author: George Rose Smith, J.

text:
    Bockman v. Ark. State Medical Board.
    5-1573
    313 S. W. 2d 826
    Opinion delivered June 2, 1958.
    [Rehearing denied July 1, 1958.]

      John G. Sheffield, Eerrn Northcutt and George K. C raer aft, Jr., for appellant.

      Bailey, Warren & Bullion, for appellee.
   George Rose Smith, J.

This is a proceeding instituted before the State Medical Board for the revocation of the appellant’s license to practice medicine. The complaint alleges two statutory grounds for revocation: First, that the license was obtained by fraud, and, secondly, that Dr. Bockman has been convicted of crimes involving moral turpitude. Ark. Stats. 1947 (1957 Replacement), § 72-613. The board, after a hearing at which Dr. Bockman appeared by counsel but not in person, found that both charges were sustained by the evidence and entered an order revoking the license. The record was reviewed on certiorari by the Pulaski Circuit Court, which affirmed the board’s decision.

The appellant contends that the board’s findings of fact are not sustained by any substantial competent evidence. Upon this point it is our rule in proceedings like this one that the board’s action will not be set aside on certiorari unless there is an entire absence of substantial evidence to sustain the findings, in which case the board’s action is deemed to be arbitrary. Hall v. Bledsoe, 126 Ark. 125, 189 S. W. 1041; Eclectic State Med. Bd. v. Beatty, 203 Ark. 294, 156 S. W. 2d 246.

For a reason to be explained later we discuss only the charge that the license was obtained by fraud. Dr. Bockman received his license from the Arkansas Eclectic Medical Board in 1922, although he does not appear to have practiced medicine in Arkansas until about 1937. In applying for the license Dr. Bockman stated on oath that he had attended lectures at the Kansas City College of Medicine and Surgery for four years, beginning in 1917, and that he had been granted a diploma by that institution on May 5, 1922.

The records of the Kansas City school were not available, but counsel for the board introduced the affidavits of six physicians who attended the college and graduated in the class of May, 1922. All six state that Dr. Bockman did not attend the school. It was also shown by affidavit that Dr. Bockman did not appear in the class graduation picture, nor was his name listed in the announcement of the commencement exercises. Counsel also introduced certified copies of judicial opinions rendered in Connecticut, in a proceeding which resulted in the revocation of Dr. Bookman’s license to practice there, in 1928. In detailed findings of fact the trial court found that Dr. Bockman was not a bona fide graduate of the Kansas City school, having merely paid $30 for the privilege of taking an examination (which no one failed to pass if a suitable fee was paid) and having on that basis been awarded an “honorary” degree. The trial court’s decision was affirmed on appeal. Aronson v. State Dept. of Health, 108 Conn. 84, 142 Atl. 476.

This proof is sufficient to sustain the finding that the license was obtained by means of false representations. Although the evidence consists of affidavits and certified copies of court decisions, it was nevertheless competent. This is not a criminal prosecution, in which the accused is entitled to be confronted by the witnesses against him. It is an administrative proceeding, civil in nature, as to which the governing statute provides: “The Board shall not be bound by strict or technical rules of evidence, but shall consider all evidence fully and fairly, provided, however, that all oral testimony considered by the Board must be under oath.” Ark. Stats., § 72-614. A provision of this kind is manifestly appropriate when the board members are not trained in the law, for the tribunal could not proceed at all if it were required to observe technical rules of evidence. Meffert v. State Board, 66 Kan. 710, 72 P. 247, affirmed, 195 U. S. 625. Affidavits are frequently used in quasi-judicial proceedings, as in hearings before the workmen’s compensation commission; there is no constitutional objection to this method of proof in a civil proceeding. Here the evidence is wholly uncontradicted, as Dr. Bookman did not choose to testify or to offer proof tending to refute the charges against him. We have no doubt that the evidence adduced was admissible in a hearing of this kind and was ample to sustain the findings.

Next, it is contended that the board is now without power to revoke any license issued before the passage of Act 198 of 1957. Appellant relies on this proviso in the 1957 statute: “Nothing in this Act shall be construed to invalidate or affect any person holding a valid unrevoked or unsuspended license to practice medicine in this state on the effective date of this act.” Ark. Stats., § 72-623. The argument is that since the 1957 statute authorizes the revocation of licenses procured by fraud (Ark. Stats., § 72-613), the quoted proviso prevents the cancellation of any license that was issued before the act became effective.

This interpretation of the legislative intent is unsound. The statute that was superseded by the 1957 act also provided for the revocation of licenses obtained by fraud. Pope’s Digest, § 10740. Indeed, that provision has been in the statutes for almost fifty years. The 1957 act, among other things, raised the standards for admission to the practice of medicine, by requiring a written examination, fixing the passing grade at an average of 75 per cent, authorizing the board to require all applicants to serve one year of internship, etc. We think it plain that the proviso relied upon by the appellant was inserted to protect physicians already licensed against the possibility of a revocation on the ground that their qualifications did not meet the more stringent requirements embodied in the 1957 act. If the proviso were given the sweeping effect that the appellant would have us attribute to it, it would follow that no license issued before the effective date of Act 198 of 1957 could ever be revoked for any reason whatever. Of course that was not the legislative intention.

Finally, the appellant interposes a plea of res judicata. It is shown that in 1937 a physician, acting as a representative of the medical profession as a whole, filed with the Eclectic Medical Board a complaint asking that Dr. Bookman’s license be revoked on the ground that he had been convicted in New York of crimes involving-moral turpitude. That board declined to revoke the license, holding that the proof of identity was insufficient and that in any event the offenses did not involve moral turpitude. On certiorari the circuit court refused to disturb the board’s findings, and no appeal was taken to this court. That decision is now relied upon as a complete bar to the present proceeding.

We think the plea to be well founded with respect to the second count in the present complaint, which alleges the same New York convictions. When an administrative tribunal acts judicially or quasi-judieially, there are good reasons for holding that its decisions should have the finality that is conferred by the rule of res judicata. See an extended note on the subject in 27 Michigan Law Review, p. 677. Especially is this true when, as here, the administrative decision has been upheld upon judicial review.

The prior decision, however, involved only the New York criminal convictions and is not a bar to the charge that Dr. Bookman’s license was fraudulently procured. It is shown that the attorney for the complainant in the 1937 proceedings knew that Dr. Bockman was not a bona fide graduate of the Kansas City medical school, but that fact ivas not asserted as a ground for the revocation of the license and was not considered by the Eclectic Medical Board. Doubtless the charge of fraudulent procurement of the license might have been joined with the charge of prior criminal convictions, but a joinder was not essential. The two instances of misconduct were entirely distinct, separated in time by a number of years, and had no bearing upon each other. Hence there were two causes of action, and a decision upon the first had no effect upon the second. State Life Ins. Co. v. Goodrum, 189 Ark. 509, 74 S. W. 2d 230. Since it was settled by the Beatty case, supra, that the practice of medicine under a license fraudulently obtained is a continuing offense, no issue of limitations or laches is now presented.

We conclude that the board was entitled to act upon the first charge in the complaint, but the defense of res judicata to the second count should have been sustained. Upon a finding of guilty the board is authorized to revoke the license, or to suspend it, or to place the person charged upon probation. Ark. Stats., § 72-614. The record does not indicate what penalty would have been imposed had the board considered only the charge that the license was procured by fraud. The cause will therefore be remanded, through the circuit court, to the board, to the end that that body may enter an order based only upon its finding that the license was obtained by false representations.

Reversed.


source: Caselaw Access Project

author: Paul Ward, Associate Justice.

license: Public Domain

text:
    Inman v. Kelley, County Treasurer.
    5-1565
    313 S. W. 2d 796
    Opinion delivered June 2, 1958.

      Ivan Williamson and Ben B. Williamson, for appellant.

      8. M. Bone, Charles F. Cole, M. F. Highsmith, C. T. Bennett and Murphy S Arnold, for appellee.
   Paul Ward, Associate Justice.

This appeal calls for the consideration of several Acts of the Legislature fixing the salaries of the several officers (and in most cases their deputies) in Independence County. Appellants contended below, and ably contend here, that these Acts are local and violate Amendment No. 14 to the Constitution of this state. Said amendment was adopted in 1926, and reads as follows: “The Q-eneral Assembly shall not pass any local or special act. This amendment shall not prohibit the repeal of local or special acts. ” The trial court held that the controversial Acts were not local or special, hence this appeal.

We here set out briefly the background leading up to the litigation, and how the issues arose. In 1936, the voters of Independence County adopted Initiated Act No. 3 fixing the salaries of all the county officers. The salaries fixed by the Initiated Act in 1936 were later thought by some to be inadequate, and so resort was had to legislative enactments. In 1955 Act 426 fixed the Assessor’s salary, and in 1957 separate Acts were passed to fix the salaries of all the officers including the salary of the assessor. These Acts will be discussed later.

In August, 1957, D. Inman and other electors and tax-payers of Independence County instituted injunctive proceedings against Beulah Kelley, County Treasurer, to keep her from paying the County Judge’s salary as fixed by the Legislature. It was asserted that said salary was fixed by Initiated Act No. 3. In response to the above, appellee (Beulah Kelley, County Treasurer) set out that the salaries of the other county officers were fixed by similar legislative enactments and therefore subject to question, and prayed that their status be declared by a declaratory judgment. This procedure was agreed to by appellants.

This appeal therefore presents for our consideration the validity of the several acts of the Legislature in question. First it must be stated it is conceded that Initiated Act No. 3, referred to above, has been repealed by the Legislature. For convenience the several Acts in question will be considered under three separate groups.

