author: Frank Holt, Justice. John I. Purtle, Justice,

text:
    Ellen R. FINDLEY, Administratrix of the Estate of Delores A. WOLFE, Deceased v. TIME INSURANCE COMPANY
    80-67
    599 S.W. 2d 736
    Supreme Court of Arkansas
    Opinion delivered June 16, 1980

      Spears, Sloan & Johnson, by: James A. Johnson, for appellant.

      Rieves, Rieves & Shelton, for appellee.
   Frank Holt, Justice.

The appellee issued an insurance policy providing major medical coverage to Delores A. Wolfe effective April 23, 1975, the date of the application. No physical examination was required. On July 9, 1975, Mrs. Wolfe consulted a doctor and was shortly thereafter diagnosed as having cancer of the cervix. When the appellee refused payment on expenses submitted by Mrs. Wolfe for extensive hospitalization and medical treatment in connection with the cancer, she instituted this suit. The appellee pleaded an affirmative defense pursuant to Ark. Stat. Ann. § 66-3208 (c) (Repl. 1966), primarily asserting that Mrs. Wolfe was experiencing abnormal vaginal bleeding prior to her application and, therefore, she had given a false answer to the following question on the insurance application:

To the best of your knowledge and belief have you or any dependents listed: . . .
Had a female disorder or any menstrual irregularity?
No.

The appellee also avers that this answer was material to its acceptance of the risk and that if Mrs. Wolfe had answered it truthfully, the policy would not have been issued to her. Mrs. Wolfe died during the pendency of this action which was revived in the name of her administratrix, the appellant.

A jury returned a verdict for the appellant in the amount of $11,815.49, the amount of medical expenses stipulated by the parties. The court, after finding the answer as to menstrual irregularity incorrect and the insurer would not have issued the policy had the true facts been known, entered a judgment n.o.v. in favor of the appellee. Hence this appeal.

The appellant first contends that the trial court erred in entering the judgment n.o.v. as there was substantial evidence to support the jury verdict. A judgment n.o.v. is proper where there is no substantial evidence to support- the jury verdict, and one party is entitled to a judgment as a matter of law. Westside Motors v. Curtis, 256 Ark. 237, 506 S.W. 2d 563 (1974); and Spink v. Mourton, 235 Ark. 919, 362 S.W. 2d 665 (1962). On appeal we review the evidence and all reasonable inferences deducible therefrom in the light most favorable to the party against whom the judgment n.o.v. is rendered. Westside Motors v. Curtis, supra. The substantiality of evidence is a question of law. Pickens-Bond Construction Co. et al v. Case, 266 Ark. 323, 584 S.W. 2d 21 (1979). There we recognized:

Substantial evidence has been defined as ‘evidence that is of sufficient force and character that it will, with reasonable and material certainty and precision, compel a conclusion one way or the other. It must force or induce the mind to pass beyond a suspicion or conjecture.’ Ford on Evidence, Vol. 4 § 549, page 2760. Substantial evidence has also been defined as ‘evidence furnishing a substantial basis of fact from which the fact in issue can reasonably be inferred; and the test is not satisfied by evidence which merely creates a suspicion or which amounts to no more than a scintilla or which gives equal support to inconsistent inferences.’

See also Ark. S&L Bd. v. Central Ark. S&L, 260 Ark. 58, 538 S.W. 2d 505 (1976).

In support of appellant’s argument of substantial evidence to support the jury verdict, she recites Mrs. Wolfe’s perfect work record before the application; she had worked the regular 40 hours per week until July 9, almost two and one-half months after the application was completed; she had not consulted a doctor for more than 11 years prior to the July 9th appointment; the testimony of two doctors to the effect that it is impossible to determine when the cancer was first present; menopause, which Mrs. Wolfe believed she was experiencing, is a normal episode for women; she first noticed symptoms of illness, excessive or almost daily vaginal bleeding and irregular menstrual periods, in mid-June or about two weeks before making a doctor’s appointment at the suggestion of her employer; she thought any bleeding was associated with menopause. She had no illness of any kind to her knowledge and considered herself in good health at the time the application was completed. Therefore, it is asserted, she was not experiencing any menstrual irregularity on April 23 and answered the question truthfully.

However, she further stated in her deposition that she told her doctor on July 9 that she had been bleeding vaginally almost every day for the past two months. She didn’t know exactly what day it started. This doctor testified that, although his records were unclear, she told him that for two and one-half months she had been experiencing either hot flashes, cramps, or bleeding. Her normal menstrual cycle was five or six days every 28 days. Another physician testified that she told him she had a one year history of heavy vaginal bleeding with a frequency of every two weeks, and she had noted a change in her menstrual cycle one year prior to her admission to the hospital. Mrs. Wolfe did not deny or recall making this statement or that she stated to him a history of gradual progressive vaginal bleeding. She did recall telling this doctor at the . hospital, where she was admitted for treatment in August, 1975, that she had experienced heavy vaginal bleeding every two weeks starting in April of 1975. She then verified that she, first noticed the heavy bleeding around the first of April, 1975, and it was the same type of menstrual period that she was having prior to that.

The issue presented is whether the female disorder or menstrual irregularity manifested itself to her knowledge nad belief before or after the application. It is not whether she was in good health when she made the application. When we reyiew the appellant’s evidence most favorably to her, as we must do on appeal, we cannot reasonably and confidently infer from its inconsistencies and uncertainties that there is substantial evidence to support the jury’s verdict.

Appellant next contends the appellee failed to establish that the false answer on the application was material to the placement of the coverage or that the appellee was prejudiced thereby. It is argued that permitting the underwriter for the appellee to answer a hypothetical, cumulative question was improper, and prejudicial. Suffice it to say that the underwriter specifically testified without contradiction that the policy would not have been issued had the true facts been revealed.

Affirmed.

Purtle and Stroud, JJ., dissent.

John I. Purtle, Justice,

dissenting. I cannot agree with the majority in this case. The case turns on one answer. The question is:

To the best of your knowledge and belief have you . . . had a female disorder or any menstrual irregularity?

The answer was in the negative.

The appellant testified she thought she was going through menopause, and in such cases she thought it was normal for the menstrual period to be irregular. I cannot say as a matter of law it was not her belief that this was a normal or natural occurrence. After all, she had not seen a doctor in more than 11 years prior to the time she applied for this insurance policy. She continued to work full time for several months after the policy was issued before she consulted a doctor. There is nothing in this case to persuade me that the appellant did not actually believe her health was normal at the time she answered the critical question.

Her confusing response to the questions came many months later when she was ill and was on her death bed. She weighed approximately 57 pounds and was taking medication at the time her deposition was taken. Certainly, there was reason for her to be confused about questions propounded to her by experienced counsel.

Another reason I dissent is because the trial court allowed the jury to decide the question. After the jury found in favor of the appellant, the court set the verdict aside. If there was enough evidence to go to the jury, there was enough evidence to support the verdict. Nothing changed the evidence between the submission of the case to the jury and the setting aside of the verdict. Had the jury decided the other way, I would have been agreeable to affirming the verdict.

I am authorized to state that Stroud, J., joins me in this dissent.


source: Caselaw Access Project

author: Frank Holt, Justice.

license: Public Domain

text:
    Thane G. ALLEY, Guardian of the Person and Estate of Cyrus JOHNSON v. Raboo RODGERS and Henry MORGAN
    80-71
    599 S.W. 2d 739
    Supreme Court of Arkansas
    Opinion delivered June 16, 1980

      Arnold & Demott, by: Steve Demott, for appellant.

      Janice 0. Williams, for appellees.
   Frank Holt, Justice.

Cyrus Johnson, now deceased, agreed to purchase three mobile homes from appellees. The contract provided that the purchase price of $9,500 would be paid as follows:

Two Thousand Dollars ($2,000.00) down payment, and balance of Seven Thousand Five Hundred Dollars ($7,500.00), due within 60 days of the execution of this contract; . . .
[Cyrus Johnson] agrees that down payment is to be considered as earnest money and liquidated damages should [Cyrus Johnson] not complete the terms of the contract;

A few days after the contract was executed, Johnson advised the appellees that he would be unable to complete the purchase. Subsequently his $2,000 check was returned because of insufficient funds. Thereupon the appellees filed this action for $2,000 liquidated damages as provided in the contract. The appellant, who was appointed guardian of the person and estate of Johnson about ten days after the contract was executed, filed an answer denying the allegations and pled the affirmative defense that Johnson was incompetent at the time of execution. The court, sitting as a jury, found for the appellees and awarded them $2,000 plus, interest and costs. Hence this appeal.

The appellant first asserts that the trial court erred in holding the liquidated damages clause valid. Appellant insists it constitutes a penalty and is, therefore, invalid. It is well settled that a contract will be construed as properly stipulating for liquidated damages where, from a prospective view of the contract, it appears (1) that the parties contemplated that damages would flow from a failure to perform the contract; (2) that such damages would be indeterminate or difficult to ascertain; and (3) that the sum bears some reasonable proportion to the damages which the parties contemplated might flow from a failure to perform the contract. Montague v. Robinson, 122 Ark. 163, 182 S.W. 558 (1916); Wait v. Stanton & Collamore, 104 Ark. 9, 147 S.W. 446 (1908); and Stilwell v. Paepcke-Leicht Lumber Co., 73 Ark. 432, 84 S.W. 483 (1905). In determining the proper interpretation of a provision for damages, we must “place ourselves in the position of the contracting parties and view the subject matter of their contract prospectively and not retrospectively.” Montague v. Robinson, supra. “This question is one generally somewhat difficult of solution, and there is no fixed rule by which all cases may be governed, as each case is established by its own particular facts.” Stillwell v. Paepcke-Leicht Lumber Co., supra.

