text:
    Hazzle Pauline Ray, Employee v. Shelnutt Nursing Home, Employer, et al
    5-4863
    439 S.W. 2d 41
    Opinion Delivered April 7, 1969

      McMath, Leatherman, Woods & YonngdaM and Silas H. Brewer, Jr., for appellant.

      Terral. Rawlings, Matthews & Purtle for appellees.
   J. Fred Jones, Justice.

This is a workmen’s compensation case and the extent of permanent partial disability to the body as a whole is the question involved.

The facts very briefly are these: On November 24, 3965, Mrs. Pauline Kay injured her back while in the course of her employment as a practical nurse by the Siielnutt Nursing Home. The injury occurred when Mrs. Ray fell partially to the floor while attempting to assist an aged patient into a wheel chair. The injury resulted iu the surgical removal of an intervertebral disc at the lumbosacral angle followed by a spinal fusion from the fifth lumbar vertebra to the sacrum on December 21, 1965. Mrs. Ray was paid compensation benefits for temporary total disability from the date of her injury until the end of her healing period on March 3, 1967. The claim before the Workmen’s Compensation Commission was for a determination of the extent or percentage of permanent partial disability.

The employer and its compensation insurance carrier controverted the claim for any permanent partial disability in excess of 20%. The Commission awarded 40% permanent partial disability to the body as a whole and the employer and compensation insurance carrier appealed to the Saline County Circuit Court. The circuit judge held that there was no substantial evidence to sustain the Commission in awarding more than 20% permanent partial disability and Mrs. Ray brings this appeal, relying upou the following point for reversal:

“There is substantial evidence to support the award of the Workmen’s Compensation Commission, and the Circuit Court therefore erred in modifying that award.”

We agree with the circuit court that there was no substantial evidence to sustain the Commission’s award of more than 20%.

We recognize the controlling legal standards expressed by this court in all the cases cited by the appellant. We recognize that evidence in a compensation ease should be given its strongest probative force in fav- or of the action of the Commission. We recognize the responsibility of the Commission in drawing inferences from testimony open to more than a single interpretation. We recognize that the determination of the percentage of permanent disability in a workmen’s compensation ease is a function of the Commission not to be disturbed on appeal if supported by substantial evidence, and we also recognize that the degree of disability suffered by an injured employee is a factual question to be determined by the Commission as stated in Caddo Quicksilver Corporation v. Barber, 204 Ark. 985, 166 S.W. 2d 1, cited by the appellant.

The appellant cites the cases of Glass v. Edens, 233 Ark. 786, 346 S.W. 2d 685, and Wilson & Company, Inc. v. Christman, 244 Ark. 132, 424 S.W. 2d 863, in support of her contention, but those cases are clearly distinguishable from the case at bar.

The appellant argues in her brief that “the landmark decision in Glass v. Edens ...firmly established the doctrine that the Commission must consider numerous factors, in addition to functional or anatomical impairment in determining an injured workmen’s permanent partial disability.” If such doctrine was firmly established in Edens, it only applies when such additional factors pertain to disability and are presented to the Commission by competent evidence.

In the Edens case the Full Commission affirmed a referee’s finding of a 40% permanent partial disability io the body as a whole based entirety on a medical rating of 40% under the erroneous assumption by the referee, that he was dealing only with scheduled injury and was limited to the consideration of medical evidence only under a former decision of the Full Commission. The referee in the Edens case said:

“ ‘In the case of Jesse A. DeBin v. Kaiser Engineers, reported Vol. 214, page 3 of the Opinions of the Full Commission, the Commission held that evidence other than clinical findings cannot be considered to arrive at a rating for permanent partial disability. I must therefore only consider the medical rating of disability.’ ” (Emphasis supplied.)

In remanding the Edens case for further consideration, this court said:

“...Ark. Stats., § 81-1313 (d), provides:
‘A permanent partial disability not scheduled in subsection (c) hereof shall be apportioned to the body as a whole, which shall have a value of 450 weeks, and there shall be paid compensation to the injured employee for the proportionate loss of use of the body as a whole resulting from the injury.’
Appellees contend that this amended section of the Workmen’s Compensation Act makes all injuries scheduled injuries and that an injured employee should only be paid for functional loss of use of his body.
We feel the Legislature’s use of the term ‘loss of use of the body as. a whole’ in Ark. Stats., § 81-1313 (cl), when read in the light of other sections of the Workmen’s Compensation Law, which are not in conflict therewith, does not mean merely functional disability but includes, in varying degrees in each instance, loss of use of the body to earn substantial wages.”

