more than two years and the collection experience had been uneventful until September 3, 1966. On that date a check for $798.16 in payment for produce was returned marked “insufficient funds.” On September 5 another check was likewise returned. Then on September 12 Rogers Produce delivered $288 worth of merchandise but refused to release it (on Mr. Rogers’ orders) unless prior checks and invoices were paid along with delivery. Swan gave a check for $1,856.40 which would have satisfied all indebtedness except that again the check was dishonored. That check is the subject of this prosecution. Swan knew his account was insufficient; in fact his largest balance during the previous two weeks was $65.46.

Appellant contends that any evidence of fraud was explained away by his presentation of evidence. lie testified that he did not intend to defraud Rogers, that it was his intention to pay off the checks “as soon as possible,” and that he had written several bad checks and had always satisfied them later. His defenses were fact questions and it was for the jury to decide whether his intentions were fraudulent. The evidence was clearly sufficient to take the case to the jury.

Swan challenges the right of the State to introduce the September 5 check for $960.16. That argument was answered in Tolbert v. State, 244 Ark. 1067, 428 S.W. 2d 264 (1968). Tolbert was prosecuted under the same statute as Swan, Ark. Stat. Ann. § 67-722 (Repl. 1966), making it unlawful to give, with intent to defraud, a cheek on an account which is known to be insufficient. In Tolbert the introduction of five other dishonored checks was approved. There are so many reasons why honest men can give an overdraft that the law requires a showing of specific mental attitude of criminality at the time the overdraft is written. The introduction of the September 5 check meets the test laid down in Alford v. State, 223 Ark. 330. 266 S.W. 2d 804 (1954) — the other conduct (giving of other overdrafts) is relevant in the sense that it tends to prove the essentiality of criminal intent which may not be established merely by showing the giving of the single check forming the basis of the charge.

Swan contends the court erred in allowing the prosecuting attorney to ask the defendant on cross-examination if he had ever been convicted of a felony, and in asking the defendant whether or not he got a fair trial in that conviction.

Over the objection of counsel for appellant, this colloquy occurred on the cross-examination of Swan:

“Q. Mr. Swan, have you ever been convicted of a felony?
A. Yes, sir, I have.

(After interruption for objections and exceptions, the questioning continued.)

Q. Have you been convicted of a felony?
A. You can call it convicted. I was railroaded in one.
Q. Do you feel like you didn’t get a fair trial?
A. Well — yes, sir, in a way.
Q. Where were you tried? You weren’t tried in this county?
A. No, sir, another county.
Q. In Lawrence County?
A. Yes, sir.”

Of course it is permissible to inquire on cross-examination whether a defendant has been convicted of a felony. Ordinarily, if his answer is in the affirmative then the inquiry is ended. But in this case the defendant invited inquiry when he volunteered the statement that he was “railroaded in one.” The statements which followed merely showed that he was claiming to have been “railroaded” in Lawrence County, not Randolph County in which he was being tried. Actually, the latter part of the dialogue could have been helpful to defendant. It revealed he was not casting aspersions on the court of Randolph County.

We cannot say the court abused its discretion in permitting the prosecuting attorney to twice ask Swan if he had been convicted of a felony. The recited interruption of the testimony could have justified the repetition as well as one of many other disturbances which are well known to interfere with the hearing of the jury.

The court erred, says Swan, in allowing the prosecuting attorney to ask the defendant leading questions. Appellant cites only one question in his brief. The prosecutor was questioning the driver who delivered the produce on September 12:

“Q. Mr. Huffman, did you make demand before you unloaded the chickens?
A. Yes, sir, I did.”

It is possible that the question could have been better phrased to avoid the prohibition against leading questions on direct examination; but we perceive no prejudice or abuse of discretion. It should be added that had the question been more appropriately worded, the answer would have been the same. That is for the reason that the previous testimony of the deliveryman reveals the same version:

“Q. Would you back up and tell us exactly what you did when you arrived at the store that day?
A. Well, first of all I went back to the meat department and told the butcher there that I would have to have the money before . . .” (answer stopped by objection).

It cannot be disputed that it was the witness’ persistent version that he first made demand for the money before unloading the produce. Later it was shown that he was so instructed by his superior.

Affirmed.


author: Lyle Brown, Justice. John A. Fogleman, Justice.

text:
    David W. Searcy v. The State of Arkansas
    5363
    431 S.W. 2d 477
    Opinion Delivered September 16, 1968

      Eugene Coffelt for appellant.