Inasmuch as this case was tried before the court, sitting as a jury, after July 1, 1979, we will not set aside the court’s findings of fact unless they are clearly erroneous. Ark. Rules of Civ. Proc., Rule 52, and Taylor v. Richardson, 266 Ark. 447, 585 S.W. 2d 934 (1979). Although here the parties recognized that damages would flow from a breach of the contract, the appellant argues that the stipulated amount of the liquidated damages is unreasonable and constitutes a penalty. It appears that the amount of prospective damages would have been difficult to ascertain and is not unreasonably disproportionate to potential damages for breach of the contract. At the time the contract was executed, two of the three trailers were each rented for $140 per month. After Johnson agreed to the purchase, the renters, pursuant to notice, vacated the trailers. Advertisements were discontinued and prospective buyers told that the trailers were sold. It is true that the trailers were vacant only two or three weeks until a local person purchased them for $7,500. Even so, at the time of their contract, the parties could not estimate without some difficulty the potential loss of rental income. The trailers could possibly have remained vacant for several months, resulting in a considerable loss of rental income to the appellees. At a combined rental income of $280 per month, seven months’ vacancy would have resulted in an approximate loss of $2,000. Further, the fact that appellees were attempting to sell all of the trailers at the same time could very well reduce the number of potential buyers. In our view the court’s finding that the liquidated damages clause was valid is not clearly erroneous.

The appellant next contends the trial judge erred in not ruling that Johnson was incompetent to enter into the contract for the sale of the three trailers. Ten days after the contract was executed, the probate court appointed appellant guardian of the person and estate of Johnson. A probate court adjudication that one is incompetent is only prima facie evidence of insanity. See Dew v. Requa, 218 Ark. 911, 239 S.W. 2d 603 (1941). Here, other than this adjudication, the only evidence adduced by appellant as to Johnson’s mental incapacity on the date of the contract was a local physician’s testimony. This physician had submitted only a one sentence report -in the probate court proceeding; i.e., he did not feel Johnson was capable of handling his own personal affairs. After admitting that he had primarily treated Johnson for physical ailments and had never given him any psychological or mental tests, he felt Johnson was in a state of mental confusion and disoriented most of the time. He admitted, however, that he had not seen Johnson for approximately a month before Johnson signed the contract. He had never advised that he be placed in a nursing home,, and he could not say whether Johnson was disoriented, confused or incompetent on the date of the contract. The appellees testified that each of them had several conversations with Johnson concerning the sale of the trailers. After inspecting the trailers, Johnson read the contract in the presence of a business partner, asking several pertinent and reasonable questions before signing it. He remarked he was familiar with the terms of this contract since had had experience with “several deals like this.” He planned to move the trailers to a nearby lake and rent them.

We hold this evidence does not demonstrate that the trial court was clearly in error in not finding Johnson’s mental condition rendered him incapable of transacting the business in question; i.e., executing a contract.

Affirmed.


author: John I. Purtle, Justice.

text:
    Alma MINYARD v. DAKING MILL, INC.
    80-74
    599 S.W. 2d 742
    Supreme Court of Arkansas
    Opinion delivered June 16, 1980

      Pryor, Robinson, Taylor & Barry, for appellant.

      Jim D. Spears, for appellee.
   John I. Purtle, Justice.

The trial court directed a verdict for the appellee at the close of the appellant’s presentation in a suit for damages alleged to have been caused by appellee’s breach of an employment contract with appellant.

Appellant argues on appeal that the trial court erred in granting appellee’s motion for a directed verdict. We agree.

Appellant had been employed by appellee as secretary-treasurer for 24 years until May 12, 19J8, when the stockholders voted to accept her resignation. At the same meeting the stockholders passed a resolution directing the officers of the corporation to enter into an agreement with the appellant allowing her to continue on the payroll, at her present salary, for a period of 14 months. She was to perform only such services as might be required of her, and the president of the company complied with the resolution in the form of a letter dated May 24, 1978.

Appellant received her salary until August, 1978, at which time her employment was terminated with two weeks pay. She had registered for unemployment compensation shortly before May 12, 1978; but, upon being notified of her new contract, she withdrew her application for unemployment benefits. She also rejected a job offer because she wanted to be available for any duties required by appellee. In fact, she did on one occasion perform some services for the appellee before her termination on August 4, 1978. The appellant testified that she remained available to perform any services that might be requested by the appellee.

The appellant stated her employment was terminated because Mr. and Mrs. Cunningham (principal shareholders of the corporation) returned, and Mrs. Cunningham filled appellant’s position with the company.

There is no letter of resignation by appellant in the record. Obviously, she was notified her resignation would be accepted, and the stockholders (the Cunninghams) voted to accept her resignation and continue her salary for 14 months.

The only question here is whether there was sufficient evidence to go to the jury. In that regard the question boils down to whether or not there was consideration necessary to create a binding contract of employment.

The test on review in the matter of a directed verdict is to give the evidence of the losing party its strongest probative force in considering whether there is a question for the jury on the issue of facts. Harper v. Mo. Pac. Rd. C., 229 Ark. 348, 314 S.W. 2d 696 (1958). It is necessary that there be consideration in order to have a valid contract. Johnston v. Missouri Pacific Railroad Co., Thompson, Trustee, 203 Ark. 1036, 160 S.W. 2d 39 (1942). If there be no consideration there is no enforceable contract. Gatlin v. Goodgame, 209 Ark. 867, 192 S.W. 2d 878 (1946).

The stockholders voted to accept appellant’s resignation and to continue her employment'at the same meeting and as a part of the same transaction. By the terms of the resolution, the appellant was required to perform any services required by the appellee, and, in fact, she did on at least one occasion, go back and do some work. She also withdrew from the unemployment field, and rejected a job offer. Furthermore, she held herself ready to perform any services required by the appellee. The letter of August 4, .1978, specifically stated her employment was terminated as of the date of the letter.

We think the evidence above-stated is sufficient to present a question for the jury.

Reversed and remanded.


author: Richard L. Mays, Justice.

text:
    G. E. MASSENGALE et ux v. James R. JOHNSON et al
    79-312
    599 S.W. 2d 743
    Supreme Court of Arkansas
    Opinion delivered June 16, 1980

      Lanny K. Solloway, P.A., and Thomas D. Ledbetter, for Ledbetter & Associates, Ltd., for appellants.

      John W. Hockett, for appellees.
   Richard L. Mays, Justice.

After announcing judgment at conclusion of a trial on the merits of a suit brought by appellants for cancellation of a contract, the chancellor vacated the judgment and entered judgment for appellees following a hearing on an amended answer which raised additional defenses. For reversal on appeal, appellants’ sole contention is that the court abused its discretion. We disagree.

In August, 1970, appellants, G. E. and Berniece Massengale, entered into an escrow contract to sell their slaughter and meat processing business in Harrison, Arkansas to appellee, James and Virginia Johnson, for $48,000, $1,-880 payable the first year of the contract and the balance payable upon annual installments of $2,000. The contract also contained a provision allowing appellees to defer annual payments against certain expenditures for repairs and improvements until the end of the regular scheduled contract payments.

When appellants sued appellees in December, 1978, alleging breach and seeking cancellation of the contract, the chancellor found appellees to be in default, primarily relying on escrow account payment records which indicated that appellees had failed to make their principal payments in 1973, 1974 and 1977. Although the chancellor announced her judgment from the bench on February 8, 1979, she vacated the judgment on March 8, 1979, after an oral motion by appellees’ new counsel on February 15, which was later reduced to writing on February 22, requesting the court to hear additional evidence. Following a rehearing on April 5, 1979, after permitting appellees to amend their original answer to allege expenditures justifying non-payment of the annual installment in question and other matters which were not developed at the first trial, the chancellor reversed herself, finding that appellees were not in default.

It is a well settled principle that courts have control over their judgments during the term at which they are made, and, for sufficient cause, may, either upon application or upon their own motion, modify or set them aside. Wilkerson v. Johnston, 211 Ark. 170, 200 S.W. 2d 87 (1947). This power is inherent and plenary and exists without reference to any statute, Cowan v. Patrick, 247 Ark. 886, 448 S.W. 2d 336 (1969). It exists so that courts may review and correct any mistakes, errors or indiscretions which might have been committed during the term. Underwood v. Sledge, 27 Ark. 295 (1871). Although terms of court have been abolished in chancery, the law abolishing terms specifically provides that for 90 days chancellors have the same power to modify or vacate judgments that they would have had during the same term of court. Ark. Stat. Ann. § 22-406.4 (Suppl. 1979). The only limitation on the exercise of this power is addressed to the sound discretion of the court, which need not conform to statutes governing the vacation of judgments after the expiration of the term or 90 day period. See McDonald v. Olla State Bank, 192 Ark. 603, 93 S.W. 2d 325 (1936); also § 22-406.4 (Supp. 1979).