One. Act 232 of 1957 fixed the salary of the Treasurer ; Act 350 of 1957 fixed the salary of the Sheriff; Act 358 of 1957 fixed the salary of the County Clerk ; and Act 378 of 1957 fixed the salary of the County Judge.

The trial court held all these acts were general and did not offend against Amendment No. 14 to the Constitution, and we are in agreement. An examination of each of these Acts reveals that it deals with all the counties of the state, and fixes the salaries (not in the same amounts) for each county. Precisely the same situation was under consideration in the case of Lawhorn v. Johnson, 196 Ark. 991, 120 S. W. 2d 720, where Act 97 of 1929 was held not to violate Amendment No. 14 to the Constitution of Arkansas. Said Act 97 and the Amendatory Act, 133 of 1931, fixed the salary of the County and Probate Judge in each of the 75 counties in the state, in varying amounts. It is true that the court in that case referred to the fact that the Legislature passed Act 216 in 1931 wherein it was stated that the salaries theretofore fixed for the different county officers of the state were based upon a proper classification according to population, wealth, etc., but it is clear from the language of the court it did not consider that fact controlling. In answer to a contention that the counties were not properly classified as to population and assessed valuation, the court pointed out that the Legislature had the right, in passing said Acts 97 and 133, to take into consideration other matters in determining the amount of salary to be paid in the various counties. The court then also said: “The authority for the Legislature to pass such legislation is specifically granted by the Constitution, Sec. 4, Art. 16, which reads: ‘The G-eneral Assembly shall fix the salaries and fees of all officers of the state, etc.’ ” We agree with the reasoning in the Lawhorn case, supra. In fact no other conclusion would appear to be reasonable or even tenable. If the Legislature is charged with the power and duty to fix the salaries of all county officers, and it is, it could only do so, under the view urged by appellants, by making all salaries for a given office the same in every county. Such a result would of course not be practical. As was said in State, Ex Rel. Attorney General v. Lee, 193 Ark. 270 (at page 273), 99 S. W. 2d 835, “In determining whether a law is public, general, special, or local, the courts will look to its substance and practical operation rather than to its title, form and phraseology . . .” This general rule applies with special significance, it seems to us, in the matter of fixing salaries of county officers in view of the language contained in the Constitution quoted above. In summing up we should emphasize that where the Legislature is dealing with the salaries of county officers, as here, -under the constitutional directive above quoted, it is not necessary to classify the counties as to population or in any other manner but it is necessary that no county be excluded. See Webb v. Adams, 180 Ark. 713, 23 S. W. 2d 617. This is not to say, however, that some of the counties may not be excluded if the exclusion is based on a proper classification.

This court has many times held certain local and special Acts of the Legislature in violation of Amendment No. 14, and appellants have cited and emphasized many of them in their able brief, but it would serve no useful purpose to discuss them. It suffices to point out that all such cases are distinguishable on the facts from the Lawhorn case, supra, and from the case under consideration.

Two. Act 151 of 1957 fixes the salaries of the Tax Collectors in each of the 16 counties in the state where that office is separated from the Sheriff’s office. Among those 16 counties is Independence County. It is the contention of appellants that this Act is special or local and therefore violates said Amendment 14 because it does not apply to all counties in the state. This contention is contrary to many decisions of this court to the effect that reasonable classification is permissible. See Webb v. Adams, supra, Cannon v. May, 183 Ark. 107, 35 S. W. 2d 70, and the Lee case, supra. The general rule is concisely but clearly stated in 50 Am. Jur., page 20-21, under the title STATUTES, General Laws, in these words: “A statute is general where the classification is not arbitrary, but a reasonable, natural and substantial one, resting upon requirements of public policy.” We can hardly imagine a classification that complies with the above mentioned requirements better than the one mentioned in said Act 151. We agree with the trial court that this Act is general and does not violate said Amendment No. 14.

Three. We agree with the trial court that Act 379 of 1957, purporting to fix the salary of the Assessor in Independence is special and invalid. It purports to amend one section of Act 426 of 1955 by creating a classification of counties with a population between 23,400 and 23,600. Not only does it not meet the above mentioned requirements of a valid classification, but it fails to mention all counties in the state. We likewise agree that since said Act 379 is invalid, the Assessor’s salary is fixed by said 426 of 1955. The latter Act is valid, we hold, for both of the reasons heretofore mentioned. It not only includes all counties in the state, but it also sets forth classifications based on population which appear to be reasonable and certainly not arbitrary.

Affirmed.


author: Sam Robinson, Associate Justice. George Rose Smith, J.,

text:
    Harding Glass Company v. Ark. Public Service Commission.
    5-1542
    313 S. W. 2d 812
    Opinion delivered June 2, 1958.

      Charles B. Johnson, Clarksburg, West Va.; Reuben Goldberg, Washington, D. C.; Hardin, Barton, Hardin & Garner, for appellant.

      Claude Carpenter, Jr., for appellee; Thomas Harper, for intervener.
   Sam Robinson, Associate Justice.

This is a rate case. On the 5th day of October, 1956, the Port Smith Gas Corporation (the Gas Company) filed an application for a change of rates for a supply of gas to industrial consumers in the city of Port Smith, the surrounding area and other communities. The Gas Company sought to increase the price from 16.38 cents per Mcf to 20.62 cents. After extensive hearings the Commission granted the requested new schedule of rates on May 17,1957. The protestants took an appeal to the Pulaski Circuit Court, where the action of the Commission was affirmed, and the protestants have appealed to this Court. The principal contention of appellants is that the Commission accepted the contract price for gas supplied by the Stephens Production Company (Stephens) to the Gas Company, the Commission refusing at the time of the hearing to investigate the merits of that contract. Appellants maintain that Stephens is an affiliate of the Gas Company and in these circumstances the Commission should not have accepted the contract price as between Stephens and the Gas Company as a bona fide operating expense.

In 1945 W. R. Stephens bought the controlling interest in the Gas Company. At that time and up until 1953 the Gas Company bought more than 97 per cent of its gas from the Arkansas-Oklahoma Gas Corporation (Arkansas-Oklahoma). This company owned gas production properties and owned a distribution system whereby it supplied gas to the Gas Company at the city gates of Port Smith and supplied gas and distributed the same in several small towns in Oklahoma and Arkansas. In 1953, the owners of the Arkansas-Oklahoma decided to liquidate that company and put up for sale all of its properties, including the production properties and the distribution systems. In that connection, in an order made on December 22, 1953, which will be referred to again, the Commission made a finding of fact as follows: “The majority of the common stock of Arkansas-Oklahoma Gas Company has for many years been owned by a group of residents of Port Smith, Arkansas, and these stockholders have recently expressed a desire to sell the stock and have offered such stock for sale to various interests, including persons not residents of the areas served by the two companies, which caused the owners of the stock of the Port Smith Gas Corporation and its officers and directors to become concerned as to the continuation of their source of supply of gas from the Arkansas-Oklahoma Gas Company at the termination on December 31, 1965, of the service agreement between the two companies.”

Por its supply of gas the Gas Company was almost wholly dependent on a contract with Arkansas-Oklahoma which had only twelve years to run. To protect his Port Smith Gas Company’s source of gas supplies, Stephens made a deal whereby the Port Smith Gas Company bought the distribution system of Arkansas-Oklahoma, and he and his brother, J. T. Stephens, along with the Northwestern Mutual Life Insurance Company, bought the production properties. Stephens assumed heavy obligations by contracting to maintain and develop the properties and explore for gas at his own expense. This is a hazardous business. There are many dry wells; production may be obtained or it may not. The North•western Mutual Life Insurance Company put up $4,-333,000 to pay Arkansas-Oklahoma. Stephens contracted with the Gas Company to supply gas at the wellhead at 12.7819 per Mcf. The Gas Company had been paying Arkansas-Oklahoma 17.38 at the city gate. All of these transactions were aboveboard and the whole plan was laid before the Oklahoma Public Service Commission, the Arkansas Public Service Commission, and the Federal Power Commission. The Arkansas and Oklahoma Commissions approved the sale, and the Federal Power Commission held hearings and granted the application. The contract between the Gas Company and Stephens was made on March 2, 1954, after the Arkansas Commission, in Docket No. U-902, had found in December of 1953 that the price of 12.7819 per Mcf was reasonable. In its findings and order of May 17, 1957, in the case at bar, Docket No. U-1169, approving the new rate schedule, the Commission referred to its order in Docket No. U-902, wherein the contract was approved. The Commission said: “This Commission, after full investigation and hearing, from which it was fully developed, as shown by the contract itself, and the exhibits attached to the Company’s response to protestants’ motion, found that the dedication of the large gas reserves, made a condition of the contract, was essential to the Fort Smith area. The Commission further found that therefore the contract and the contract rate was fair and reasonable, and that in the public interest it was necessary that the contract and the contract rate be approved and the transfer of properties proposed be authorized. Therefore, the Commission, by its order of December 29, 1953, in our Docket No. U-902, approved the contract and the contract rate of 12.7819 cents per Mcf which the protestants here seek to attack.