      Joe Purcell, Atty. Gen.; Don Langston, Asst. Atty. Gen. for appellee.
   Lyle Brown, Justice.

Appellant David W. Searcy appeals from a conviction for grand larceny for allegedly stealing a triangle micrometer and three telescope gauges. For reversal appellant attacks the validity of a search warrant, the admission of stolen articles found in his possession which were in addition to the items described in the charge, and the voluntariness of a purported confession.

Pursuant to a search warrant, the premises of Searcy were searched and no stolen property was recovered. Following the search, Searcy was detained for investigation and taken to the county jail. Searcy advised the officers upon questioning that he had stored the property in his parents’ garage at an address other than his own. Searcy called his mother, directed her to unlock the garage, and proceeded with the officers to the parents’ home. In the garage the officers discovered the micrometer, gauges, and several other recently stolen items of personal property which Searcy admitted stealing. All items were placed in a box and taken to headquarters. The trial court permitted the introduction into evidence of the “other items” in the box. A written confession given on the night of detention was also admitted in evidence. The points relied upon for reversal will be italicized and discussed.

I. The court erred in failing to suppress the search warrant and the evidence acquired from the service of the search warrant.

The weakness in Point I rests with the fact that the search warrant is not involved in the case. No property was seized as a result of the search at the premises of appellant. The only property seized and introduced was the property which the officers found in the garage of appellant’s parents. A search warrant was obtained for the search of the parents’ premises.

II. The court erred in failing to suppress the confession of the defendant.

Officer Saxton testified that he gave Searcy the Miranda warnings when he first entered the suspect’s house with a search warrant. Shortly thereafter at headquarters, where the investigation continued, a radio operator typed out the warnings; they were read to the suspect and in turn he read them; thereupon he affixed his signature. All that procedure was prior to any questioning. Searcy admitted being given a part, but not all, of the Miranda warnings at his home. He also admitted signing the waiver prepared by the radio operator but denies knowing the contents. The trial court, after a full Denno hearing, ruled the signed confession admissible. We have evaluated the court’s findings and made an independent determination of the issue of voluntariness in accordance with the procedure explained in Harris v. State, 244 Ark. 314, 425 S.W. 2d 293 (1968). We do not disturb the trial court’s finding.

III. The coiwt erred in permitting the introduction of other goods allegedly stolen which were not incorporated in the charge.

When the garage was searched the officers found a hand drill and other tools which apparently had been taken from the prosecuting witness’ premises at Bentonville at the same time the micrometer and gauges were stolen. There was also a box of rifle .shells which was missing from the bus station in Rogers.- ■ The court permitted introduction of these “other items” with a cautionary instruction. The jury was told that the defendant was not being tried for theft of these “other items”; and that “they are not to be considered for any other purpose except as a circumstance to be considered in this case along with all the other evidence.” There was no objection to the particular form of the cautionary instruction.

As to the hand drill and other tools taken from the prosecuting witness simultaneously with the micrometer and telescopic gauges, we hold they were properly admissible. See Wilson v. State, 165 Ark. 148, 263 S.W. 390 (1924). In Lynch v. State, 95 Ark. 168, 128 S.W. 1053 (1910), defendant was charged with the theft of a diamond ring. The ring was stolen along with other items of jewelry. It was there held competent to show defendant had possession of the other jewelry.

Now as to the box of rifle shells reportedly missing from the bus station at Rogers. The general and majority rule is that evidence of the possession of stolen property other than that involved in, or connected with, the charged larceny, is not admissible in the state’s case in chief. 32 Am. Jur., Larceny, § 134; 22 A CJS, Criminal Law, § 691(9)b. We can perceive no connection, even remote, between the larceny at the bus station and the larceny for which the defendant was being tried. Of course, if there was some relation between the two thefts, the shells might well have been admissible, otherwise not. Alford v. State, 223 Ark. 330, 266 S.W. 2d 804 (1954). The facts here are essentially the same as in the case of Yelvington v. State, 169 Ark. 359, 275 S.W. 701 (1925). It was shown that Yelvington was in possession of the mules which formed the basis of the charge. A state witness testified that he also saw in appellant’s possession some sets of harness which were shown to have been stolen from still another party. The theft of the harness occurred at a different time and place, having no connection with the theft of the mules. Admission of the testimony relative to the theft of the harness caused a reversal.