Although appellants do not attack the merits of the chancellor’s final judgment, they contend that the court abused its discretion by vacating its original judgment and allowing appellees to amend their answer and introduce new evidence. Other than a general reference to equity and justice, the chancellor did not expressly state the reasons for vacating the judgment but they may be inferred from the record. Although appellants alleged numerous violations of the contract, the chancellor expressly relied on appellee’s failure to make certain scheduled payments to find appellees in default. She apparently gave little consideration to the deferred payment provision of the contract, which permitted postponement of payments for certain repairs and improvements, even though there was some evidence that appellees had made repairs and improvements. Apparently recognizing that this issue had not been adequately explored and realizing its importance to the central issue of breach of contract, the court vacated the judgment to prevent a miscarriage of justice.

Appellants argue that the court should not have vacated the judgment' and taken additional evidence because appellees should have adequately developed the issues at the first trial and did not present a reason for not doing so which would have entitled them to relief. While we agree that the chancellor was not required to set the judgment aside and grant a new hearing, that in no way implies that the chancellor should be prohibited from doing so. Having reasonable cause to believe that the issue had been decided incorrectly, in part because of misplaced emphasis in the chancellor’s deliberation, the chancellor properly exercised her. discretion to reduce the possibility of error.

Appellant tries to make a separate issue of the chancellor’s decision to allow appellees to amend their answer after the first trial, but we have difficult separating the two issues since they both are addressed to the chancellor’s discretion and undergird her ultimate disposition of the issues. We have said many times that the question of allowing an amendment to pleadings during the course of a trial is addressed to the sound discretion of the trial court, whose actions will be sustained unless there has been a manifest abuse of discretion, materially prejudicing the complaining party. Burton v. Rice, 234 Ark. 354, 352 S.W. 2d 568 (1961); Butler v. Butler, 176 Ark. 126, 2 S.W. 2d 63 (1928). Appellants have not claimed prejudice and cannot claim surprise since they learned of the grounds of the amended answer when appellees initially asked the court to set the judgment aside and take additional evidence. Moreover, even if appellants could claim surprise, they should have moved for a continuance to minimize or. eliminate any possible prejudice. Again, it is not a question of appellees’ right to. amend their answer but the chancellor’s right to permit it. The two issues should not be confused. We discern no abuse of discretion.

Affirmed.


author: Richard L. Mays, Justice. John A. Fogleman, Chief Justice,

text:
    Robert Lee FAIRCHILD v. STATE of Arkansas
    CR 80-53
    600 S.W. 2d 16
    Supreme Court of Arkansas
    Opinion delivered June 16, 1980

      John W. Achor, Public Defender, by: James H. Phillips, Deputy Public Defender, for appellant.

      Steve Clark, Atty. Gen., by: Catherine Anderson, Asst. Atty. Gen., for appellee.
   Richard L. Mays, Justice.

Appellant, Robert Lee Fairchild, was convicted of aggravated robbery by a court sitting without a jury and sentenced to seven years imprisonment. The only question raised by appellant on appeal is whether the evidence was sufficient to sustain his conviction. Although we find sufficient evidence to support a conviction of robbery, we find insufficient evidence to sustain a conviction of aggravated robbery. We, therefore, modify the judgment below by reducing it to the lesser included offense of robbery and impose a sentence of three years imprisonment, that being the minimum prison sentence prescribed by law for a conviction of robbery.

The evidence indicates that on July 27, 1979, between 11:00 p.m. and midnight, appellant saw Mrs. Frances Calva, the prosecuting witness, near a double-door back entrance of the Checkmate Club in North Little Rock, rushed over and jerked the outer door open which she was holding and, with his right hand under his shirt, said, “Give me your money!” When Mrs. Calva denied that she had any money, appellant grabbed her dress lightly and insisted that she was lying. As she turned and tried to go in the inner back door, displaying only car keys in her hands, appellant retreated. He was later apprehended outside the club and taken to the police station for interrogation where he volunteered to a police officer that he had tried to induce Mrs. Calva to believe that he had a gun by holding his hand under his shirt.

A person commits robbery if with the purpose of committing a theft or resisting apprehension immediately thereafter, he employs or threatens to immediately employ physical force upon another. Ark. Stat. Ann. § 41-2103 (Repl. 1977). Physical force means any bodily impact, restraint, or confinement or the threat thereof. Ark. Stat. Ann. § 41-2101 (Repl. 1977). A person commits aggravated robbery if he commits robbery armed with a deadly weapon, or represents by word or conduct that he is so armed. Ark. Stat. Ann. § 41-2102 (Repl. 1977).

In reviewing the record of appellant’s conviction, we are obliged to view the evidence in the light most favorable to the state. Cary v. State, 259 Ark. 510, 534 S.W. 2d 230 (1976). Although appellant first contends that there was insufficient evidence to show that he employed physical force against Mrs. Calva, we find that jerking the door from her, cornering her in the back hallway and grabbing her dress is sufficient restraint and bodily impact to constitute physical force. Appellant’s next argument, however, that the evidence fails to establish that he represented by word or conduct that he was armed with a deadly weapon has merit. We are not persuaded that appellant’s hand under his shirt, even with the admitted intention of conveying to the victim that he was armed, is sufficient representation to satisfy the requirements of aggravated robbery in the absence of the victim’s appreciation that he was armed. It is clear from Mrs. Calvas testimony that she did not attach any special significance to this conduct and certainly did not perceive it to be in any way threatening. In fact, she did not even mention this particular conduct during her testimony until the prosecutor specially raised it by a leading question. Since the appellant’s subjective intent does not control what is objectively conveyed to another, a hand under a shirt has no meaning in the context of the aggravated robbery statute unless the victim at least perceives it to be menacing.

Affirmed as modified.

Fogleman, C.J., and Stroud, J., dissent.

John A. Fogleman, Chief Justice,

dissenting. I respectfully disagree with the majority. I would affirm the judgment. I submit that there is substantial evidence to support the trial judge’s finding of fact that Fairchild represented by conduct that he was armed with a deadly weapon. In making the determination we jnrust view the evidence in the light most favorable to the state. Chaviers v. State, 267 Ark. 6, 588 S.W. 2d 434 (1979); Thomas v. State, 266 Ark. 162, 583 S.W. 2d 32. We must draw from the testimony all reasonable inferences favorable to the trial court’s judgment. Core v. State, 265 Ark. 409, 578 S.W. 2d 581. We should not reverse the trial court’s fact-finding unless we find that a reasonable mind could not infer from the evidence that Fairchild’s conduct was a representation that he was armed with a deadly weapon. Core v. State, supra. I submit that this cannot be said.

Viewed in the light in which we must view it, the evidence showed:

Fairchild approached Mrs. Calva in the parking lot of the Checkmate Club at about 11:00 p.m. As she turned to go to the back door of the club, he ran toward her, jerked the door open, stepped inside and said, “Give me your money.” Mrs. Calva said, “I don’t have anything but my keys” and showed him her hands and keys and turned to go into the inside of the club. When Fairchild first approached Mrs. Calva, he had one hand “up under his shirt” and kept it there during the entire confrontation. His shirt was “out at the bottom.” Fairchild made a statement to the police after he was arrested in which he stated that he had tried to make Mrs. Calva believe he had a gun by holding his hand under his shirt.

■ I find the majority’s explanation of its disregard of appellant’s statement baffling, to say the least. If appellant really intended his conduct to be a representation that he was armed with a deadly weapon, how can an appellate court on review say that the trier of fact has no reasonable basis for an inference that he engaged in conduct that was a representation that he was so armed? When the testimony of Mrs. Calva is considered, along with the statement, I submit that the trial court’s drawing of the inference was reasonable and the majority’s unreasonable.

In a closely analogous case, it has been held that evidence that one accused of robbery entered a bank with his hand in his pocket, instructed the bank manager not to sound the alarm and the tellers to hand over the money was sufficient to establish conduct reasonably calculated to produce fear. United States v. Amos, 566 F. 2d 899 (4 Cir., 1977). Obviously, the basis of the fear was that the hand in the pocket was a representation that the robber was armed with a deadly weapon. In State v. Young, 134 W. Va. 771, 61 S.E. 2d 734 (1950), it was held that when a man entered a room, found a defenseless woman alone, put his hand into his hip pocket and commanded her to take a certain position and then committed a robbery, he was guilty of armed robbery. The West Virginia Supreme Court equated the conduct with a “threat of firearms.” Certainly, the conclusions of these courts are those of reasonable minds. The same reasoning would support the finding of fact here.

It seems to me that the majority is, in reality, displeased with the language of the statute. If this is the case, it should say so and, perhaps, the General Assembly would change it. Until it is changed, the courts shall not nullify it by deciding what inference a fact finder should have drawn from the conduct of the accused in a case like this one.

I am authorized to state that Mr. Justice Stroud joins in this opinion.


author: John A. Fogleman, Chief Justice. Edward G. Smith,

text:
    ARKANSAS STATE HIGHWAY COMMISSION V. FIRST PYRAMID LIFE INSURANCE COMPANY OF AMERICA
    80-13
    602 S.W. 2d 609
    Supreme Court of Arkansas
    Opinion delivered June 23, 1980
    Rehearing denied August 25, 1980

      Thomas B. Keys and Kenneth R. Brock, for appellant.

      Mitchell, Williams, Gill & Selig, by: John P. Gill and William L. Owen, for appellee.
   John A. Fogleman, Chief Justice.