There is nothing startling or so unusual about the decision of this court in the Edens case that marks it as a “landmark decision.” That decision would have really been a landmark decision had we agreed with the referee, and held that evidence other than clinical findings could not be considered in determining the extent of permanent partial disability and that only the medical rating of functional disability could be considered for lhat purpose. If such had been our holding, we would have eliminated the need for a referee or a Commission in determining extent of permanent partial disability. While in so holding we would have greatly lightened our own task in determining the substantial nature of evidence submitted in a permanent disability ease, we would have practically repealed the “other sections of the Workmen’s Compensation Law,” referred to in the Edens decision, including the statutory definition of disability. Only one disability, in all its degrees as to partial, total, temporary and permanent, is defined in Ark. Stat. Ann. & 81-1302 (e) (Repl. 1960) as follows:

“ 'Disability’ means incapacity because of injury to earn, in the same or any other employment, the wages which the employee was receiving at the time of the injury.”

Our decision in the Edens case did not establish the doctrine that the Commission must consider numerous factors in addition to functional or anatomical impairment, in determining an injured workmen’s permanent partial disability. We did not say in that case that the Commission must do anything. What we did say was that the Commission is not confined, in its consideration, to clinical proof or medical evidence alone, in arriving at the extent of permanent disability suffered by an injured employee under the Workmen’s Compensation Law. In Edens we simply held, in effect, that the legislature bad not placed the Commission in a medical strait jacket in determining disability as defined in the act, permanent or otherwise.

We did not know then, and we do not know now, what substantial evidence, other than the medical evidence, was before the Commission and available for its consideration in the Edens case. If there was other evidence before the Commission, it erroneously failed to consider it. The purpose in sending that case back to the Commission was for consideration of such other evidence as may have been before the Commission in that case, but which the Commission concluded it had no right to consider. The substantial nature of the evidence other than medical, marks the distinction between Wilson & Company, Inc. v. Christman, supra, and the case at bar.

In the Christman case, Christman sustained a similar injury and had a similar .education as the appellant in the case at bar. In that case 30% permanent partial disability was the highest amount by medical evidence and we affirmed the Commission’s award of 60%. Two of Christman’s former emplo3rers, for whom he had performed his lightest tasks, testified that they would not re-employ him on the basis of the medical reports. Aside from Christman’s own testimoiw as to his constant pain, the medical evidence, with emphasis supplied, was as follows:

Dr. Tom P. Cocker: “I do not believe that there is likelihood of further improvement as far as the back is concerned although the patient should continue on exercises in that hope.
I do not think that he will be able to return to manual type work or anything that requires repeated lending, stooping, lifting or prolonged standing or walking. It is my opinion that the patient has a permanent partial disability to his body as a whole of 25%. ”

JDr. William G. Lockhart, a neurosurgeon of the IIolt-KIroek Clinic in Port Smith, who performed the surgery on Christman, reported as follows:

“As stated in previous correspondence, I feel that we cannot, on any means, classify this boy with anything but a poor result from surgery.
Once we get through the emotional and psychogenic overlay here, I think that we would be justified in suggesting a permanent partial disability of the body as a whole of 25% to 30%.
I do not feel that this boy is going to be able to go back to an employment that he has enjoyed before such as manual exertions of lifting or bending over postures.
I do believe that he is employable in such work as bench work, in which he might be re-trained in. If he was able to get back into an 'enrplo3mble situation, regardless of its nature, I am sure that this would help reduce some of his anxiety and emotional overlay.
Several days ago, 6/20/66, he appeared in my office accompanied by his wife stating that he had total paralysis of the right lower extremity that had come on spontaneously.
* # * It was obvious, when he was examined in ilie office, that we were dealing with either a hysterical paralysis or malingering.
I feel that I have clone as much as I can do with üiis man at the present time. They seemingly do not wish to accept the fact that this could be a hyslerical problem and certainly his wife does not even like to consider the fact that there may be a question of malingering here also. It is obvious that we are not dealing .with that degree of physical disease at the present time that would cause the magnitude of problems, or for that matter what physical disease is present is so far overshadowed by these other factors that it is impossible to treat this man intelligently without thorough psychiatric evaluation and treatment.” (Emphasis supplied.)

In the Christman case we quoted from Larson’s Workmen’s Compensation Law, § 42.22, as follows:

“ ... [W]hen there has been a physical accident or trauma, and claimant’s disability is increased or prolonged by traumatic neurosis, conversion hysteria, or hysterical paralysis, it is now rmiformly held that the full disability including the effects of the neurosis is compensable. Dozens of cases, involving almost every conceivable kind of neurotic, psychotic, depressive, or hysterical symptom or personality disorder have accepted this rule.” (Emphasis supplied.)

We also pointed out in the Christman case “there is evidence in the record that appellee suffered poor eyesight as an additional handicap to some types of employment. ’ ’

Now turning to the case at bar, the members of the Full Commission examined the record for the preponderance of the evidence whereas, this court, as well as a circuit court on appeal, must examine the record for substantial evidence to support the finding of the Commission.