Reversed and remanded.

Fogleman, J., dissents.

John A. Fogleman, Justice.

I dissent from the reversal of this case and the court’s holding on Point III as to the rifle shells. The only argument appellant advances on this point is presented as his Point II in the following form:

“The Court erred in permitting Tools, Rifle Shells, Hand Drill and Box of Items introduced in evidence which was highly prejudicial to this Appellant.”

In his argument he states that there is no evidence that any of the tools or rifle shells, other than the items listed in the information charging him with larceny, were stolen and that the State could have no reason for introducing them other than creation of prejudice against appellant.

This case is somewhat different from Yelvington v. State, 169 Ark. 359, 275 S.W. 701. In that case the objection argued here related to testimony concerning other thefts and the possession of property stolen in these thefts. This is not the state of affairs in this case.

The State’s evidence showed: The officers did not search the garage at the home of appellant’s parents. Appellant himself unlocked the garage, went in and picked up various items from various places therein— some out of a tool box, some from a number of other places. The State offered in evidence, through a deputy sheriff who was present, all of the property received by the officers from appellant on this occasion. The deputy sheriff stated that he brought this property to the sheriff’s office where he locked it up. There the property was apparently kept together in a box, because it was described as being in a box by appellant when he testified.

In view of the court’s cautionary instruction referred to in the majority opinion, I can see no error. In the Yelvington case, it was stated that this court had adopted a very liberal rule in declaring exceptions to the general rule of proof of other crimes. Many of them are discussed in that case and others in Alford v. State, 223 Ark. 330, 266 S.W. 2d 804. The matter before us does not actually involve proof of other crimes committed by appellant. It involves only evidence of possession by the appellant of property found in such close connection with the property involved in the charge that the evidence regarding its possession and recovery is virtually inseparable. Certainly, the fact of the possession of the rifle shells appeared naturally and incidentally in showing the whole transaction concerning appellant’s confession, his possession of the property with which he was charged with stealing, its recovery and the identification of the items he delivered simultaneously to the officers. Under the authority of Smith v. State, 162 Ark. 458, 258 S.W. 349, since all the stolen goods were found together, it was a proper part of the officer’s narrative to tell what had been received from Searcy at that time and place. In the Smith case, a deputy sheriff was permitted to testify that when he arrested an accomplice of the defendant, he found a raincoat stolen from a Dr. Hilton among stolen articles which were in an automobile in which the defendant and the accomplice had been seen earlier. The defendant was charged with the theft of automobile casings belonging to one Lawrence about October 4, 1922. The raincoat had been stolen in July 1922.

It was held in Commonwealth v. Gallagher, 200 Pa. Super. 136, 186 A. 2d 842 (1962), that a defendant may not complain of a police officer mentioning items of property stolen in burglaries other than the one on which the defendant was charged while testifying as to what he found at the defendant’s residence. This holding is in harmony with ours in the Smith case, and the rule applied in these cases is applicable here.

I would affirm the judgment of the lower court.


author: John A. Fogleman, Justice.

text:
    Worthen Bank & Trust Co. v. Daniel A. Mosser
    5-4615
    432 S.W. 2d 8
    Opinion Delivered September 16, 1968
    [Rehearing denied October 28, 1968.]

      Wright, Lindsey & Jennings by Isaac A. Scott Jr-for appellant.

      Phillip W. Ragsdale for appellee.
   John A. Fogleman, Justice.

Appellant, as assignee of a conditional sale contract between appellee Mosser as buyer and Bill Short Motors as seller, seeks reversal of a decree cancelling the contract for usury. We agree that the contract was not usurious, and reverse the decree of the trial court.