This is a second appeal from a judgment awarding compensation to appellee First Pyramid Life Insurance Company, for the taking of right-of-way for the “East Belt Freeway” in Pulaski County by appellant Arkansas State Highway Commission. On the first appeal, we reversed the judgment, because testimony was admitted to show that Wesley Adams, a real estate appraiser called by the landowner = as' a witness, had been employed by the Commission to make an appraisal' of the land and because of the exclusion of evidence relevant on the question whether the landowner had, at the time' it paid for the land taken, been trying to extricate itself from a transaction which was sick or sham. Arkansas State Highway Com’n. v. First Pyramid Life Inusrance Co., 265 Ark. 417, 579 S.W. 2d 587. On this appeal, appellant relies upon the following points:

I

THE TRIAL COURT ERRED IN ALLOWING CERTAIN TESTIMONY OF THE APPELLEE’S WITNESS, EDWARD G. SMITH, OVER APPELLANT’S OBJECTION.
II
THE TRIAL COURT ERRED IN LIMITING THE CROSS-EXAMINATION OF APPELLEE’S EXPERT WITNESS, JAMES LARRISON.
III
THE TRIAL COURT ERRED IN ITS RULING ON CERTAIN PORTIONS OF WITNESS JACK FARRIS’ TESTIMONY.
IV
THE VERDICT OF THE JURY WAS EXCESSIVE AND NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.
V
THE TRIAL COURT ERRED IN NOT GIVING CERTAIN INSTRUCTIONS REQUESTED BY APPELLANT.
VI
THE TRIAL COURT ERRED IN NOT GRANTING A MISTRIAL.

We find no reversible error and affirm.

We will discuss the points stated by appellant separately in the order stated.

I

Edward G. Smith,

a consulting engineer, who also testified at the first trial, was called as appellee’s first witness. He stated that land development had been a very important part of his engineering experience over the past 25 years and that his office was handling at least 200 projects in various stages of development at the time he testified. He related that he had started in appraisals for flood control reservoirs and that his experience in development of industrial parks has extended over the preceding 25 years. He named several parks, including Galloway Industrial Park, from which the right-of-way for the freeway was taken. The obvious purpose of Smith’s testimony was to prove that the highest and best use of the land was for industrial development. He described the location of roads, highways, railroads, industrial plants and other developed property in relation to a tract of some 250 acres in Galloway Industrial Park from which the right-of way was taken. He testified that he had been employed by William Rector of Rector-Phillips-Morse, a real estate firm, to evaluate this land for an industrial park prior to the time appellee purchased it. He testified, without objection by appellant, that he was asked to evaluate this land for an industrial park in terms of profitability, cost of development, source and cost of utilities and to determine whether it was profitable to develop the land as an industrial park and later to devise a plan for the development of an industrial park. Smith said that the plan had been prepared and that he had discussed it with appellee prior to appellee’s purchase of the property. He also testified that he had made an estimate of the cost of developing the property many times. When asked why he had done so, Smith responded that the purpose was to evaluate the development, to see that it is a feasible development and “that it will be profitable to proceed, buy the lands. You don’t buy a piece of land until you evaluate the cost and see that it is profitable.” Appellant objected to the use of the word profitable on the basis that the witness was not properly qualified to testify as to the profitability of the development. The trial judge overruled the objection, saying that he understood the witness to say that he had been employed to evaluate the land for the purposes of establishing an industrial park, and to see if, in his opinion, it was feasible, and assumed that this was what the witness was talking about. No admonition or limiting or cautionary instruction was requested by appellant.

A landowner is entitled to show every advantage that his property possesses, present and prospective, to have his witnesses state any and every fact concerning the property which he would naturally adduce in order to place it in an advantageous light if he were selling it to a private individual, and to show the availability of this property for any and all purposes for which it is plainly adapted or for which it is likely to have value and induce purchases. Arkansas State Highway Comm’n. v. Ormond, 247 Ark. 867, 448 S.W. 2d 354. In order to do so, it is competent for the landowner to show by a witness, who is an engineer with special knowledge of the special advantages of the lands bearing upon its adaptability or availability for a particular purpose, the facts which show the availability of the particular tract involved for that purpose as an element of value to one who might desire to acquire it for that purpose. Gurdon v. Ft. Smith R. Co. v. Vaught, 97 Ark. 234, 133 S.W. 1019. Every element that can fairly enter into the question of market value and which a business man of ordinary prudence would consider before purchasing the property should be considered by the jury in arriving at the difference between the value of the property before and after the taking or damage to it. Pulaski County v. Horton, 224 Ark. 864, 276 S.W. 2d 706. The latitude allowed the parties in bringing out collateral or cumulative facts to support value estimates made by witnesses is left largely to the discretion of the presiding judge. Little Rock Junction Railway v. Woodruff, 49 Ark. 381, 5 S.W. 792, 4 Am. St. Rep. 51. It was proper to allow the introduction of evidence tending to show the highest and best use of the property, independent of, and prior to, testimony as to values of lands taken. Arkansas State Highway Com’n. v. Witkowski, 236 Ark. 66, 364 S.W. 2d 309; Arkansas State Highway Com’n. v. Southern Development Corp., 250 Ark. 1016, 469 S.W. 2d 102; Arkansas State Highway Com’n. v. Ormond, supra. Evidence is relevant and admissible if it tends to show that the cost of making property available for a use other than that to which it was devoted is consistent with profitability. McCandless v. United States, 298 U.S. 342, 56 S. Ct. 764, 80 L. Ed. 1205 (1936).

Later in his testimony, Smith had been examined about the location of a sewer lift station. In response to a question about how the sewerage was treated, Smith said that he had been told to put the sewerage treatment plant on the property, but that he had told the developers that the plant should be located far off the “site” and not on valuable industrial land, which should not be put to sewerage treatment plant use. That use, he said, is not a valuable use and tends to lower the value of the land around it. Appellant’s objection primarily was directed to Smith’s relating what he had told someone on the question of location of the plant but concluded with the remark, “If he is going into a lot of valuable land and all this argument business, I don’t think it is proper.” The trial judge overruled the objection, on the basis that the consulting engineer was saying why he selected the particular location for the plant. The testimony, at most, was addressed to the question of desirability of location of a sewerage treatment plant. Smith never expressed an opinion as to the monetary value of the property and this reference to the reason for the location he specified for a sewerage treatment plant was not improper.

The testimony of Smith was that of one found qualified by knowledge and experience to testify as to specialized knowledge to assist the jury to understand other evidence and to determine the facts in issue and was admissible under Ark. Star. Ann. § 28-1001, Rule 701 (Repl. 1979).

Appellant also contends that there was reversible error in a statement by Smith that there had been prospective purchasers of tracts in the park. The witness had been testifying about the reasons utility lines had not been extended beyond the point they had been located at the time of the taking of the right-of-way and was asked on direct examination if he had anything further to say in that regard. Objection was then made that the witness was starting to talk about potential purchasers in violation of a pretrial order of the court against evidence as to offers for the purchase of real property. After this objection was overruled, appellee’s attorney asked, in essence, whether the reason the utilities had not been extended was that there had not been any future development in the area not served and that one would not do that until there is a sale. Smith answered there was more than one prospect to buy and a renewed objection was overruled. Smith then said that there had been more than one prospect to buy large sites that might encompass the rest of the park, or at least the west part of it, in 100-acre tracts, one of whom was from Italy. When appellant commenced to object further, the trial judge ruled that the witness was talking about- the- nature of developing utilities, not offers to buy. Appellee’s attorney then withdrew the question and dropped his pursuit of the matter.

We agree with the trial court that the witness was not violating the pretrial order because he was not talking about offers to buy. He mentioned prospects only and never indicated that there had been an offer to purchase by any of them or the terms of any offer. In none of the cases cited by appellant in support of its position have we ever said that the mere fact that there have been prospects to buy lands is inadmissible, at least when the issue addressed is only the highest and best use of the property in question. Those cases are Arkansas State Highway Com’n. v. Jackson County Gin Co., 237 Ark. 761, 376 S.W. 2d 553 and Arkansas State Highway Com’n. v. McKown, 253 Ark. 419, 486 S.W. 2d 525. They properly eliminate from consideration offers to purchase as evidence of fair market value.