“Northwestern Mutual Life Insurance Company of Milwaukee, Wisconsin, owner of the Production Payment supported by the gas reserves dedicated under the contract in question, obviously relied on our order in this docket and on the order of the Federal Power Commission approving the transaction in Docket No. G-2332-33 as a basis for accepting the production payment which, made the transaction possible. We have no reason now to recede from the position originally taken by us that our approval of this contract and this transaction was then and now is in the public interest. . . . ’ ’

The Commission points out that by reason of the Supreme Court decision in the case of State of Wisconsin v. Federal Power Comm’n., 205 F. 2d 706 (Phillips Petroleum Co. v. Wisconsin, 347 U. S. 672, 74 S. Ct. 794, 98 L. Ed. 1035) (the Phillips Petroleum Company case), it has no jurisdiction over the Stephens Production Company, but that it does have jurisdiction over the rates charged by the Gas Company to its customers. The Commission said: “Moreover, even though we do not consider that we have jurisdiction over the price charged the Company under the contract, we do have jurisdiction over the Company’s rates to its customers, and having already found the contract price fair and reasonable, we still would consider it so for the purpose of the application here under consideration.” Furthermore, the Commission had knowledge of the fact that subsequent to 1953, when the 12.7819 per Mcf was approved, a wellhead price of 16 cents per Mcf had been allowed for gas produced in the same area. The Commission may take notice of a fact of that kind. Acme Brick Co. v. Arkansas Public Service Comm’n., 227 Ark. 436, 299 S. W. 2d 208.

Appellants say: “It is not enough that money ($4,-333,000) has in fact been spent; there must be proof that it was wisely, reasonably, and necessarily spent.” The spending of this money was approved by the Arkansas Public Service Commission, the Oklahoma Public Service Commission and the Federal Power Commission. It is hard to see how any stronger proof could be produced that the money was wisely, reasonably and necessarily spent.

Appellants further contend: “In view of the ownership and control of Fort Smith and Stephens Production Company, the record in this case in sufficient to support the conclusion that there is in practical effect one organization and that for the purpose of fixing rates in this case, the amount to be allowed for gas purchased in the cost of service is not the contract price of 12.7819 cents per Mcf, which was not the product of arm’s-length bargaining, but only the cost of production of the gas at the wellhead.” Even under this theory the Commission must be sustained, because, according to the undisputed testimony in the case, the gas cost Stephens and Northwestern $4,333,000, and when the formula used by Mr. Williams, appellants’ expert, is applied to the cost of the gas at the wellhead, $4,333,000 would result in a price for the gas of 13.185 per Mcf.

Appellants say Stephens should have acquired the gas reserves for the Gas Company. According to this theory, some other gas distributing company of which Stephens may be the president could make the same claim. If the Gas Company owned the reserves of gas it would be at the price of $4,333,000, and this amount would be a part of the rate base supporting a price of 13.185 per Mcf. If the $4,333,000 were put in the rate base of the Gas Company and the gas ran out before that much was produced, surely there would be a hue and cry, and rightfully so, about the gas ever having been made a part of the rate base in the first place. The gas purchased by Stephens is under the ground. It cannot be seen, and the amount there is only speculative. Paying $4,333,000 for gas properties that may be depleted before anything like that much is produced is a big gamble, and one that in all probability the Gas Company’s customers would not want to take and certainly should not be compelled to take.

There is no serious contention that the rate of 20.62 per Mcf is not fair and reasonable if the price of 12.7819 paid by the Gas Company for gas at the wellhead is fair and reasonable. The order approving the contract, in Docket No. U-902, is made a part of the record, and that order itself shows that the Commission went into the matter thoroughly. Among other things there is this finding: “In order to obtain a dedication of the present gas reserves of the Arkansas-Oklahoma Gas Company and those gas reserves hereafter developed from its gas properties for the use of the Port Smith Gas Corporation and the area presently served by it from gas acquired from Arkansas-Oklahoma Gas Company, W. R. Stephens has entered into a contract for the purchase of approximately 82 per cent of the outstanding common stock of the Arkansas-Oklahoma Gas Company, and Arkansas-Oklahoma Gas Company has entered into a contract with Port Smith Gas Corporation for the sale of its gatherings, transmission and distribution systems. Simultaneously with the transfer of these facilities of the Arkansas-Oklahoma Gas Company to the Port Smith Gas Corporation, there will be effected a transfer of the gas production properties of Arkansas-Oklahoma Gas Company in liquidation of that company to the Arkansas Valley Mineral Company, Inc., and the Wilt ex Corporation, which companies have contracted to furnish gas at the well head to Fort Smith Gas Corporation at the price of 12.7819 cents per m.c.f. . . .” (The Arkansas Valley Mineral Company, Inc., and Wiltex Corporation contracts were assigned to Stephens.)

The gas purchase contract has been filed as a tariff with the Federal Power Commission. True, the Arkansas Commission may not be bound to accept as part of the rate base of the Gas Company the price named in the contract filed with the Federal Power Commission, but here the Commission had already made a finding that the price named in the contract is reasonable. There is no suggestion that there has been any change in conditions since the Commission approved the contract that would justify a lowering of the price at this time. Under the terms of his contract, which is a part of the record, Stephens must explore and drill for gas. This is necessary to maintain the supply, and it is a matter of common knowledge that labor and materials are much higher now than in 1953, when the contract price of 12.7819 was approved. Even though it costs more to produce gas now than it did in 1953, the contract price of 12.7819 is not being changed, and the increase in rates is due to the Gas Company’s increase in the cost of doing business because of factors other than the cost of gas, which price remains as fixed by the 1953 contract. It is hard to understand how the 12.7819 price paid by the Gas Company could be excessive when, according to the undisputed evidence, in an arm’s-length deal, Arkansas-Oklahoma received $4,333,000 for its gas production properties. And when the price of gas sold by Stephens to the Gas Company is based on the $4,-333,000 cost, the price, figured by a formula about which no one complains, is 13.185, instead of 12.7819, the price the Gas Company is paying.

Appellant cites authority for the proposition that the Arkansas Commission has the power to fix the rates at which the Gas Company must sell its gas, notwithstanding the Arkansas Commission has no authority to fix the price at which Stephens, who is operating in interstate commerce, must sell to the Gas Company. Authority also is cited to the effect that the Commission’s order approving the 12.7819 rate is not res adjudicata. But even though the Commission does have the authority to fix the Gas Company’s rate, regardless of the price it may be paying Stephens for gas, and notwithstanding the order approving the 12.7819 rate is not res adjudicata, still the Commission does not have to disregard the contract price just because it has the power or authority to do so. True the Commission could disregard the contract price between Stephens and the Gas Company and refuse to grant an increase in rates. But, in order to do this the Commission would have to ignore completely the contract it has heretofore approved for the sale of gas to the Gas Company. And, moreover, it would have to ignore the fact that $4,333,000 was paid for the gas properties. Assuming that the Commission could disregard its approval of the contract, the Oklahoma Commission’s approval of the contract, the Federal Power Commission’s approval of the sale of the properties, and all that, has been done on the strength of the contract, the fact remains that $4,333,000 was paid for the gas. When this purchase price is considered, a wellhead price of 13.185 per Mcf is reached. This is more than the Gas Company is now paying.

It has been suggested that perhaps Arkansas-Oklahoma sold the distribution system for less than it was worth and balanced the transaction by selling the gas properties for more than a fair value. This suggestion is wholly unsound. In the first place, the Commission made a determination of the fairness of the price of the distribution system and set out in its order of December 22, 1953 just how the price was determined. The order provides: “The price of the properties to be acquired by the Port Smith Gas Corporation from the Arkansas-Oklahoma Gas Company will be the depreciated book value of such properties, as reflected by the books of the Arkansas-Oklahoma Gas Company at the date of the transfer. This depreciated book value is also the depreciated original cost of such properties as determined by the Federal Power Commission and appears to reflect the fair value of the properties to be transferred.” In the next place, the Gas Company and its alleged affiliate, Stephens, could not gain by a maneuver of that kind, because if the distribution system were sold to the Gas Company for less than its worth, this low price would go into the rate base.

As authority for the contention that the Commission should not accept the contract price for gas between affiliates, appellants cite Western Distributing Co. v. Public Service Comm’n., 285 U. S. 119, 52 S. Ct. 283, 76 L. Ed. 655; Dayton Power & Light Co. v. Public Utilities Comm’n., 292 U. S. 290, 308, 54 S. Ct. 647, 78 L. Ed. 1267; Mississippi River Fuel Corp. v. Federal Power Commission, 252 P. 2d 619; and Re Amere Gas Utilities Co., 1 P. U. R. 3rd 230. It will be observed, however, that in every one of those cases except the Amere case there is nothing* in the record to show the cost of the gas to the affiliate on the production end of the contract, whereas in the case at bar the Commission knows what the gas cost the affiliate. The distinction is obvious. In the Amere case, in an opinion written, not by a court bnt by a public service commission, it is not at all clear just what the commission found the facts to be, but in any event the facts in the case at bar bear no resemblance to that case.