Mosser negotiated with a salesman of the automobile agency for the purchase of an automobile. Agreement was reached on April 22, 1967, after business hours. This agreement contemplated payment of a purchase price balance of $2,200.00 in 30 monthly installments. The purchaser signed a printed conditional sale contract form without the blanks filled in because no secretaries were then available to type the information in the blanks. He also signed a Motor Vehicle Purchase Order which showed a contract balance of $2,588.40 to be paid in 30 monthly installments of $85.28 each. This total included an item of $63.96 for credit life insurance which did not appear on this order when signed, although this amount was necessary to make the total contract balance. The chancellor’s finding that credit life insurance was not requested or authorized by Mosser is not clearly against the preponderance of the evidence. The blank form signed by Mosser contained a block entitled “Election To Include Credit Life Insurance” which was not signed by Mosser. It was contemplated at all times that the contract would be assigned to appellant. Before it was actually delivered to the bank, the automobile agency’s sales manager discovered this omission of Mosser’s signature on the credit life election. He signed the purchaser’s name to this election, and claims that the total to be paid by the purchaser and the amount of the payments indicated to him that credit life insurance premiums were to be included. When the contract was filled in, it was submitted to appellant which then refused to purchase it because it doubted Mosser’s ability to make the payments the contract provided for, i.e., $85 per month. Thereafter, Mosser persuaded one of the bank’s officials to accept the contract and it was then transferred to the bank.

Some time elapsed between the delivery of the original contract to appellant and the delivery of copies to the purchaser. "When he did call for his copies, both the copy for his own use and the copy to be filed with the Motor Vehicle Division of the Department of Revenues showed an item of $63.96 for credit life insurance added to the unpaid cash sale price balance. It also clearly showed the name of Mosser signed to the form for election to include credit life insurance. A credit life insurance certificate was delivered to Mosser at the same time.

Appellee claims that he did not examine the papers delivered to him until sometime in November 1967 when he was advised by the Motor Vehicle Division that there was some discrepancy in the serial number of the vehicle. Mosser then discovered that someone had signed his name on the election to include credit life insurance. He promptly advised an official of appellant that he had not signed this election. This officer stated that the amount of this premium would be refunded if he had not elected to take the insurance and recognized the right of the purchaser to cancel this insurance. Mosser declined this offer and instituted this action to cancel the contract for usury. Mosser made all payments coming due prior to institution of the suit. The chancellor found that the item added should be treated as interest, that this made the contract usurious and decreed its cancellation.

This case is controlled by Universal C.I.T. Credit Corp. v. Hudgens, 234 Ark. 1127, 356 S.W. 2d 658, 660. The finance charge would have been usurious if the amount of the credit life insurance premium was an item actually constituting a part of the charge for the loan or forbearance. It cannot be said that the dealer was the lender since it declined to make the sale until Mosser persuaded appellant to accept an immediate transfer. Thus, an item included by it in the total cannot be said to be a charge for its forbearance. On the other hand, there is no evidence to show that appellant, who must be considered as the actual lender in this case, received any part of the credit life premium or that it had any information whatever about the unauthorized act of the dealer’s employee in signing appellee’s name to the election of credit life insurance, or that it acted collusively in the transaction. While the act complained of may well have been fraudulent, we find no usury on the authority of the case above cited.

The bank offered to refund the amount of this premium to Mosser. He should have credit for this amount, together with its proportionate part of the total finance charge. It also appears that appellee was permitted to make certain payments on the contract to be paid as directed by the court. For this reason it is necessary that this case be remanded for action by the trial court not inconsistent with this opinion.

Reversed and remanded.


text:
    Herman Wilson Lumber Co. et al v. Lester Hughes
    5-4635
    431 S.W. 2d 487
    Opinion Delivered September 16, 1968

      McMillan, McMillan & Turner for appellants.

      Thomas D. Wynne Jr., and Frank W. Wynne for appellee.
   John A. Fogleman, Justice.

Appellants allege error in the judgment of the trial court rendered January 11, 1968, reversing the Workmen’s Compensation Commission order denying and dismissing the claim of appellee Lester Hughes against his employer, Herman Wilson Lumber Company. The order was based upon a finding that the condition upon which Hughes based his claim was a disease known as aspergillus, a fungus infection of the lung, which was neither caused nor aggravated by his employment. The trial court found that there was no substantial evidence to support the finding of the Commission. We disagree.

Hughes was employed by the employer-appellant, from 1957 or 1958 to March 3, 1965. Ón that day, Hughes coughed and spit up blood while performing his duties for his employer at Leola. He claims that this occurred immediately after a log which he was maneuvering into position to load on a carriage for sawing, suddenly rolled back and jerked him down. He was examined immediately thereafter by Dr. Curtis Clark at Sheridan who made a tentative diagnosis of pulmonary tuberculosis and referred him to McRae Sanatorium. He was treated there until October 12,1965 when he was discharged and referred to the University of Arkansas Medical Center for exploration for the possibility of carcinoma of the lung. Dr. Thomas Bell removed the upper lobe of Hughes’ left lung. This doctor gave the diagnosis of the disease upon which the Commission based its finding. After leaving the hospital, Hughes consulted Dr. George D. Taylor who recommended his return to his job on March 28,1966. Appellee stated that he returned for about one month, but found himself unable to continue.