II

James Larrison testified on behalf of appellee as an expert witness on land values. He had stated that the highest and best use of the subject property was for industrial use. On cross-examination, Larrison testified that he did not know how much appellee had paid for the property in question and did not analyze the original transaction. He said that he attached no significance to the original transaction because appellee bought the land “in the raw state” for development and then expended large amounts of money to extend utilities and develop the property to its present state. Larrison stated that there had been no sales of any of the property since appellee had purchased it, that not much industrial property sold in the area, and that he had talked with Rudolph Del Donno, who was in charge of investments for appellee, about how the investment was doing. Larrison said Del Donno furnished a detailed account of the money that had been spent, what appellee had done, and the total investment of appellee as of the date of the conversation. He did not recall Del Donno discussing whether appellee was happy or unhappy with its investment. After Larrison had stated that Del Donno furnished all the factual information requested, he was asked whether appellee still owned the property. Appellee objected on the ground that it was obvious that appellee did not, because appellant had taken it on January 4, 1978. The trial judge then ruled the question irrelevant on that point. In two prolonged in camera hearings, the purpose of the question and the basis of appellant’s objection were explored extensively. The trial judge stated that he was aware of evidence in the previous trial relating to a contract between Harris Cattle Company, Rector-Phillips-Morse and appellee and of the payment of $448,000 by appellee for the land taken by appellant, but that testimony of Allen Horne, a member of the Board of Directors of appellee to the effect that appellee made the payment because the purchase money note it signed made no exception for lands taken by eminent domain had been excluded and that this court had held the exclusion to be reversible error. The judge stated that since no evidence of either the contract or the payment had been introduced and the witness had stated that, in arriving at his opinion as to values, he did not take any contract between Harris Cattle Company and appellee into consideration, the question was not relevant. Appellant’s attorney stated that the purpose of the question was to determine whether the witness had any knowledge of the details of the reconveyance for the purpose of determining the fair market value of the property. It was also stated that the fact that the property was reconveyed to the seller a short time after the sale was very important in regard to the credibility of the witness. The parties then made extensive proffers of documents and records of proceedings in a chancery suit between appellee and Rector-Phillips-Morse on the one had and Harris Cattle Company on the other. The proffers included a three-volume transcript of the record in that suit. These proffers showed that pursuit of the question with this witness would have led into numerous collateral matters, such as: the relation of the lands taken to the suit, which in effect was for rescission of the contract except as to those lands; the question whether reconveyance of the land by appellee to Harris Cattle Company was because of appellee’s dissatisfaction with the transaction or was a settlement of that suit; whether it was a fair market transaction; and whether the taking of the property by appellant or appellant’s dissatisfaction with the purchase precipitated the chancery suit. The judge ruled the particular question was not relevant at the time but said that appellant would be permitted to call Del Donno and Horne in an effort to show that the highest and best use of the property was not as appellee was representing it in the eminent domain proceeding. Later, both Horne and Del Donno testified.

Appellant contends that it was prejudiced by this limitation on its cross-examination of Larrison and cites such cases as Arkansas State Highway Com’n. v. Lewis, 258 Ark. 836, 529 S.W. 2d 142, Arkansas State Highway Com’n. v. Pulaski Investment Co., 265 Ark. 584, 580 S.W. 2d 679, and Arkansas State Highway Com’n. v. Dean, 247 Ark. 717, 447 S.W. 2d 334, in which we have emphasized the importance of according a wide latitude in questions on cross-examination tending to impeach the credibility of a witness or to elicit matter to be considered in weighing his testimony, particularly where expert opinion evidence is involved, and held limitations in those cases to be unduly restrictive. In Lewis, however, we recognized that the trial court has much discretion in controlling cross-examination, so that the inquiry does not go too far afield. We find no abuse of discretion here.

Ill

Appellant complains that Jack Farris, an expert witness who testified about the values of the lands on behalf of appellee, considered a sale of one acre to Twin City Band as a comparable sale. On direct examination, Farris stated that he had used this sale as a comparable sale. When asked why none of the values he put on appellee’s land were $53,000 per acre, Farris explained that all his comparable sales were for more than twice the value he put on appellee’s property, because it would take time and money to develop appellee’s property. He then related some history of sales in the Little Rock Industrial Park, which opened in 1953, pointing out that the first sale of property there took place in 1955, and brought $1,500 per acre but a sale there during 1979 brought $60,000 per acre. Farris stated that he did not consider the later sale in the Little Rock Industrial Park as a comparable sale.

It is clear, and should have been clear to the jury, as it was to the trial judge, that Farris did not consider the sale in the Little Rock Industrial Park as a comparable one and that he did not consider it in arriving at his opinion as to values of appellee’s property. There was clearly no error in this regard.

Farris, when asked on direct examination specifically whether he considered the sale of the one-acre tract as comparable, said, “Well, not really, I was aware of it, I used it, but this took place in 1971,” but when appellant’s attorney asked if it was offered as a comparable, the witness said that it was offered and that “all of these sales were considered in making up my mind.” The witness added that “you can adjust them for time and often it is done.” A general objection by appellant was then overruled.

It is quite true that, before evidence of the consideration for a sale is admitted, it must be shown that the tract of land sold and that in question were similar. City of Little Rock v. Sawyer, 228 Ark. 516, 309 S.W. 2d 30. It is true that, when opinion testimony as to real estate values is based only on comparable sales, it should be stricken for want of a resonable basis when it is shown that no sale considered by the witness was of land comparable to that involved in the trial. Arkansas State Highway Com’n. v. Roberts, 246 Ark. 1216, 441 S.W. 2d 808. But the mere fact that a witness considers a sale that is not comparable, along with others, in arriving at his opinion as to value, is not a basis for excluding his testimony. Arkansas State Highway Com’n. v. Person, 258 Ark. 379, 525 S.W. 2d 77; Arkansas State Highway Com’n. v. Sargent, 241 Ark. 783, 410 S.W. 2d 381; Arkansas State Highway Com’n. v. Duff, 246 Ark. 992, 440 S.W. 2d 563. The opinion testimony of an expert witness can be considered, even though his opinion is not based entirely on comparable transactions. 5 Nichols on Eminent Domain, 253, § 18.42 [1].

IV

The verdict of the jury fixed the compensation to appellee at $482,400. Wesley Adams, an expert witness called by appellee testified that just compensation would amount to $483,400. The verdict in the first trial was $495,000. James Larrison’s opinion was that the difference in market values before and after the taking amounted to $640,950. Jack Farris fixed the difference at $569,425. Each of these witnesses was well qualified as an expert on real estate values. In view of this testimony, we are simply not in a position to say that the verdict of the jury was excessive.

V

Appellant complains that the trial court erred in refusing to give two jury instructions requested by it. The first was its requested instruction No. 7, which read:

You are instructed that the defendant had a duty to minimize the damages that they might sustain by virtue of the taking by the Highway Commission, and to that end, you are instructed that if you find that certain acts could have been done, or certain agreements could have been made by the defendants that would have lessened the damages suffered by the defendants, then they are not entitled to claim those elements today, and you will disregard any element of damages claimed by these defendants for such items as they might have corrected or eliminated.

Appellant’s argument that this instruction should have been given is that appellee should have taken measures to provide against the contingency of condemnation in its contract with Harris Cattle Company for purchase of the tract. It says that appellee had the responsibility of seeing that a condemnation clause was included in the instruments that would have minimized its damages in this case. This contention should probably be disposed of under the rule of Dixon v. State, 260 Ark. 857, 545 S.W. 2d 606. Appellant’s argument on this point is certainly not convincing and its citation of Arkansas State Highway Com’n. v. Dean, 244 Ark. 405, 425 S.W. 2d 306 is totally inapposite. True, we held there that it was error to refuse a similar instruction. Appellant, however, has substituted the word “agreements” for the word “arrangements” in the instruction considered in Dean. The similarity in the two cases is so remote as to be almost imaginary. In Dean, the landowners claimed damage by reason of the increased cost of extending a sewer line across the right-of-way by reason of highway construction thereon. There was evidence that the landowners could have greatly mitigated their damages by constructing a conduit for a sewer across the right-of-way after it was acquired and before actual construction was begun. There is not the slightest indication that appellee could have negotiated with the seller the kind of condemnar. tion clause appellant envisions. And, of course, the clause would not have protected appellant from liability to some landowner. It simply would have been liable to a different one. Appellee certainly could not have had a favorable clause inserted in the contract between the taking of the right-of-way and construction of the highway, as could be done with a sewer conduit. Appellant had the burden of showing that the landowner could have mitigated its damages. Arkansas State Highway Com'n. v. Frierson, 269 Ark. 81, 598 S.W. 2d 420 (1980). It did not do so.

The other instruction requested was:

You are instructed that in the determination of just compensation in this case, you are not to consider any damages arising as the result of any contract between the landowner and third parties, inasmuch as this is not a compensable element of damage.

Appellant bases its contention that this instruction., should have been given upon the fact that evidence was introduced showing that appellee had to pay Harris Cattle Company $7,700 per acre for the lands taken by appellant because there was no provision for relief of appellee from liability to Harris Cattle Company in the event of a partial taking of the lands by the exercise of the power of eminent domain. There was a clause in the contract requiring appellee to pay Harris Cattle Company $7,700 per acre when any of the lands were sold.

In the first trial of this case, appellee showed through Mr. Del Donno that appellee had paid Harris Cattle Company the specified sum of $7,700 per acre. We said on the first appeal that it was not error to admit this evidence to show what appellee had paid for the property, but that it was error to exclude testimony by Allen Horne which might tend to show that the transaction was sick or sham. Appellant had contended in the first trial, and on appeal, that the testimony about appellee’s transaction with Harris Cattle Company was not admissible in evidence. In the second trial, however, appellant introduced the deed from Harris Cattle Company to appellee dated September 6, 1973, the vendor’s lien note, and the conveyance from First Pyramid Life Insurance Company to Harris Cattle Company, acknowledged July 10, 1978. After this evidence was introduced, appellee called Allen W. Horne to explain the reconveyance to Harris Cattle Company and the payment made by appellee.

Appellee did not seek to recover damages arising as the result of its contract with any “third parties.” The jury was instructed that just compensation to the landowners was the fair market value of the lands condemned by the Highway Department on January 4, 1978, plus damages to the remaining lands, if any. Fair market value was defined as, “the highest purchase price the land would bring in the market in a transaction between an informed seller and an informed buyer, after they have had a reasonable time for negotiations with the seller being willing, but not forced, to sell, and the buyer being willing, but not forced, to buy.”