This Court, along with the great weight of authority, has held many times that the Commission has broad powers and is vested with wide discretion; that if the order of the Commission is supported by substantial evidence, is free from fraud and not arbitrary, it is the duty of the court to let it stand. In Dept. of Public Utilities v. Arkansas-Louisiana, Gas Co., 200 Ark. 983, 988, 142 S. W. 2d 213, it is said: . . if the Department’s order is supported by substantial evidence, free from fraud, and not arbitrary it is the duty of the courts to permit it to stand, even though they might disagree with the wisdom of the order. In such a case our judgment will not be substituted for that of the Department. ’ ’

And in Arkansas Power & Light Co. v. Arkansas Public Service Gomm’n., 226 Ark. 225, 226, 289 S. W. 2d 668, it is said: “At the outset we point out certain well defined rules governing this court in reviewing the powers and actions of the Arkansas Public Service Commission in a utility rate case such as is presented here. The Commission must and does have broad powers and is a fact finding body. Our Legislature has delegated and entrusted the administration of Act 324 to the Commission, and not to the courts. . . . Apart from the judicial review that may be resorted to under the Act, it is not for us to advise the Commission how to discharge its functions. When an appeal is taken to the circuit court, that court, as well as this court on appeal from the circuit court, shall not extend the review of the Commission’s findings and actions ‘further than to determine whether the Department (Commission) has regularly pursued its authority, including a determination of whether the order, or decision under review, violated any right of the complainant under the Constitution of the United States or of the State of Arkansas.’ (Sec. 73-233(d) Ark. Stats.) The circuit court, and this court on appeal, reviews the Commission’s findings on the record before the commission, and if we find any substantial evidence to support it, it is our duty to permit the Commission’s order to stand if it is not arbitrary and is free from fraud. * * *”

In Petition of Central Vermont Public Service Corp., 116 Vt. 206, 71 A. 2d 576, 578, the court said: “An administrative agency performing the delegated legislative function of rate making has a broad discretion. Mr. Justice Cardozo, speaking for the United States Supreme Court, said of it: ‘Regulatory commissions have been invested with broad powers within the sphere of duty assigned to them by law. Even in quasi-judicial proceedings their informed and expert judgment exacts and receives a proper deference from courts when it has been reached with due submission to constitutional restraints. . . . Indeed, much that they do within the realm of administrative discretion is exempt from supervision if those restraints have been obeyed.’ ”

In the case at bar there is no suggestion of fráud, and it cannot be said that the Commission’s action was arbitrary in any respect. The only real issue in this case is whether the price of 12.7819 for gas paid by the Gas Company to Stephens is reasonable, taking into consideration that the gas cost $4,333,000. The Commission had full knowledge of what the gas cost Stephens and approved as reasonable and fair the price of 12.7819 per Mcf based on substantial evidence of the cost of the gas.

Affirmed.

George Rose Smith, J., dissents.

George Rose Smith, J.,

dissenting. In this case the Gas Company asks for an increase in its rates. That request carries with it the burden of proving that a higher rate schedule is necessary to afford the company a fair return on its investment. “When a utility seeks an increase of existing rates, the burden is, of course, on the utility not only to offer all evidence to justify such increase, but also to comply with all reasonable requests of the Commission for full disclosures. The Commission, in such instances, has not only the prerogative but also the duty to make requirements for full disclosure, since the Commission acts under valid Legislative authority to see that the interests of the public are fully protected. ’ ’ City of Fort Smith v. Southwestern Bell Tel. Co., 220 Ark. 70, 247 S. W. 2d 474.

The Gas Company, which is wholly owned (except for three qualifying shares) by W. E. Stephens, owns no gas wells and buys more than 97 per cent of its gas from Stephens Production Company, a partnership which is also controlled by W. E. Stephens. These purchases, which in substance are made by Stephens as buyer from Stephens as seller, constitute roughly five eighths of the Gas Company’s costs of service and therefore represent what is by far the most important factor in the determination of the company’s proper allowance for operating1 expense.

The purchases in question are made at a price of between twelve and thirteen cents per thousand cubic feet of gas. This price was fixed by a contract which in substance was entered into between Stephens as seller and Stephens as purchaser in 1954. When the Gas Company filed its present application for an increase in rates the protesting consumers, on the basis of facts that I have merely outlined, asked the Public Service Commission to require the utility company to justify the reasonableness of the price it was paying for its gas. That the Commission had the authority to make this inquiry and to allow only a fair price as an operating expense, even though the gas was being sold in interstate commerce, was expressly decided in Western Distributing Co. v. Public Service Commission, 285 U. S. 119, 52 Sup. Ct. 283, 76 L. Ed. 655.

The consumers’ request for a full disclosure of the facts was vigorously opposed by the Gas Company. Its position was sustained by the Commission, which refused to require the Gas Company to justify the price it was paying for gas, refused to require the Stephens affiliated companies to allow the protestants access to the pertinent books and records, and refused to permit the Gas Company’s witnesses to be cross-examined about the reasonableness of the price being paid for gas. In short, the Gas Company was relieved of the burden of proving the most vital element affecting its application for a rate increase, and the consumers were denied the right of cross-examination as an aid to their attempt to sustain a burden of proof that was not really theirs. In my opinion the only issue on this appeal is whether the Commission erred in accepting the Gas Company’s contract price and in effectively shutting the door to any inquiry on the subject.

The majority opinion, as I read it, upholds the Commission’s ruling on two grounds. First, it is indicated that the present record supports the view that the contract price is in fact a reasonable one. Bearing in mind that this issue or fact has never been explored in an adversary proceeding, I think it a sufficient answer to make these observations:

(a) The price was fixed not at arm’s length but in a transaction in which the buyer and the seller were essentially the same person. As the buyer Stephens was under a duty to the consuming public to obtain the gas as cheaply as possible. As the seller Stephens was naturally inclined to obtain as high a price as possible. This conflict of interest is the same as that which rigidly precludes a trustee from selling to himself and certainly suggests that this contract price should be open to scrutiny.

(b) The uncontradicted evidence shows that the contract price was not determined primarily by the market value of the gas. In a somewhat complex transaction Stephens in effect borrowed, without personal liability, $4,335,000 from the Northwestern Mutual Life Insurance Company in order to finance the purchase of the gas-producing properties. The contract price now in dispute was fixed at a rate sufficient to retire this indebtedness within a certain number of years, the exact period apparently not being shown by this record. This means that if, for example, the gas reserves have an expected life of fifty years and the term of the loan is only twenty-five years, the consuming public will pay the full purchase price, in the form of excessive gas rates, during the first twenty-five years, and Stephens Production Company will emerge as the owner of the gas, which presumably will then again be sold to the public. The majority’s suggestion that the extent of the gas reserves is “only speculative” does not seem wholly convincing. I am not persuaded, especially without proof, that a life insurance company would advance more than four million dollars without being certain that the security actually exists and that its value exceeds the amount of the loan.

(c) At every step of this proceeding the Gas Company has strenuously opposed the consumers’ efforts to investigate the fairness of the contract price. I am unable to reconcile this attitude on the part of the utility with its simultaneous insistence that the price is really less than the Commission would be required to fix if the facts were fully disclosed.

(d) Finally, in my judgment the issue is not whether this incomplete record shows the price to be reasonable but, rather, whether the Gas Company should be required to meet the burden of proof imposed by law. It seems to me idle to speculate upon a question of fact when the proof is admittedly undeveloped.

Secondly, the majority relies upon the fact that the transaction by which Stephens acquired the assets of the Arkansas-Oldahoma Gas Company was approved by the Arkansas Public Service Commission, the Oklahoma Public Service Commission, and the Federal Power Commission. It is of course not contended that those rulings are res judicata, for that doctrine does not apply in rate-making matters, which are always open to re-examination.

The trouble with this second ground for affirmance is that the Gas Company has not met the burden of showing that the earlier proceedings were adversary contests in which the reasonableness of the contract price was at issue. As a public utility the Arkansas-Oklahoma Gas Company was required to obtain the consent of the three commissions before it disposed of its assets and went out of business. That was the issue in those proceedings, which was resolved by a finding that the proposed transfer of ownership was not contrary to the public interest.

There was no reason for the Arkansas Public Service Commission to investigate the contract price, since it was not a rate-making case, and in fact the Commission merely found that the price was “necessary in order to finance the acquisition of the producing properties of the Arkansas-Oklahoma Gas Company, ’ ’ and that it ‘ ‘ appears to be reasonable.” We were told in the oral argument, without contradiction, that no representative of the consumers was a party to the proceedings, and indeed there was no reason why they should have been represented. As far as the consumers are concerned that proceeding was an uncontested ex parte case in which no one involved had the slightest inclination or motive to attack the fairness of the contract price now at issue. In these circumstances the public evidently has had no opportunity to be heard on the question of whether the price is reasonable, and I am firmly of the opinion that that opportunity should have been granted in the present proceeding.


author: Carleton Harris, Chief Justice.

text:
    Board v. Van Houten.
    5-1583
    313 S. W. 2d 843
    Opinion delivered June 9, 1958.

      Ted McCastlain, for appellant.

      Frances D. Holtsendorff, for appellee.
   Carleton Harris, Chief Justice.

Appellee, C. D. Van Houten, instituted this action to obtain possession of a certain 80 acres of land located in Prairie County, Arkansas. The complaint was filed in November, 1955, in the Circuit Court of Prairie County (Northern District), and a default judgment was granted in favor of Van Houten February, 1956, which was later set aside. Appellant herein, Anne Board, intervened during the same month, claiming title to the lands in controversy by virtue of a deed from her mother and father, dated April 17, 1947, and recorded March 19, 1954. Upon her motion, the cause was transferred to the Chancery Court of the Northern District of Prairie County.

The background of this litigation is as follows. The Crittenden County Chancery Court entered a decree on July 25, 1952, awarding judgment against Mrs. Howell in the amount of $3,416, and to secure same, a constructive trust was declared. An alias execution was issued by the clerk of the Crittenden County Chancery Court pursuant to said decree. The judgment creditor caused a certified copy of the decree to be recorded with the clerk and recorder of the Northern District of Prairie County on August 14, 1953. As of that date, the record title to the lands in controversy was in the name of Maurine Howell, who had acquired her title by deed in 1945. Subsequently, execution was issued in September, 1953, and an order was issued by the Prairie Chancery Court, restraining the sale until after a further hearing in the Crittenden County Chancery Court; following the refusal of the latter court to set aside its decree, the Prairie County sheriff advertised the lands for sale, and said sale was held on June 5, 1954. Appellee was the highest bidder for the lands, and at the end of the statutory period for redemption, received his sheriff’s deed (June 5, 1955). Upon trial of the issues, the chancellor dismissed appellant’s intervention and cross complaint, awarded appellee possession of the lands in controversy, and quieted and confirmed his title in and to said lands, as against the defendant, Maurine Howell, and the intervener, Anne Board. From such decree, comes this appeal.