In reviewing the evidence it must be given its strongest probative force in favor of the action of the Workmen’s Compensation Commission. Holland v. Malvern Sand & Gravel Co., 237 Ark. 635, 374 S.W. 2d 822. The findings of the Commission have the same force and effect as a jury verdict and cannot be disturbed if supported by any substantial evidence. Easton v. H. Baker & Co., 226 Ark. 687, 292 S.W. 2d 257; Williams v. Gifford-Hill & Co., 227 Ark. 340, 298 S.W. 2d 323; Arhansas Best Freight Co. v. Shinn, 235 Ark. 314, 357 S.W. 2d 661; Burrow Construction Co. v. Langley, 238 Ark. 992, 386 S.W. 2d 484. In order to justify a reversal of the Commission’s decision, one appealing must show that the proof is so nearly undisputed that fair-minded men could not reach the conclusion arrived at by the Commission. Hall v. Pittman, 235 Ark. 104, 357 S.W. 2d 263; McCollum v. Rogers, 238 Ark. 499, 382 S.W. 2d 892.

An examination of the record discloses the following which constitutes substantial support of the commission’s action:

In 1957, before his employment by appellant-employer, appellee had consulted Dr. Tilley in Arkadelphia who sent him to the University of Arkansas Medical Center. His discharge summary showed that he came there with a sore throat and hemoptysis. Diagnosis was an infiltrating process of the left upper lobe of the lung and inactive tuberculosis. He was discharged in 1958. Apparently he had no difficulty until the occasion upon which he bases his claim.

Dr. Clark stated that x-rays taken by him indicated pulmonary tuberculosis. After a culture taken by him was positive, his diagnosis was pulmonary tuberculosis, moderately advanced, active. It was his opinion that appellee’s tuberculosis and fungus lung condition were not caused or aggravated by his employment.

The report of Dr. J. V. Lambert, staff physician at McRae Memorial Sanatorium, showed that an x-ray taken on the date Hughes was admitted showed infiltration and fibrosis at the left apex. While an x-ray film taken one month later showed improvement, another taken in September 1965 showed no significant changes. Direct smears on March 11 and 15, 1965, showed positive and a culture on the latter date showed positive for “APB”. All other cultures and gastrics were negative. Discharge diagnosis was pulmonary tuberculosis, minimal, inactive and possible carcinoma of the lung. A progress record from the sanatorium revealed that a “PA” film of July 14, 1960 showed evidence that Hughes then had a disease of the left lung apex with questionable cavity and some infiltration along the left bronchial areas.

Dr. Thomas E. Bell testified, in substance: Appellee’s lung trouble was caused by a fairly uncommon fungus infection which occurs more frequently in persons who have had tuberculosis in the past; the tests at the Medical Center showed no evidence of tuberculosis; the fungus could have been present as long as two or three years prior to the development of symptoms; a man’s work or activity, in my opinion, would not cause or have any relation to the condition at all; while it is possible that a sudden strain could cause the blood vessel running through the infection to rupture, resulting in a spitting up of blood, just the disease process itself produces'the same result; the bleeding is a symptom of the disease and not a disabling condition; if there is bleeding, the disabling condition airead}'' exists.

Dr. G-eorge D. Taylor stated that he first prescribed for Hughes December 6,1965, and after several visits recommended that he return to work May 28, 1966. He also revealed that he had treated Hughes in the fall of 1964 when his nose had bled and he had coughed up blood. This doctor admitted that he had then suspected tuberculosis but did not make any test. Dr. Taylor did not know whether or not Hughes’ disability or operation resulted from his job.