Appellant seeks to explain its introduction of the deed from Harris Cattle Company by the fact that its cross-examination of Wesley Adams had revealed that he had used this sale as one of the comparable sales he considered in arriving at his opinion as to values. This explanation is not totally satisfactory, because a cross-examining attorney is not entitled to embark upon a fishing expedition with immunity from any unfavorable information he may elicit. Arkansas State Highway Com’n. v. Russell, 240 Ark. 21, 398 S.W. 2d 201. In view of appellant’s introduction of the deed and the clarity of the instructions given, we find no error in the refusal of this instruction.

VI

Appellant moved for a mistrial after appellee’s attorney had, on redirect examination, referred to a question on cross-examination of the witness about 0.9 or 0.09 of an acre and the absence of any mention of such a tract on direct examination and then asked the witness to what that had reference. The witness replied that he had, by typographical error in his original report, listed a tract as containing 8.9 acres when it actually contained 8.09 acres. Appellee’s attorney then had the witness again confirm that the fact there was a discrepancy of .9 or .09 acres that caused a typographical error was not stated by the witness on direct examination but that this had been brought out on cross-examination. Appellee’s attorney then stated that he had never seen the appraisal made by the witness and that he wanted to look at it. Appellant’s attorney objected. After looking at the appraisal report, appellee’s attorney stated that it was long and asked the witness to show him the reference to the mistake in acreage. The witness pointed out that it was in the amount of the taking. After the cross-examination was concluded, appellant’s attorney moved for a mistrial. He stated that it had become apparent to him that Adams had corrected an error on his computation on a tract of land taken, and he had avoided questions as to errors, but that appellee’s attorney had brought out the fact there was an error in the appraisal, and implied the only way appellant’s attorney could know about it was because he had advance knowledge and that the appraisal was done for appellant. Appellant’s attorney also pointed out that, in his opening statement, appellee’s attorney had said that Adams had been subpoenaed. In denying the motion for mistrial, the trial judge remarked that appellee’s attorney did not convey to him the implication appellant’s attorney saw in the redirect examination.

In arguing this point appellant also points out that appellee’s attorney had asked Adams when his appraisal was made with reference to the date of taking and whether the appraisal was written. These questions were natural inquiries. Even when considered along with the redirect examination of the witness, the inference that Adams had done the appraisal for appellant seems somewhat strained. The granting or denial of a mistrial is a matter lying within the sound judicial discretion of the trial judge and his exercise of that discretion will not be reversed in the absence of manifest abuse. Dickerson Construction Co. v. Dozier, 266 Ark. 345, 584 S.W. 2d 36. The granting of a mistrial is an extreme and drastic remedy to which resort should be made only when it is apparent that justice cannot be done by a continuation of the trial. Donahue v. Cowdrey, 246 Ark. 1028, 440 S.W. 2d 773; Back v. Duncan, 246 Ark. 494, 438 S.W. 2d 690. This is not such a case as would justify our finding an abuse of discretion.

The judgment is affirmed.

       Rector-Phillips-Morse made no appearance in this court on the first appeal, and is not a party in this appeal. The record tendered by appellant in this trial shows that any connection they might have had with the transaction between Harris Cattle Company and appellee was terminated by a settlement entered into on November 30, 1978.


author: John A. Fogleman, Chief Justice.

text:
    Ethel M. STIVERS v. PACIFIC BUILDING, INC.
    80-45
    601 S.W. 2d 822
    Supreme Court of Arkansas
    Opinion delivered June 23, 1980

      Dan Stripling, for appellant.

      John Mauzy Pittman, of Baker & Pittman, for appellee.
   John A. Fogleman, Chief Justice.

Appellant, Ethel M. Stivers, a resident of Iowa, entered into a contract with Bartlett Homes, Inc., to construct a dwelling house for her on a lot she owned at Fairfield Bay in Van Burén County. Bartlett Homes purchased a modular pre-cut home from Pacific Building, Inc., who brought this action claiming a materialman’s lien on appellant’s lot for the purchase price. Mrs. Stivers seeks a reversal of the court’s decree against her upon two grounds, i.e., that the claim was barred by the statute of limitations and the lien statute is unconstitutional. We find no merit in her contentions and affirm the judgment.

The issues as to constitutionality raised by appellant are the same ones advanced and rejected in South Central District of the Pentecostal Church of God of America v. Bruce-Rogers Company, 269 Ark. 130, 599 S.W. 2d 702 (1980), so we need not consider that ground further.

Appellant contends that the action was not commenced within 120 days after materials were supplied by Pacific. The suit was filed without notice of the lien having been given, so the action was barred unless it was commenced within that period. The complaint was filed on July 26, 1978. It contained an allegation that Mrs. Stivers was a resident of Van Burén County. Summons was issued on the date the complaint was filed and returned by the sheriff on July 28, 1978, with the notation “Moved out of State” in the space provided for a return. On September 13, 1978, Pacific filed in amendment to its complaint, alleging Mrs. Stivers was a non-resident of the State of Arkansas, residing at Bettendorf, Iowa, and asked that service be had upon her under Ark. Stat. Ann. § 27-2503 et seq (Repl. 1979). A summons was issued and served pursuant to that statute. This service is not questioned, except for its timeliness. Mrs. Stivers filed her answer on October 6, 1978. In it, she denied that she was, or ever had been, a resident of Arkansas, or subject to service of process in Arkansas. She admitted ownership of the property on which the lien was claimed. She denied that the action had been instituted within 120 days.

In an affidavit supporting a motion for summary judgment, she stated that she and her husband purchased property in Fairfield Bay in 1967, and visited there twice annually until his death in 1972. She stated that she visited Fairfield Bay only three times after her husband’s death, and prior to 1976, but in 1976 and 1977 she visited Fairfield Bay twice each year. She stated that she visited one week in April, 1978, but did not return to Arkansas until after she was served on this action. Virgil Parks, a foreman for Bartlett Homes, who dealt with the representative of Pacific, testified that, during the course of construction after the contract was entered into, he had seen Mrs. Stivers on the premises on one occasion. The contract was entered into on April 4, 1978. He said that she was there in the latter stages of construction when the house was ready for installation of cabinets. J. L. Bartlett, who entered into the contract with Mrs. Stivers, said that she was in Arkansas discussing financing of the house in November, 1977. Mrs. Stivers executed a power of attorney in Van Burén County in October, 1977. It authorized Bartlett or Stan Hanford, of Bartlett Land & Realty Company, to secure the loan of funds necessary to complete the dwelling.

Mrs. Stivers testified that in October, 1977, she met with Bartlett at his office, selected a plan for the house and signed many papers. She said that she planned to live in the house whenever she moved to Fairfield Bay, sometime in the future. She stated that she returned to Arkansas in April, 1978, and remained for a little less than a week, during which time she visited the job site, talked to Bartlett and did various other things “like that.” She said that she was not in Arkansas in July or August of 1978 and had had no plans to be in the state during that period.

Under Ark. Stat. Ann. § 27-301 (Repl. 1979), the then governing statute, an action is commenced by filing a complaint and causing a summons to be issued and placed in the hand$ of “the sheriff of the proper county or counties.” Appellant contends that the action was not commenced by issuance of the summons to the sheriff of Van Burén County on July 26, 1978, unless Mrs. Stivers was a resident of the county or amenable to service there within 20 days after summons was handed the sheriff. We do not agree.

Appellant relies upon Williams v. Edmondson, 257 Ark. 837, 520 S.W. 260, in which we held that the proper county in a local action, as this one is, is the county in which the defendant resides or the county in which he may be served with process. Under the facts in that case, that holding correctly defined the “proper county.” Putting aside, however, any expectation that Pacific might have had that Mrs. Stivers could be served with summons in Van Burén County, or any contention that she might have had a residence there, even though'she was not domiciled in the county, the proper county under the Uniform Interstate & International Procedure Act [Ark. Stat. Ann. § 27-2501 et seq (Repl. 1979)] in a local action was Van Buren County. See Merriott v. Whitsell, 251 Ark. 1031, 476 S.W. 2d 230. The summons issued could have been served by the Sheriff of Van Buren County under Ark. Stat. Ann. § 27-2503 (Repl. 1979*

We do not consider that the fact the summons required an answer within 20 days would have prevented service under that statute. Appellant contends that the time for answer in such cases is 30 days, relying upon Ark. Stat. Ann. § 27-339 (Repl. 1979). The application of this section to “long-arm” service by the sheriff is questionable to say the least. Assuming, however, without deciding, that the summons should have required answer within 30 days under Ark. Stat. Ann. § 27-308 (Repl. 1962), this discrepancy did not render the summons fatally defective so that its issuance did not constitute the commencement of an action. A defect in a summons which does not make it void may be amended after service and the amendment will have retroactive effect. Rhinehardt v. Light, Judge, 225 Ark. 1045, 287 S.W. 2d 463; Chicago Mill & Lumber Co. v. Lamb, 174 Ark. 258, 295 S.W. 27; Lowenstein v. Gaines, 64 Ark. 499, 43 S.W. 762; Mitchell v. Conley, 13 Ark. 414; Haines v. McCormick, 5 Ark. 663. Even if defendant might have successfully moved to set aside any default judgment which might have been entered in less than 30 days, the summons was not void.