For reversal, appellant simply asserts that the chancellor had no authority to cancel appellant’s deed, dated April 17, 1947, except for fraud in its procurement, and contends that the appellee failed to meet the burden of' proof necessary to establish such fraud. Appellee contends that the deed from Maurine Howell to her daughter was a fraudulent conveyance, made in an attempt to-defeat the right of judgment creditors, and furthermore contends, that because appellant had personal knowledge of proceedings to sell the land, and the sale itself, and did not assert any right to said lands for long months afterwards, Mrs. Board is barred by laches and estopped from claiming title to said lands. We shall not discuss the latter contention, since we feel the issue is determined by the former.

After a review of the testimony and exhibits, we have come to the conclusion that the proof was ample to support the chancellor’s action in cancelling the deed dated April 17, 1947, for we consider the preponderance of the evidence to reflect that the deed was not actually executed at that time.

Appellant testified that she lives at Miami, Florida, with her husband, having lived there since 1956 . . . the property was deeded to her by her father and mother on April 17, 1947 . . . her child had been stricken with polio the summer before, and the purpose of the conveyance was to provide witness and her child with a permanent home . . . she was living on the property at the time of the execution of the deed . . . did not record the deed at the time because she had gotten a divorce in January of 1946 and “I just did not want any legal complications coming up ... put the deed with some other papers and misplaced it . . . later located it, but saw no need to record it until March, 1954 . . . recorded it at that time because “they were going to sell the property in my mother’s name,” and witness did not want her own property sold . . . she lived in “West Memphis in 1951 and part of 1952 . . . returned to Prairie County in May of 1952, and moved to an adjoining 40 acres, her mother and father living on the 80 acres in question . . . she continued to live on the 40 acres from 1952 to 1956 and her mother and father continued to live on the land here in litigation . . . the reason for such arrangement was that the house on the 40 acres was larger and appellant needed more room . . her mother has paid all taxes on the 80 acres from 1947 through 1956 (except for the year of 1955 when taxes were paid by Van Houten) . . . though her parents have lived upon and farmed the land in question, no rent has been paid by them ... in 1956, appellant moved to Florida, where she presently resides.

A pertinent exhibit is a deed from Mrs. Howell to her daughter dated August 18, 1953. This deed conveys identically the same property as purportedly was conveyed by the deed of April 17, 1947, and was also recorded on August 18, 1953. When questioned about the need for this deed, if the first had already been executed, Mrs. Board testified that it was executed because the first one had been misplaced. We think it significant that it was recorded on the same date it was executed, though she testified that one reason for not recording the 1947 deed was that she did not know “it was necessary.” Of even more significance is the fact that the 1953 deed was executed and recorded only four days after the certified copy of the judgment of the Crittenden Chancery Court was recorded in Prairie County. Since such deed was executed after the recording of the judgment, it, of course, was of no aid in defeating creditors, as the lien on the real estate had already attached. Such lien could only be defeated if a bona fide deed had been executed prior to the recording of the judgment. One of the most incongruous parts of Mrs. Board’s testimony dealt with certain language used in both deeds. Appellant testified that the deeds were prepared by her mother. Both convey the property to appellant and contain the typed in language:

“As feme sole, to her sole and separate use, free from debts, contracts, control and marital rights (including courtesy both initiate and consummate) of her present or any future husband she may have, with full power in her to sell, mortgage, convey, encumber, devise or otherwise dispose of same as though she were a feme sole. ’ ’

This knowledge of the law hardly seems compatible with Mrs. Howell’s general background.

The deed, purportedly executed in 1947, was acknowledged by one M. S. Dorsett, justice of the peace, and in going to the home of Mr. Dorsett, the Howells drove several miles further than would have been necessary had they gone to the county seat at Des Arc. Mr. Dorsett testified that the date had already been typed in when presented to him, and that he could not state upon what date the deed was acknowledged. From the testimony:

“Q. You wouldn’t know whether it was in 1947 or 1954 when they came before you?

A. Well, I am not swearing to it, not the date, not the exact date on that, no, I am not. * * * It was several years back. I don’t keep no records of it.”

Sheriff E. O. Hamilton of Prairie County testified that he conducted the sale on June 4, 1954, and that Mrs. Howell and Mrs. Board were present. He testified they were objecting to the sale, and when asked as to their reason for objecting, answered:

u* * * They gtated the land belonged to Mrs. Howell, that she did not want it sold until she could finish her lawsuit, was my understanding.

Q. I will ask you if at any time Mrs. Howell or Mrs. Board, during the execution of sale or before the execution of sale, stated to you that Mrs. Anne Board was the owner of that property or that she was claiming to be the owner?

A. I just don’t recall them claiming it was hers.”

Appellant admitted that she knew her mother had brought a suit in the Prairie Chancery Court in October, 1953, seeking to restrain the sheriff from proceeding with the sale at that time, and stated: “I was not into it at all, other than it was my property, and she was trying to have this judgment set aside, as far as I knew.” She further admitted she was aware that her mother had filed a motion in the Crittenden court to set aside the original judgment, and that that court had entered an adverse ruling. She testified that her reason for not joining in the court actions to prevent the sale was that her child required all of her attention, “and still does.” This explanation appears a bit “shallow” since it takes but little time to consult an attorney, and more particularly, since Mrs. Board seems to have had sufficient time to subsequently consult attorneys.

Summarizing the evidence upon which we base this opinion, we find:

1. That although appellant claims the property became hers in April, 1947, she has never paid any taxes, and the taxes through 1956 have been paid by her mother.

2. Her reasons for failure to record the deed are unimpressive. First, she stated she was afraid of legal complications from her ex-husband (from whom she had been divorced more than a year prior to receiving the deed) concerning the property; subsequently, she misplaced the deed, then, after locating it, failed to record same because she didn’t know it was necessary.

3. While stating that the property was given to her as a home for herself and child, she apparently has made no such use of it, since the evidence reflects she has not lived on the place since prior to 1951, though living on an adjoining forty for four years of that time.

4. During the above period, the land involved was farmed by her mother and Mr. Howell, though admittedly no rent was paid to appellant.

5. The deed of August 18, 1953, was executed, and recorded, only four days after the certified copy of judgment of the Crittenden Chancery Court was recorded in Prairie County.

6. Appellant admitted she was familiar with her mother’s efforts to prevent the sale of the property, but did not join in such efforts.

7. Sheriff Hamilton stated that at the time of the sale in June, 1954, both were present, and claiming the land belonged to Mrs. Howell.

8. The 1947 deed was not recorded until Mrs. Howell’s motion to vacate the original judgment had been denied.

We are of the opinion that this evidence was sufficient to establish that the deed dated April 17, 1947, was not actually executed at that time; that it was executed subsequent to the recording of the certified copy of judgment from Crittenden Chancery Court; was executed for the purpose of defrauding creditors, and the Chancellor was justified in cancelling both deeds.

Affirmed.

       See Howell v. Van Houten, 227 Ark. 84, 296 S. W. 2d 428.

       Appellant also filed a cross complaint against Van Houten, Sheriff E. O. Hamilton, and one Fletcher Livesay, seeking damages allegedly resulting from the wrongful sale of the property. This issue was not developed during the trial.

       See Section 29-130, Ark. Stats. 1947 Anno.


author: J. Seaborn Holt, Associate Justice. Carleton Harris,

text:
    Garner v. Greene County.
    5-1581
    313 S. W. 2d 785
    Opinion delivered June 9, 1958.
    [Rehearing denied July 1, 1958.]

      Cecil Grooms, for appellant.

      Kirsch, Cathey <& Brown, for appellee.
   J. Seaborn Holt, Associate Justice.

On March. 18, 1957, appellees filed their petition in the Greene County Court praying for an order granting a certain county road, and on the same day the county court granted their petition. On April 29, 1957, appellant, Garner, an interested citizen and taxpayer, who was not however a party litigant, filed an affidavit and prayer for an appeal to the circuit court of Greene County, and on April 30,1957, the circuit cleric ordered the appeal. On August 17, 1957, appellees filed motion to dismiss Garner’s appeal and thereafter, on August 28, 1957, the circuit court granted appellees’ motion and dismissed Garner’s appeal. On August 31, 1957, Garner, who was not then a party, for the first time filed in the county court his verified petition to be permitted to intervene and become a party to the action under which appellees’ petition for the road had been granted. He further asked that the March 18, 1957, order granting the road he set aside and on September 4, 1957 the county court denied Garner’s petition to intervene. On September 7, 1957, Garner appealed from the county court’s order denying his petition to intervene and upon appellees’ motion, the circuit court on November 7, 1957, thereafter, dismissed Garner’s appeal and from this order of dismissal comes this appeal.

Appellant stoutly insists that the trial court erred in denying him the right to appeal from the order of the county court on March 18, 1957, and we agree. Appellant was an interested citizen and taxpayer of Greene County and his right to appeal here is based on Article 7, Section 33, of the constitution of this state, which provides: “Appeals from all judgments of county courts or courts of common pleas, when established, may be taken to the circuit court under such restrictions and regulations as may be prescribed by law.” And, under the provisions of Sec. 27-2001 Ark. Stats. 1947, relative to appeals, which provides: “Appeals shall be granted as a matter of right to the circuit court from all final orders and judgments of the county court, at any time within six (6) months after the rendition of the same, either by the court rendering the order or judgment or by the clerk of the circuit court of the proper county, with or without supersedeas, as in other cases at law, by the party aggrieved filing an affidavit and prayer for an appeal with the clerk of the court in which the appeal is taken; and upon the filing of such affidavit and prayer the court rendering the judgment or order appealed from or the clerk of the circuit court shall forthwith order an appeal to the circuit court at any time within six (6) months after the rendition of the judgment or order appealed from, and not thereafter. The party aggrieved, his agent or attorney, shall swear in said affidavit that the appeal is taken because the appellant verily believes that he is aggrieved, and is not taken for vexation or delay, but that justice may be done him.”