Perhaps the trial court fell into error by reason of its conclusion that statutory law requires that testimony must always be given a liberal construction in favor of the claimant. It is true that it is the duty of the Workmen’s Compensation Commission to draw every legitimate inference possible in favor of a claimant and to give him the benefit of the doubt in factual situations. Holland v. Malvern Sand & Gravel Co., 237 Ark. 635, 374 S.W. 2d 822; Burrow Construction Co. v. Langley, 238 Ark. 992, 386 S.W. 2d 484; Simmons Nat’l. Bank v. Brown, 210 Ark. 311, 195 S.W. 2d 539. But it is not the province or duty of either the circuit court or this court to make a de novo application of this rule on review. Both courts are required to view the evidence in the light most favorable to the findings of the Commission and to ■ give the testimony its strongest probative force in favor of the action of the full commission. Green v. Lion Oil Co., 215 Ark. 305, 220 SW. 2d 409; McCollum v. Rogers, 238 Ark. 499, 382 SW. 2d 892; Burrow Construction Co. v. Langley, supra. The question is not whether the testimony would have supported a finding contrary to the one made, but whether it supports the finding which was made. Campbell v. Athletic Mining & Smelting Co., 215 Ark. 773, 223 S.W. 2d 499.

The action of the Commission was taken more than sixty (60) days after the record of the Workmen’s compensation Commission was filed in the circuit court, contrary to Ark. Stat. Ann. § 81-1325 (b) (Supp. 1967). For this reason, appellants contend that the trial court was without jurisdiction to reverse this action. On the other hand, appellee contends that the 1967 Amendment to the Act is unconstitutional. Inasmuch as this case can be disposed of without determining the constitutional question, it is our duty to do so. County of Searcy v. Stephenson, 244 Ark. 54, 424 SW. 2d 369.

The judgment of the circuit court is reversed.

      We assume that this reference is to Aspergillosis which, according to 2 Gray’s Attorneys’ Textbook of Medicine, § 40.71, is an infection caused by the fungus Aspergillus fumigatus.


author: J. Fred Jones, Justice.

text:
    Paul Walter v. Sue Walter Holman
    4652
    431 S.W. 2d 468
    Opinion Delivered September 16, 1968

      Eugene Coffelt for appellant.

      Little, Enfield & Lawrence for appellee.
   J. Fred Jones, Justice.

The appellant father and appellee mother were divorced by decree of the Benton County Chancery Court on December 29, 1960, and the custody of their two year old daughter was awarded to the appellee. This appeal is from a subsequent order of the court modifying its original decree as to child support and visitation rights previously awarded.

Under the original, decree , in 1960, appellant was ordered to pay $60.00 per month for the support of the child and he was awarded the right to visit the child at all reasonable times. On October 4, 1962, the decree was modified oh motion of the appellant, and in addition to visitation rights at all reasonable times, he was awarded custody of the child, in the home of his mother for three hours from 2:00 p.m. to 5:00 p.m. on one day each week.

The award for child support was subsequently reduced to $45.00 per month and on December 8, 1966, at a hearing on' a contempt citation, the court found that appellant was not guilty of contempt but that he was delinquent in the amount of $500.00 for child support prior to October, 1962, as well as for all the calendar years 1965 and 1966. Appellant was ordered to pay the $500.00 delinquency which had accrued prior to 1962, but lie was relieved of the payments due for the calendar year 1965 and the first eight months of 1966. He was ordered to make the payments for the last four months of 1966. In December, 1966, appellant paid $90.00 and in January, 1967, he paid $90.00, but apparently has made no further payments. The appellee had remarried, and on February 4, 1967, she and the child moved with her present husband to Denver, Colorado where he is stationed in the air force.

On February 17, 1967, the appellant, who still lives in Benton County, filed a motion alleging, as the only change in the condition of the parties, that he had paid child support through December, 1967, and that since that time he had been denied visitation rights with his child; that the appellee had removed the child from the jurisdiction of the court, and from the state of Arkansas, thereby depriving him of his rights of visitation awarded in the original decree. Appellant prayed that he be relieved of monthly payments for child support until the child is returned to the jurisdiction of the court. The appellee responded to the motion and following a hearing on January 18, 1968, the chancellor modified the original decree by the order appealed from which is designated “Modification of Decree.”

Under the order appealed from, the appellee was ordered to return the child to Benton County for visits with the appellant for one week during Easter vacation, one week during summer vacation, and for one week during Christmas vacation. The appellant was ordered to continue support payments at $45.00 per month, and judgment was entered against him for the $500.00 delinquent child support payments which had accrued prior to October, 1962, and also for $585.00 representing delinquent payments for thirteen months from December 8, 1966, through January 8, 1968.