Neither failure to serve the summons nor defective service prevented commencement of the suit by issuance of the original summons. St. Louis Ark. & Tex. Ry. Co. v. Shelton, 57 Ark. 459, 21 S.W. 876; Roach v. Henry, 186 Ark. 884, 56 S.W. 2d 577. See also, Pender v. McKee, 266 Ark. 18, 582 S.W. 2d 929. The statute of limitations was tolled by issuance of the original summons, so long as appellee acted in good faith in commencing the action and was diligent in thereafter obtaining service of process. Williams v. Edmondson, supra.

We cannot agree with appellant’s contention the service could not have been had under § 27-2503, simply because appellee had alleged that she was a resident of Arkansas. Appellant argues that § 27-2503 only authorizes service upon a non-resident of Arkansas. That section applies when the laws of this state authorizes service outside the state. Service outside the state is authorized whenever personal jurisdiction is authorized under Ark. Stat. Ann. § 27-2502 (Repl. 1979). Under that section, an Arkansas court has personal jurisdiction over one who transacts any business in this state in a cause of action arising from the transaction of that business. Mrs. Stivers was in that category.

Appellant has not shown that appellee did not act in good faith in commencing the action and that it was not diligent in thereafter obtaining service of process. We cannot say that the holding of the chancellor that appellee commenced the action within 120 days from the date (May 1, 1978) the “package home” was delivered to appellant’s lot was clearly erroneous.

The decree is affirmed.

Hickman and Mays, JJ., dissent as to the constitutional issue.


author: George Rose Smith, Justice.

text:
    HUGHES WESTERN WORLD, INC v. WESTMOOR MANUFACTURING COMPANY
    80-58
    601 S.W. 2d 826
    Supreme Court of Arkansas
    Opinion delivered June 23, 1980

      Glover, Sanders, Parkerson & Hargraves, by: Robert S. Hargraves, for appellants.

      James C. Campbell and R. Scott Campbell, for appellee.
   George Rose Smith, Justice.

This is essentially a simple case in which Westmoor Manufacturing Company brought suit to recover $108,967.24 for merchandise sold on open account to Hughes Western World, a corporation. The individual defendants, Mr. and Mrs. Carl E. Hughes, signed a written agreement guaranteeing the payment of the account. The defendants filed a verified general denial, but they have never specifically denied that the merchandise was sold to the corporation or that the account is unpaid. In appealing from a summary judgment and a second substituted summary judgment for the plaintiff the defendants argue that the pleadings and proof did not justify the circuit judge in entering summary judgment.

In a proper case a summary judgment is a useful device for avoiding unnecessary trials when there is no real issue of fact to be decided. Kratz v. Mills, 240 Ark. 872, 402 S.W. 2d 661 (1966). The appellants correctly point out that affidavits for summary judgment are to be construed against the moving party, but counsel fail to recognize the further rule that when the movant makes a prima facie showing of entitlement to a summary judgment, the respondent must discard the shielding cloak of formal allegations and meet proof with proof by showing a genuine issue as to a material fact. Miskimins v. City Nat. Bank, 248 Ark. 1194, 456 S.W. 2d 673 (1970); Coffelt v. Ark. Power & Light Co., 248 Ark. 313, 451 S.W. 2d 881 (1970); Deam v. O. L. Puryear & Sons, 244 Ark. 18, 423 S.W. 2d 554 (1968).

That burden of going forward was not met in the court below. The plaintiff filed with, its motion for summary judgment an affidavit of its credit manager attesting the accuracy of the account and a copy of the guaranty agreement. Thus a prima facie case was made. The defendants responded only with an affidavit of Carl E. Hughes, which did not deny the debt but said in a roundabout way that an employee of West-moor had promised that the defendant corporation would not be required to pay “for an unspecified period of time” and that “in no event would Hughes Western World, Inc., as Affiant understands it, be required to pay said obligation within one year from the receipt of said merchandise.” (Italics ours.)

Our summary judgment rule, which is copied from the Federal Rules, requires that an affidavit in response to a motion for summary judgment be made on personal knowledge and set forth “specific facts” showing that there is a genuine issue for trial. ARCP, Rule 56. The trial judge correctly held that the qualification, “as Affiant understands it,” does not assert the required personal knowledge. Cermetek v. Butler AVPAK, 573 F. 2d 1370 (9th Cir., 1978); Jameson v. Jameson, 176 F. 2d 58 (App. D.C., 1949). After the circuit judge ruled the affidavit insufficient, the defendants did not file a more specific affidavit, but merely submitted a motion arguing that the phrase, “as Affiant understands it,” was intended to recite that the affiant had personal knowledge of the matter. There was, however, still no positive statement on personal knowledge, even though the defendants had the opportunity between the entry of the two summary judgments to file a supplemental affidavit. See Rule 56 (e). (Also, by that time the open account was unquestionably due, even if there might have been some basis for doubt about that fact when the complaint was filed.)

Affirmed.


text:
    ARGONAUT INSURANCE COMPANY v. M & P EQUIPMENT COMPANY
    80-84
    601 S.W. 2d 824
    Supreme Court of Arkansas
    Opinion delivered June 23, 1980

      Barber, McCaskill, Amsler, Jones & Hale, for appellant.

      Herby Branscum, Jr., for appellee.
   George Rose Smith, Justice.

An action by laborers or materialmen against the surety upon a contract for the construction of public works must be brought within six months after final payment is made to the general contractor. Ark. Stat. Ann. § 14-606 (Repl. 1979). On this appeal such a surety, Argonaut Insurance Company, argues that the trial judge, sitting without a jury, was wrong in holding that the action is not barred. We agree with the trial court.

Our review is governed by the substantial evidence rule, the case having been tried before the effective date of ARCP 52. In 1973 the state highway department let a road construction contract to D. F. Jones Construction Company as the prime contractor. The appellee was a subcontractor for the excavation and hauling of dirt. In 1974, in the early stages of the work, Jones abandoned the job, and Argonaut employed another contractor to finish the project. On June 15, 1976, the highway department made its final payment, apparently to Argonaut. This action was not filed until December 22, more than six months later. For that reason Argonaut contends that the action is barred.

The answer to Argonaut’s contention is that there is much substantial evidence to show that he appellee’s cause of action is actually based not upon Argonaut’s original contract of suretyship but upon its later assumption of responsibility for the completion of the job and its direct promise to pay the balance due the appellee, which proved to be $4,-669-87. The appellee’s president testified that after Jones abandoned the job Argonaut made direct payments of $6,900 and $10,000 upon estimates submitted by the appellee for its work and promised to pay their remainder. That positive proof was not overcome by the testimony of a highway department employee who said that the final payment was made to Jones on June 15, 1976. That witness had not seen the final check, did not know whether it was actually cashed by Jones, and testified only from what appears to be a business machine print-out of some kind. The trial court could reasonably find that the final payment was not made to Jones, which had abandoned the job two years earlier, but to Argonaut or for its benefit. These facts distinguish this case from Southern Surety Co. v. Simon, 172 Ark. 924, 290 S.W. 960 (1927), relied upon by Argonaut. There the court pointed out specifically that the surety had not agreed to pay debts incurred by the construction company and that the complaint was based upon the contract of suretyship. Here just the opposite is true: Argonaut made a direct promise to the appellee, and the suit is essentially upon that promise; so the date of the final payment upon the contract is not controlling.

Affirmed.


text:
    Levi WHITE v. COUNTY OF FAULKNER and Gerald WARD
    80-69
    601 S.W. 2d 827
    Supreme Court of Arkansas
    Opinion delivered June 23, 1980

      Henry & Graddy, by: Larry E. Graddy, for appellant.

      Brazil & Roberts, for appellees.
   Frank Holt, Justice.

The appellee county and appellee Gerald Ward, County Judge, brought this action to enjoin the appellant from interfering with the county’s maintenance of a road which traversed his property. The appellees asserted that the roadway was a public one (county road No. 495), and the county was entitled to access for the purpose of maintaining it. The appellant responded with a counterclaim for an injunction against appellees, asserting that the roadway was private, and sought to recover for damages to his property. The chancellor held the road to be a county road, granted appellees’ injunction, ordered the county to maintain the cattle guards at each end of the road and awarded $500 damages to appellant. We affirm as modified.

Appellant correctly asserts that the county must establish adverse use by the public under a claim of right for a continuous period of not less than seven years. Craig v. O’Bryan, 227 Ark. 681, 301 S.W. 2d 18 (1957); and Fullenwider v. Kitchens, 233 Ark. 442, 266 S.W. 2d 281 (1952). Here it is argued that the county has failed to do so.

Appellee Ward, County Judge since 1977, testified that the road has been maintained by the county since the 1960’s, and he has continued to maintain it until appellant interfered with the maintenance. Although the road never has been dedicated or acquired by eminent domain, it is considered as being in the county system and has never been abandoned. The state assigned No. 495 to the road. He graded the road from 1963 through 1966 when he was a county employee. The appellant had tried to persuade him to take into the county road system an alternate road along a section line or around his property. Although under present law he has authority to accept the alternate road in the county system, he could not do this until certain specifications as to gravel and width were met as required by county ordinance. Cattle guards at each end of the road in question had kept appellant’s cattle contained since I960. The superintendent of local school testified that the road had been used by the school bus for the past 11 years. When the bus couldn’t travel this road, it then used the alternate road. Another witness testified that during the last 12 years the school bus had used the road in question and the mailman had used it until recently. Further, the road was known as the “main artery” through the area. The county superintendent of roads for the past 2 years testified that the road was considered a county road. It was 30’ to 35’ wide. Another witness testified that when she purchased property from appellant 2 years previously he told her the road had been in existence 100 years, and the county maintained the road and cattle guards. She was led to believe by the appellant that it was a county road. Her family and people in the area have used the road continuously.