In the present case Garner by his verified petition to intervene and to be made a party to the action on August 31, 1957, as of that date became a party to the record in the county court and had the right to appeal, from any adverse decision, to the circuit court at any time within six months after the decision, (March 18, 1957) in accordance with the provisions of the above statute, and, as indicated, the circuit court erred in denying appellant the right to intervene and to become a party. We said in McMahan v. Ruble, 135 Ark. 83, 204 S. W. 746, “It is first insisted that the appeal was properly dismissed because appellant was not a party aggrieved within the meaning of the law. But that contention cannot be sustained. Appellant made himself a party to the record in the county court, and he was, therefore, entitled to appeal from an adverse decision . . . As a citizen and taxpayer he had the right to be made a party to the proceeding in the county court.” And, in the early case of Lee County v. Robertson, 66 Ark. 82, 48 S. W. 901, we said: “. . . the motion by appellee to be made a party for the purpose of protesting against this illegal proceedings does not manifest the impertinent interference of a stranger without interest, and, when made a party, by order of the court, he may prosecute an appeal from the judgment thereafter rendered. ’ ’ Also, in Huddleston & Taylor v. Coffman, 90 Ark. 219, 118 S. W. 1010, we said: “The order of the county court, if improperly made, amounted to an illegal exaction, and Coffman, being individually interested in the order, had the right of appeal. This seems to us to be the plain and natural construction of these clauses of the Constitution (Sec. 33, Art. 7 & Sec. 13, Art. 16). To hold otherwise would be to place the interested parties at the mercy of the county court, and might have the effect of imposing a grievous burden upon them without any right whatever of appeal.”

We hold that when Garner filed his petition in the county court to intervene and became a party to the litigation, from that time he was a party and stood in the shoes of an aggrieved party to the action, and had the right to appeal from the county court’s ruling at any time within six months (from March 18, 1957) which he did. But, says appellees: “The circuit court’s order of dismissal dated August 28, 1957, was res judicata or law of the case with respect to the circuit court’s order of dismissal dated November 7,1957, and appellant’s failure to prosecute an appeal from the first order of dismissal by the circuit court constitutes a complete bar to this appeal.”

We do not agree, for the reason that on the date (August 28, 1957) that the order of dismissal was made by the circuit court Garner was not then a party to the action, and that judgment could therefore have no effect on his rights. “. . . the doctrine of res judicata is that an existing final judgment rendered upon the merits, without fraud or collusion, by a court of competent jurisdiction, is conclusive of rights, questions, and facts in issue, as to the parties and their privies, in all other actions in the same or any other judicial tribunal of concurrent jurisdiction.” Csrrigan v. Carrigan, 218 Ark. 398, 236 S. W. 2d 579.

Accordingly, the judgment is reversed and the cause remanded for further proceedings consistent with this opinion.

Mr. Chief Justice Harris dissents. Mr. Justice McFaddin not participating.

Carleton Harris,

Chief Justice (Dissenting). The holding of the majority is apparently based upon the action of appellant in filing his petition in the county court to intervene and become a party to the litigation on August 31,1957. This action was taken by Garner after the circuit court had dismissed his first appeal, and following the refusal of the county court to permit the intervention, a second appeal was taken to the circuit court. The majority treat the first appeal as absolutely of no effect, exactly the same as though no steps had ever been taken by Garner until he filed his request to intervene on August 31. Since his appeal from the refusal of the county court to permit the intervention occurred within six months from the time the order establishing the road was granted (March 18, 1957), the majority say the appeal was perfected in time.

Arkansas Statutes (1947) Annotated provide two methods of appeal from county courts. If the establishment of a road under Sec. 76-917 is sought, appeals are granted under the general act, Sec. 27-2001, which grants six months for an appeal from any final order of the judgment of the county court. If the establishment of a county road is otherwise sought, the appeal is governed by Sec. 76-915. This act provides:

“An appeal from the final decision of the county court for a new county road, or for vacating, altering or reviewing any county road, shall be allowed to the circuit court. Provided, that notice of such appeal be given by the appellant or appellants during the same term of the county court at which said decision was made; and the appellant shall, within ten (10) days thereafter, enter into bond, with good and sufficient security, to be approved by the clerk of the county court, for the payment of all costs and expenses arising from such appeal * * * ’ ’

The primary basis for this dissent is my complete accord with the trial court’s reasons for dismissing the second appeal, vie, an intervention could not be filed, nor appeal taken, after the lapse of the County Court term. But I am also of the opinion that the dismissal of the first appeal should have terminated the litigation. If the section, quoted above, governed, the appeal was certainly properly dismissed. If, on the other hand it was contended that the appeal procedures provided by Sec. 27-2001 should apply, then appellant should have prosecuted an appeal from the adverse decision of the circuit court to this court. It would therefore appear to me that when the circuit court dismissed appellant’s first appeal, and no further appeal was taken to this Court, the matter became res judicata. The first appeal was dismissed by the circuit court on August 29,1957, in the following language:

“For and in consideration of the petition, the argument of counsel and other matters and things before the Court the Court doth find: That the appeal should be dismissed. It is therefore by the Court considered, ordered and adjudged that the appeal of the appellant, Earl Garner, be and the same is hereby dismissed.”

Appellant apparently treated the action of the circuit court as an order to remand, and started all over again. Of course, the circuit court tries appeals from the county court de novo.

Appellant, in his brief, cites what he considers to be an analogous situation:

“Let us assume that a litigant in the local municipal court appeals his case to the circuit court and inadvertently fails to file and include in the transcript an affidavit for appeal. Of course, such an action would be subject to dismissal, and if the action is dismissed, and the litigant files the proper affidavit and prosecutes another appeal within the 30 days allowed by law, can it be said that the case has been adjudicated? ’ ’

The majority apparently answer this question, “No.” My answer is, “Yes.” I will agree that if one improperly lodged an appeal (as cited in his example) that he could go back and properly perfect same at any time within the time allowed for appeal, and before the appellate court acted upon such appeal. In the example cited by appellant, my conclusion is that upon dismissal of the appeal, the judgment of the lower court would then be enforced. No second appeal would lie in that particular litigation. Let ' us use another example. Suppose a case is appealed to this Court. Appellant has 90 days within which to lodge his record. However, the case is submitted long before such period of time has expired. Inadvertently, appellant has failed to designate his principal exhibit as a part of the record, though such exhibit is the principal evidence upon which he expects to prevail, and which, though not designated, may actually appear in the transcript. The Court renders a decision for appellee before the expiration of the 90 days from the time the lower court’s judgment was entered. Certainly, appellant cannot go back, designate tbe exhibit, and bring tbe matter back to tbis Court. I will go even further. Jones loses a ease in lower court. His counsel immediately advises successful counsel that be is appealing the case to tbis Court, and tbe latter, in bis thinking, considers tbe case as being appealed, and accordingly overlooks tbe fact that be never receives a notice of appeal from tbe clerk. Tbe facts are stipulated and tbe transcript prepared within a few days. Tbe briefs are short and tbe case is submitted. Inadvertently, appellant bad failed to file bis notice of appeal with tbe clerk of tbe lower court, a fact not noticed by appellee until shortly before preparing bis brief. Upon filing same, appellee’s first request is that tbe appeal be dismissed because of failure to file notice of appeal. The court would, of course, dismiss tbe appeal. All of tbis occurs before tbe expiration of 30 days from tbe time tbe lower court’s judgment was entered (not a likely occurrence, but possible). Can appellant then go back, file bis notice of appeal and proceed to bring tbe matter back to tbis Court? Tbe question has never been answered, and I accordingly leave it unanswered, though it is obvious as to what my personal opinion may be.

Appellant does not even argue that tbe first circuit court judgment dismissing tbe appeal was void. If not void ... it was binding. Accordingly, in my opinion, when tbe court dismissed such appeal on August 29th, and appellant neither moved tbe circuit court to set aside its judgment, nor further appealed, the doctrine of res judicata applied, and tbis would be true whether tbe appeal was properly or improperly lodged.

I therefore respectfully dissent to the opinion of tbe majority.

       Appellant states that the court cannot properly consider this argument because the lower court held contrary to this contention at the time of dismissing the second appeal. There, of course, was no occasion for appellees to cross appeal the res judicata finding since they prevailed in the law suit.


author: Ed. F. McFaddin, Associate Justice.

text:
    Benton v. U. S. Manganese Corporation.
    5-1561
    313 S. W. 2d 839
    Opinion delivered June 9, 1958.
    [Rehearing denied July 1, 1958.]

      Hale Brown, Kirkwood, Mo., and Charles F. Cole, for appellant.

      Murphy & Arnold, for appellee.
   Ed. F. McFaddin, Associate Justice.

This appeal poses the problem of determining the rights, duties, and liabilities of the owners of the mineral estate as related to the owner of the surface estate. It also requires consideration of the wording in the instrument which separated the full fee estate into the two estates of mineral and surface.

Two tracts of land are involved and each has a separate line of title. In Tract No. 1 (NW>4 SE14 Sec. 3) tlie mineral and surface title were separated by an instrument in 1853 and liave never been merged. But no mining lias been done on Tract No. 1 and it is not shown that any will be done. Since this is not a suit for declaratory judgment but a suit for injunction, we dismiss Tract No. 1 from this litigation, but without prejudice to any proceeding should mining be attempted on it.