Under the argument in appellant’s brief, he states the substance of his contention as follows:

“The appellee has admitted that the child is in Colorado and the appellant takes the position that it would not be fair or equitable to give to the appellee a judgment for $585.00 for the time the child has been in Colorado and the appellant being deprived of his rights under the order of the court.
“The appellant takes a further view that he should be relieved of future payments until the child is returned to Benton County, Arkansas.”

In support of his argument appellant cites the case of Antonacci v. Antonacci, 222 Ark. 881, 263 S.W. 2d 484. That case is very similar in many respects to the case at bar, but sustains the chancellor’s order rather than appellant’s contention. In the Antonacci case, the appellant worked for a railroad company in Arkansas and his former wife took their child to California. In affirming the decree of the chancellor in the Antonacci case, this court said:

“In addition to the fact that appellant can get a pass to travel by train to California, the court reduced the maintenance payments by half and refused to give the appellee judgment for $500 for unpaid installments of maintenance. All of this will enable the appellant to visit the child in California without any extraordinary expense to himself.
“Appellee has a job that she can go to in California where she earns from $65 to $70 per week, whereas here in Arkansas she can only earn about $32.50 per week. Appellee much prefers to live in California; she is happy there and appears to take good care of the child. We do not think the Chancellor erred in refusing to require appellee to remain somewhat a prisoner in Arkansas because of the unfortunate divorce proceeding.
“No doubt in refusing to allow the appellee judgment for $500 for unpaid installments of maintenance the conrt took into consideration the fact that permission was given for the child to be taken ont of the state and there might be some expense to appellant in the event he wished to visit the child in California.”

The appellant, in the case at bar, is a track driver. He works regularly and his work occasionally takes him through Denver, Colorado where his former wife lives. She has not refused him visitation rights in Denver, and he has made no effort to see his child when in Denver giving as his only excuse in failure to do so, that it would cause him to he late with his load. A parent having custody of a child is ordinarily entitled to move to another state and take the child with her. Ising v. Ward, 231 Ark. 767, 332 S.W. 2d 495. The appellee, in the case at bar, was not restricted to territorial limits in the custody awarded her in the original decree, hut she was ordered to return the child to Arkansas for one week visits three times each year, and there is no evidence in the record that she will not comply with that order.

At some stage of the proceedings the chancellor reduced the child support payments from $60.00 per month to $45.00. At the end of the first year following the divorce, appellant was delinquent in payments of child support in the amount of $500.00. The support payments for the calendar years 1962, 1963 and 1964 are not mentioned in the record, hut appellant was totally delinquent for the calendar years 1965 and 1966. The record indicates that the appellant has paid nothing toward the support of his child since 1964 except a $90.00 payment in December, 1966, and $90.00 in January, 1967. The chancellor relieved the appellant from the payment of twenty of these delinquent monthly payments, amounting to $900.00, before the appellee remarried and moved to Denver, and the appellant has never paid any of the delinquencies as ordered by the court except the two $90.00 payments.

Appellee’s mother lives in Benton County and appellee and the child visited there in August, 1967. They attempted to advise appellant of the impending visit by mail. Appellant left Benton County with his mother in July, 1967 for a visit in Canada. He did not return until September and did not advise the child he was going. Although he drove his Cadillac automobile to Canada and back through Wyoming, Oklahoma and then to New Orleans via Rogers in Benton County, he denies that he passed through Denver or made any effort to do so or to see his child at all during this extended vacation trip.

We recognize that all of the record in the entire divorce proceedings is not before us on this appeal, and properly so, but from the record that is before us, it would appear that appellant has paid nothing toward the support of his child for more than half the period of time that has elapsed since the divorce was granted. The record indicates no effort, whatever, on appellant’s part to visit his child or arrange for her visit with him, and it would appear that appellant is more concerned about the child support than about his visitation rights.

It is a matter of common knowledge that at least one parent must necessarily forfeit some individual rights to the constant companionship of minor children when a divorce decree is granted. In defining and enforcing the rights and obligations of the parties to a divorce action, especially where minor children are concerned, much must be left to the sound discretion of the chancellor under the facts and circumstances of the case before him. Although this court tries equity cases de novo on appeal, we do not disturb a chancellor’s order or decree unless it is clearly against the preponderance of the evidence, or unless the chancellor has abused his discretion.

We held that the chancellor did not abuse his discretion in the Antonacci case, supra, relied on by the appellant and we hold that the chancellor did not abuse his discretion in the case at bar.

Affirmed.