The appellant responded that his problems started in the early 1970’s when some of his cattle were killed by cars, and he made the mistake of asking the county to grade the road; the use of the road by the public, the school bus, and the mailman was permissive; and the cattle guards at each end of the road, in existence for many years, replaced the use of gates. On cross-examination he testified that the only way people could get through was by use of the road in question, and the traffic was getting bad; everyone had tb use this road, including the mailman and the school bus; the county graded the road and “let” him “maintain a speed dip in the mid-die of it;” the former county judge had agreed to “open up” and maintain an alternate road around appellant’s property provided appellant would assist by paying for the dozer work; appellant spent about $1,500 to accomplish his part of the agreement; the purpose of improving the alternate road was to divert public travel from the road in question to the alternate one and, thus, protect his property and cattle; the present county judge worked on the alternate road for about a year, then got mad at him and decided to give him problems; the cattle guards were 14’ in width and parts of the one-lane road were only 20’ in width; and it was a crooked wagon road which was gradually straightened through the years. On appellant’s behalf, a witness testified that the road was an ordinary wagon road and not the main one in the area. Appellant’s neighbor testified that the road was only 20’ in width, and the present and preceding county judges had agreed to assist him and appellant in opening and maintaining an alternate road for the public. In response, the county judge, who served from 1971 to 1976, testified that he told the appellant he would “blade” the alternate road if appellant would “doze it off;” however, he did not agree to take it into the county road system. He grew up in the community, and the road in question has always been the “main road” in that area. It was about 30’ in width and maintained by the county. The cattle guards were paid for, installed and maintained by the county.

We first observe that we disagree with appellant’s argument that maintenance of 14’ wide cattle guards at each end of his property constitutes sufficient notice to the public that use of the road was permissive. He cites Brooks v. Reedy, 241 Ark. 271, 407 S.W. 2d 378 (1966). However, the facts there are not analogous to the facts here since the barriers or obstructions in Brooks were wire gates crossing the road at three points. The gates, unlike the appellant’s cattle guards, could have been latched to obstruct any entry by the public. The cattle guards merely contain the cattle. They do not restrict public use of the road at any time. Further, there was evidence that the county paid for, installed and maintained the cattle guards.

We agree with the chancellor that the evidence clearly demonstrates adverse use by the public under a claim of right for a continuous period of more than seven years. Therefore, the court was correct in holding the road to be a public road and in granting the appellees’ injunction.

The appellant next contends that the chancellor erred in holding there had not been a trespass by the county on his property bordering the road or right-of-way. According to the appellant, the road was approximately 20’ wide, and the trees destroyed were some 12’ to 15’ from the edge of the road. However, appellees adduced evidence that the road was 30’ to 35’ in width. The chancellor found the roadway was 30’ wide, “not including ditches”, and awarded $500 to appellant for expenses in cleaning up the debris left outside the roadway or on his property by the county. We cannot say that the chancellor’s finding as to damages for trespass is against the preponderance of the evidence. However, the evidence does not justify a finding that “ditches”, undefined, should be in addition to the width of the 30’ road. Therefore, the chancellor’s order is modified to that extent.

Neither can we say the chancellor’s finding, which disallowed appellant’s claim for money expended by him on an alternate road in reliance upon an agreement with the county, is against the preponderance of the evidence since the evidence as to the existence of the asserted contract was also in sharp conflict.

Affirmed as modified.


author: Darrell Hickman, Justice.

text:
    ADVENTIST LAYMEN’S FOUNDATION, et al v. Alpha Miller BENNETT
    80-72
    601 S.W. 2d 830
    Supreme Court of Arkansas
    Opinion delivered June 23, 1980

      Jon R. Sanford, of Sanford, Pate & Marschewski, for appellants.

      J. Marvin Holman, for appellee.
   Darrell Hickman, Justice.

The Adventist Laymen’s Foundation is a non-profit corporation which was formed for essentially religious purposes. Alpha Miller Bennett, the appellee, and her husband had attended religious services conducted by this organization in Johnson County, Arkansas. After the death of her husband she deeded a tract of land, consisting of about 90 acres, to the foundation, reserving to herself a life estate. This was in 1974. The next year, in February, 1975, when it was decided by the foundation that some buildings should be built on the tract, new deeds were executed. The foundation deeded the property back to the appellee and she executed a new deed to the foundation. This deed granted the land to the foundation in fee but contained a reversionary clause relating to the use of the land. At the same time an agreement was entered into between the foundation and the appellee which provided, among other things, that not only could the appellee live on the land for the rest of her life but the foundation agreed to pay all of her medical expenses except those covered by social security. She was also made a member of the Board of Directors.

The appellee married Robert Bennett in 1977, and thereafter the relationship between the parties deteriorated. The appellee filed suit to set aside the deeds that were executed in 1975 because the foundation had failed to pay her medical bills as agreed. There were other allegations and issues but they are irrelevant to this appeal. After a lengthy trial, the chancellor set aside all the deeds between these parties and ordered the property sold, reserving judgment on disposition of the proceeds of the sale until a further hearing could be held.

The foundation appeals alleging the court was wrojig in cancelling the deeds and the contract for five reasons; The appellee did not request that all deeds between the parries be set aside, just the 1975 deed, and, therefore, the court was wrong in setting aside the 1974 deed; the appellee did not have “clean hands” and should not be allowed to prevail; the appellee did not prove her case as required by law; the appellee did not offer to restore the foundation to its position and failed to surrender possession before suit; and, finally, the court was wrong in construing the deeds and the contract together so a breach of the agreement permitted cancellation of the deeds.

When the appellee signed the agreement she had already lost one leg because of complications from diabetes. After the agreement she lost another leg and the medical expenses for that operation were $10,343.65 for the hospital and $3,131.50 for the doctor. The operation was in July, 1975. The foundation did not pay these bills because it did not have the money. The doctor settled his account with the appellee by accepting less than full payment from the Welfare Department. The hospital wrote off its bill as uncollectible. There is evidence the appellee consented to these actions by the hospital and the doctor. However, it is not disputed that the foundation had a meeting, at which the appellee was present, and the hospital bill was discussed. It was decided that the only way the bill could be paid was for some of the land to be sold and the appellee objected to that; the matter was dropped. The appellee filed suit on February 27, 1978.

The chancellor found that the fact that the bills may have been forgiven did not relieve the foundation of its obligation. Furthermore, the chancellor found that the evidence indicated that the foundation could not in the future guarantee that the medical bills would be paid. The evidence supports this finding because essentially the foundation had no money; at no time has this foundation paid a single salary to its officers; two of the officers were paid by a similar corporation set up in Mississippi, three of whose directors are also directors of this Arkansas corporation.

The appellant argues that this lawsuit only involved the 1975 instruments and not the 1974 deed. This is a technical argument that goes to the pleadings. The appellant argues that even though the 1975 instruments were set aside, there still existed the 1974 deed which granted the foundation the remainder of the property after the life of the appellee; since the complaint did not ask the 1974 deed to be set aside, the chancellor erred in doing so. There is no merit at all to this argument. The parties swapped deeds in 1975, the foundation deeding her back the land which, in effect, cancelled the 1974 deed. The foundation requested the new deed so it could build improvements on the land. By the time the case was tried, a building valued at about $30,000 had been completed as well as two residences for members of the foundation.

The argument that the appellee did not have “clean hands” is also without merit. The simple fact that the doctor and the hospital did not collect the bills and the appellee may have encouraged or condoned this action is irrelevant to the question of whether the foundation lived up to its obligation. It agreed to pay those bills and it did not do so. She received demands from the hospital for payment, they were presented to the board, which acknowledged that the bills could not be paid unless land was sold.

The foundation argues that the deeds and contract could not be cancelled and set aside unless clear, cogent and convinving evidence showed that there was a branch of a covenant. That is a correct statement of law. Prentice v. Cox, 261 Ark. 19, 547 S.W. 2d 744 (1977). But the evidence was overwhelming that the foundation had failed to pay the medical bills as it had agreed. Therefore, there was no failure by the appellee to meet the burden of proof.

There was no obligation on the part of the appellee to make the foundation whole. They paid nothing for the land. It was a gratuity and, therefore, she would not have to offer them anything before seeking cancellation of the instruments. The chancellor decided to sell the land in order to restore the parties as nearly as possible to their former position. Of course, he recognized it was impossible to actually restore them to their former positions because of the improvements on the land. We find no error in such judgment. Sometimes it is the only alternative.

Finally, the appellant argues that the deed and the contract were separate and the deed should not be set aside because of a breach of the agreement to pay the medical expenses. As we have indicated, the documents were one and the same transaction. The fact that there was no mention in the deed of the agreement is irrelevant. The parties all went to one. lawyer and had the agreement drawn up and it was understood between these parties that the consideration for the deed was the agreement to take care of her as provided for in the agreement.

This is an unfortunate case because apparently all the parties entered into it in good faith, but, as often- happens in. situations like this, those good intentions deteriorate after close personal contact over a period of time. Personal services are difficult to' manage by legal agreements. The chancellor did the only thing that could be done in a situation like this, with as little damage to both parties as possible, and that is, ordered the property sold with the money to be divided according to equitable principles. Therefore, the decree is affirmed.

Affirmed.