In Tract No. 2 (NE*4 SE14 Sec. 3 and East Half of Lot 1 of NW14, Sec. 3) there was a united fee title until October 17, 1927, when George Tenney conveyed the minerals to American Manganese Company, and the deed was duly recorded. The mineral interests of the American Manganese Company passed by mesne conveyances to the appellee, U. S. Manganese Corporation, which acquired title in 1956. Tenney continued to own the surface estate from 1927 to 1948 when he conveyed the surface estate to appellant, Clarence O. Benton, by deed which described the conveyed property as:

“The agriculture or surface right to the East Half of Lot One (E%) of the Northwest Quarter (NW14) of Section Three, . . . and the Northeast Quarter (NE14) of the Southeast Quarter (SE%) of Section Three . . .”

Sometime in 1956 the appellee, U. S. Manganese Corporation, as the owner of the minerals, undertook to remove the manganese deposits from the lands last described. It was thoroughly established that such removal could be done only by open pit mining, or strip mining: that is, the removal of the topsoil to a depth of about 20 or 25 feet by bulldozer or other soil moving machinery, and then the removal of the manganese throughout the entire vein. The result of such operations was to put a tremendous overburden on part of the land and to leave deep holes or trenches in the mined portion of the land. Furthermore, appellee will, later, take the overburden soil to some- washing plant to fully retrieve any particles of manganese therein. The practical result of all of these operations is to leave the surface owner with only a “hole in the ground” for his agricultural purposes.

In 1956, when mining commenced on the lands in Tract No. 2, appellee entered into an agreement with Clarence O. Benton whereby he had charge of the bulldozing operations and the removal of the manganese; and for such work, Benton received a stated sum per ton for the manganese ore removed from the lands. The amount that Benton received was deemed sufficient by him to justify the destruction of his surface, so no complaint was registered. Eventually the appellee decided to make other arrangements for its operations, and dispensed with Benton’s services. Thereupon, Benton took steps to prevent the appellee and its employees from entering upon the said lands. Then, appellee filed this suit to enjoin Benton from interfering with appellee’s entry on the lands for the purpose of mining operations. Benton defended the injunction suit by claiming that the complete destruction of the surface estate by the appellee’s operations would constitute an illegal invasion of the agricultural or surface rights. Trial resulted in a decree permanently enjoining Benton et al. from interfering with the appellee’s mining operations; and this appeal ensued.

We thus have for consideration the relative rights, duties, and liabilities of the owner of the mineral estate as related to the owner of the surface estate, and the consideration of the wording which divided the full fee estate into the two estates of mineral and surface. It was contemplated by the conveyance of the mineral estate (the words of conveyance being heretofore copied) that the owner of the mineral estate would have “the right to mine, excavate, and prospect for minerals and ore,” and that the owner of the surface estate would keep the owner of the mineral estate harmless “from liability on account of accident or death to stock of any kind, which might be injured by falling into pits, excavations, etc., on said lands made by grantees or its assigns in mining and prospecting on said property, . . .” Thus it is clear that the opening of pits was contemplated by the conveyance of the minerals and the owner of the surface estate took with notice of such conveyance.

We entertain no doubt that the owner of the mineral estate has the right to dig pits for the removal of the minerals. But, here, the digging of the pits results in the complete destruction of the surface, and the removal of the surface to washing plants leaves the surface owner with nothing but a “hole in the ground” for his agricultural pursuits. The question is whether the owner of the mineral estate is liable for damages for such complete destruction of the surface.

The Court was correct in enjoining the owner of the surface estate from interfering with the owner of the mineral estate; but the Court should have retained jurisdiction to assess the damages which the owner of the surface' estate should recover for such complete destruction of the surface estate. In Carson v. Mo. Pac. RR. Co., 212 Ark. 963, 209 S. W. 2d 97, 1 A. L. R. 2d 784, we were concerned with the mining of bauxite; and Justice Robins, speaking for this Court, said:

“Generally, the operation of mining bauxite is not a subterranean one, but is accomplished by digging of open pits. Sovereign Camp Woodmen of the World v. Arthur, 144 Ark. 114, 222 S. W. 729. Manifestly, such an operation would destroy the value of the land for farming purposes, or any other purpose. To give the contract between appellant and the railroad company the construction asked by appellee we must hold that Carson and the railroad company entered into a contract in 1892, by which the railroad company would have had the right (assuming that the bauxite was to be removed by the open pit method), the day after Carson paid for his farm home, to enter upon it and utterly destroy its value without liability upon the part of the railroad company for damages. Such a construction, under the situation of the parties shown here, would be an extremely unreasonable one. A reservation as broad as the grant is ordinarily void. 26 C. J. S. Deeds, p. 447, § 139.”

In the case at bar, to deprive the appellants — the owners of the surface estate — of any right for damages for the complete destruction of the surface would be to make the conveyance of the surface as a mere nullity. In Western Coal & Mining Co. v. Young, 188 Ark. 191, 65 S. W. 2d 1074, the mining had been done by subterranean tunnels and pillars of coal had been left to support the surface. Later the mineral owner removed the pillars of coal and the surface subsided. The surface owner brought suit for damages which were recovered in the lower Court. In affirming the recovery for damages, this Court said:

“Appellant also contends for a reversal of the judgments because, under the lease from Denning, it had the right to mine and remove the coal without reference to damage it might do to the surface of the lands above. It is true the lease placed no restrictions upon it with reference to damaging the surface in minimi and moving the coal thereunder, and it is also true, as suggested by learned counsel for appellant, that there is no statute in this State requiring the owner of coal interests in lands to leave pillars to support the surface; but, notwithstanding, we are of the opinion that the only true and sound rule is that ‘when the surface of land is owned by one person and the minerals beneath are owned by another, the owner of the minerals cannot remove them without leaving sufficient natural or artificial support to sustain the surface. ’ Such was the rule announced in the case of Western Indiana Coal Co. v. Brown, 36 Ind. App. 44, 74 N. E. 1027, 114 Am. St. Rep. 367. See also Williams v. Hay, 120 Pa. 485, 14 Atl. 379, 6 Am. St. Rep. 719; Noonan v. Pardee, 200 Pa. 474, 50 Atl. 255, 55 L. R. A. 410, 86 Am. St. Rep. 722; West Pratt Coal Co. v. Dorman, 161 Ala. 289, 49 So. 849, 23 L. R. A. (N. S.) 805, 135 Am. St. Rep. 127, 18 Ann. Cas. 750, and cases therein cited: Kistler v. Thompson, 158 Pa. 139, 27 Atl. 874; Earnest v. Corona Coal Company, 212 Ala. 303, 102 So. 445; 1 R. C. L. 395.”

While the Western Mining- case was not a case of open pit mining, it was nevertheless a case of damage caused by destruction of the surface and points to the reason for our present holding. The Western Mining case prevents us from following the Kentucky cases like Buchanan v. Watson, 290 S. W. 2d 40, and the Pennsylvania cases like Commonwealth v. Fisher, 72 Atl. 2d 568. In defending against the injunction, Benton filed a cross-complaint for damage to the land, alleging that the ‘ ‘ estate in said lands will be entirely destroyed and of no value.” The prayer of the complaint was “for all other relief.” We hold that the Trial Court was correct in granting the injunction to prevent Benton from interfering with the appellee in mining the lands; but we hold that the cause should be remanded to the Trial Court in order to assess and award damages to Benton for the complete destruction of the surface shown in this case. It is so ordered.

       The following is the language in the conveyance: “Grant, bargain, sell and quit-claim unto the said American Manganese Company and unto its successors and assigns forever, all minerals of any and every kind, mineral rights and mining rights, together with the right to mine, excavate and prospect for minerals and ore, to use and build necessary roads, tram roads, to use water, and with full power of ingress and egress on, over and across said lands for said purposes . .. And grantors herein, their heirs and assigns, hereby agree as part of the consideration of this conveyance to hold Grantee, its successors and assigns harmless from liability on account of accident or death to stock of any kind, which might be injured by falling into pits, excavations, etc., on said lands made by grantees or its assigns in mining and prospecting on said property, and further agree that grantor, ox his assigns, shall pay all taxes assessed against said property in which he owns the surface rights, so long as the surface and mineral rights remain unsevered on the tax books, and shall not permit same to become delinquent for nonpayment of taxes . . .”

       The appellants are Clarence O. Benton, Mrs. Lanelle Benton, his wife, and Mrs. W. C. Benton, his mother. Agricultural and surface rights to Tract No. 2 are owned by Clarence O. Benton. His mother owns with him the agricultural and surface righ+s in Tract No. 1. We speak of the appellants as “Benton” since Clarence O. Benton is the active party.

       Open pit mining is discussed in 36 Am. Jur., “Mines and Minerals” § 174 et seq.


author: Minor W. Millwee, Associate Justice.

text:
    St. Paul-Mercury Indemnity Co. v. Taylor, Judge.
    5-1614
    313 S. W. 2d 799
    Opinion delivered June 9, 1958.

      Norton é Norton by Robert R. Wright, for petitioner.

      Knox Kinney, for respondent.
   Minor W. Millwee, Associate Justice.

Petitioner, St. Paul-Mercury Indemnity Company, seeks a writ prohibiting the judge of the Circuit Court of St. Francis County, Arkansas, from proceeding further in a certain action pending in that court, “due to the attainment and legal retention of jurisdiction by the Chancery Court of St. Francis County, Arkansas, in this case, and due to the irreparable harm which will be caused petitioner by the wrongful continuation and trial of said cause in the Circuit Court of St. Francis County, Arkansas.”

According to the petition and the response thereto, St. Francis County owned a truck which was insured by petitioner and damaged in a collision while it was under a loan to and being used by the City of Hughes, Arkansas. Petitioner paid the amount of the damages to St. Francis County resulting from- the collision less $100.00 deductible as provided in tbe policy of insurance.

On August 28, 1956, counsel for petitioner filed an action in tbe St. Francis Circuit Court in tbe name of tbe county against tbe City of Hughes for tbe damages sustained to tbe truck under its right of subrogation under tbe policy. On September 26, 1956 County Judge M. D. Clark made a notation of dismissal on tbe docket sheet which tbe circuit judge determined bad tbe effect of dismissing tbe cause without prejudice. There was no appeal from an order to that effect entered on October 5, 1956.

On October 20, 1956 petitioner filed suit in tbe St. Francis Chancery Court in its own name against tbe City of Hughes and St. Francis County for tbe amount of its subrogation only. Subsequently petitioner filed an amendment to its complaint in tbe name of tbe county to also recover tbe $100.00 deductible claim alleged to be still due tbe county. Tbe county filed a motion to dismiss tbe amendment on May 30, 1957, alleging a prior release by it to tbe city of any claim as to tbe $100.00 deductible portion of tbe loss. After a bearing on June 20, 1957, tbe Chancery Court dismissed tbe action with prejudice as to any damages sustained by the county in excess of the amount of tbe subrogation paid by petitioner, directed that tbe county remain a party plaintiff and restrained tbe county judge from interfering in any manner with tbe prosecution by petitioner of its cause of action for tbe amount of its subrogation. A motion of tbe City of Hughes to transfer tbe case to law previously filed and submitted on briefs was beard by tbe chancellor who entered an order on November 7, 1957, transferring tbe case to the St. Francis Circuit Court. Tbe clerk of this court refused to docket petitioner’s appeal from this order on tbe ground that it was not final and appealable. We sustained tbe clerk’s action by denial of petitioner’s motion for a rule on tbe clerk on April 7, 1958.

Petitioner’s motion to transfer the canse back to chancery court was also denied by the St. Francis Circuit on February 7,1958, the court holding that the county was not a necessary party to petitioner’s action against the City of Hughes for the amount of its subrogation which involved only an action for damages properly triable in the circuit court. Petitioner then filed the instant application for a writ of prohibition on March 19, 1958, asserting the circuit court was without jurisdiction because the chancery court had already obtained jurisdiction and that its attempt to evade further exercise of such jurisdiction by transferring the case to law was erroneous, without authority and void.

In support of the petition it is first contended that the transfer of the case by the chancery court to circuit court was erroneous and improper; and that that chancery court, having acquired and exercised jurisdiction of the cause of action for one purpose, should have retained it for all purposes. We find it unnecessary to determine such contentions on this application for a writ of prohibition, though we have already sustained the prior decision of our clerk that a similar order was not final and appealable. Even if the chancellor’s action in refusing to exercise and retain jurisdiction were erroneous, we are unwilling to say that petitioner’s remedy by appeal is inadequate, or that it has no other protection against the wrong that would be done by a refusal to exercise such jurisdiction.

It is well settled by our cases that prohibition may not be used as a substitute for an adequate remedy by appeal. In this connection we have held that the remedy for refusal to transfer an action to equity is by appeal and not by prohibition under a situation quite similar to that presented here. In Richards v. Maner, Judge, 219 Ark. 112, 240 S. W. 2d 6, a suit brought at law was first transferred to equity and then retransferred to law when the petitioner applied for a writ of prohibition. In denying the writ we distinguished the factual situation from that in Burton v. Ward, 218 Ark. 253, 236 S. W. 2d 65, where each trial court refused to try the case, insisting that the other had jurisdiction. In the Richards case we said: “Here the trial courts are in agreement. The chancellor has sent the case back to the circuit court, and that court proposes to proceed with the trial. Unlike the situation in the Burton case these petitioners are afforded the opportunity of a trial, but they insist that the hearing should be in chancery. It is settled, however, that the remedy for a refusal to transfer an action to equity is by appeal, not by prohibition. Dunbar v. Bourland, 88 Ark. 153, 114 S. W. 467. As we said in Bassett v. Bourland, 175 Ark. 271, 299 S. W. 13: ‘The writ is never issued to prohibit an inferior court from erroneously exercising its jurisdiction, but only where the inferior tribunal is wholly without jurisdiction, or is proposing or threatening to act in excess of its jurisdiction. To illustrate: The circuit judge certainly had jurisdiction to pass upon the motion to transfer to equity the case pending in its court. If it erroneously transferred the case to equity, prohibition is not the remedy. It can be corrected only on appeal.’ We then went on to point out that the party objecting to the transfer should have saved his objection and preserved his point for consideration by this court on appeal from the trial court’s final judgment.” See also, Weaver v. Leatherman, 66 Ark. 211, 49 S. W. 977.

So here, the trial courts are in agreement, and the circuit court had jurisdiction to pass on the motion to retransfer to equity. If it acted erroneously the petitioner’s remedy is by appeal when the matter proceeds to a final judgment, and prohibition is not the remedy. The case of Askew v. Murdock Acceptance Corporation, 225 Ark. 68, 279 S. W. 2d 557, relied on by petitioner, involved an appeal and not an application for a writ of prohibition.

What we have said concerning petitioner’s first point is applicable to its second contention that circuit court is without jurisdiction to proceed in the case because the chancery court acquired and exercised jurisdiction before it transferred the case to circuit court. As the respondent points out: “A settlement by the insured for the amount of the loss in excess of the insurance only, with a tort-feasor who is liable for the loss, since it is a settlement for the part of the eause of action which remains in the insured and which he has a right to settle, does not affect the insurer’s right of action against the tort-feasor.” 29 Am. Jur., Insurance, Sec. 1345. We do not understand petitioner to contend that the insured county had no right to settle with the alleged tort-feasor city for that part of the loss in excess of the insurance. Such settlement in no manner precludes petitioner from pursuing its action for damages against the city to the extent of its subrogation.

Jurisdiction of this action as well as the authority to pass ■ on the motion to retransfer to chancery court was a matter properly within the jurisdiction of the St. Francis Circuit Court. On the record presented, we cannot say that petitioner’s remedy by appeal from a final judgment that may be rendered in the circuit court action is inadequate, or that irreparable harm to it will necessarily result from an adjudication of the matter there.

The writ is accordingly denied.


text:
    Gusewelle v. Gusewelle.
    5-1601
    313 S. W. 2d 838
    Opinion delivered June 9, 1958.

      8. Hubert Mayes, for appellant.

      E. M. Arnold, for appellee.
   George Rose Smith, J.

This appeal is from a decree by which the appellee was granted a reduction in .the amount of alimony that he is required to pay the appellant. It is contended by the appellant that the proof fails to show a sufficient change of circumstances to warrant the reduction and, further, that the chancellor erred in refusing to allow the appellant her costs and an attorney’s fee.

After having been married for about thirty years the parties were divorced by a decree entered as of October 5, 1953. Gusewelle was then, and still is, the manager of a retail store in Little Rock, earning a salary of $10,000 a year and an annual bonus, based upon the profits of the store, that ordinarily comes to between fifteen and twenty thousand dollars. The original decree awarded to Mrs. Gusewelle the possession of the family home, title to the furniture and household goods, and one third of her husband’s other personal property. In addition to fixed alimony of $250 a month Mrs. Gusewelle was awarded a third of her husband’s annual bonuses, before the deduction of taxes but subject to the contribution that Gusewelle is required to make to his employer’s retirement pension plan. The only change effected by the present decree is that Mrs. Gusewelle’s share in the bonuses is to be computed after the deduction of taxes. This modification amounts to a reduction of about $100 a month.

We are of the opinion that the proof supports the chancellor’s decision to modify the original award. It is shown that the appellee’s employer, a corporation operating a chain of retail stores, expects its local managers to take an active part in community affairs and to entertain extensively at their own expense. In this connection Gusewelle testified that at the time of divorce he was living in a hotel room, at a rental of $90 a month, hut to meet his employer’s requirements he deemed it necessary to occupy an apartment costing about $200 a month. There is no reason to doubt the fact that the appellee’s income, which depends in part upon the profits of the store that he. manages, is at least indirectly affected by the standard of living that he maintains.

Another change of circumstance that we regard as important is the appellee’s remarriage. The cases on this point were recently reviewed in McCutcheon v. McCutcheon, 226 Ark. 276, 289 S. W. 2d 521, where we said that the husband’s remarriage is a matter that may be considered in weighing the equities of the situation. The case at bar is an instance in which this factor cannot fairly be disregarded. Gusewelle’s net income, after the deduction of taxes and his contribution to the pension plan, averages about $18,000 a year. Under the original decree his first wife received almost $8,000 of that income, upon which her federal and state income taxes were more than $1,000. What was left for the appellant’s use was substantially more than her actual needs, as she lives alone, in the former family home, without dependents. It is not indicated that the reduction allowed by the chancellor will work any hardship upon the appellant; at most it will diminish the amount that she is able to put aside as savings. In view of these facts we are not convinced that the chancellor’s modification of the original award is without justification. See Boniface v. Boniface, 179 Ark. 738, 17 S. W. 2d 897. By cross appeal the appellee urges us to reduce the allowance even more, but the evidence does not warrant the granting of this request. If the apportionment of the appellee’s income can be considered to be inequitable even after the readjustment put into effect by the chancellor, this condition is due to the original decree rather than to any change that has taken place since then.

With respect to the claim for attorney’s fees, the allowance is within the court’s discretion, even though the governing statute does not refer specifically to a proceeding in which the husband asks for a reduction in alimony. Cf. Feazell v. Feazell, 225 Ark. 611, 284 S. W. 2d 117; Finkbeiner v. Finkbeiner, 226 Ark. 165, 288 S. W. 2d 586. In this case we have concluded that the appellee should contribute $250 toward the payment of the fee for the appellant’s attorney and that the appellant should be permitted to recover her costs. With this modification the decree is affirmed.