The referee, who heard the witnesses and observed their demeanor while testifying, summed up his impression of the appellant in the following language:

“Tlie claimant is a young woman who has proven herself to be adaptable in that she has learned the nursing profession as well as having been a saleslady and floor walker and an employee of a furniture company. The claimant impressed the Referee as being an articulate and knowledgeable lady, and the fact that she is only 39 years of age makes her a good candidate for rehabilitation.”

There is nothing in the record to refute the referee’s impression of the appellant, and therein lies part of the distinction between the ease before us and the Christ-man ease. Hysterical paralysis and partial blindness, as was evident in the Christman case, were not even suggested in the ease at bar, and appellant agreed in oral argument that traumatic neurosis is not contended as a contributing factor.

On direct examination the appellant gave her work history prior to her injury, but gave no testimony as to work history, attempts to work, or ability or inability to work since her injury and surgery. On cross-examination the appellant testified as follows:

“Q. Have you done any work since November 24, 1965 at all, anywhere?
A. No, sir.
Q. Have you done any work that you didn’t get paid for?
A. No, sir.
Q. Have you tried to get a job anywhere?
A. No, sir.
Q. Have you registered with the employment office ?
A. No, sir.
Q. Or gone to any places of business—
A. No, sir.
Q. —to see if they have any type of work? What hobbies do yon have?
A. Reading, watching television.
Q. Are you still able to do that?
A. Yes, sir, I have to lay down an awful lot so that passes the time for me.
Q. All right. Do yon drive a car?
Á. On occasion, yes, sir.
Q. Have you been driving a car since your injury on November 24, 1965?
A. Yes, sir.”

Appellant testified as to what the doctors had told her relative to the work she could do and what she should avoid, and she testified as to the types of work she had done prior to her injury. She offered no testimony at ail, of a substantial nature, pertaining to her ability to earn in the same or other employment, the wages she was receiving at the time of her injury.

Dr. McKenzie, one of the orthopedic surgeons who performed appellant’s spinal fusion, testified as follows:

“Q. Now I’ll ask yon if you had occasion to see her and make another report on March 3rd?'
A. Yes, sir.
Q. I’ll ask you if the patient was dismissed at that time with a disability rating?
A. At that time she said she was having some pain, but this wasn’t too much. Then that she had diffuse tenderness; that there was no muscle guarding at this time. There was some restriction in the motion of the spine. The x-rays, including the bending films, revealed that the fusion was radiographically solid and at that time we felt that she could return to work which did not require heavy lifting. And as a matter of fact, I think we sent a copy of this information, at this time, to the rehabilitation people so that they could make a contract with her to maybe start trying to train her in some activity which did not require heavy lifting, and she was dismissed at that time with 15 per cent permanent disability.
Q. Is it your opinion, based upon reasonable medical information that this is the disability this woman has?
A. Yes.
Q. Now with reference to work that she could not do heavy lifting, could you tell us what type of work that she might be able to do?
A. I think she could perform activities, most any activity which required use of her upper extremities. Activities in which a person is allowed to change position infrequently [sic] from a sitting to a standing position, or some type of work that she can get up and move about, providing she didn’t have to manipulate patients she could resume nursing, particularly as a medication nurse, or working in allied areas which the lifting was not required because this would allow her to change—
Q. Dr. McKenzie, the lady has testified that she has done work I believe as a floor lady and as a clerk in TG&Y store, which, if I’m correct is a dime store—
A. Uh-huh.
Q. —or something of that — Do you think she’d be able to do clerical work in a dime store or department store or something of that nature or be a floor lady?
A. Well, I don’t know what a floor lady is. I think that she might have difficulty. Some of the dime stores require when a girl is on the floor that they start standing until they sit down which would be — It is a pretty good chore for anybody and she would have difficulty doing that.
Q. If this floor lady is kind of a supervisory job where she could sit down sometimes and stand up part of the time, do you think she could do that?
A. I think so.”

Dr. McKenzie re-examined appellant in October 1967, and as to this examination, he testified as follows:

“Q. 1 believe at this time 3mu stated 15 to 20 per cent, not to exceed 20 per cent and this would include anticipated changes that may occur following this sort of procedure. Is that correct?
A. Yes, sir.
Q. Anticipating the things that might happen to her why it was still in that range of 15 to 20 percent?
A. (Nods affirmatively).
Q. I believe you mentioned that such things as diminished sensation or reflexes in the lower extremities and the sciatic notch tenderness would not, in and of themselves suggest disability, but I believe you used the term ‘physical impairment.’ Would you outline what impairment is involved? What you meant bjr impairment if you recall that portion of your testimony or if I’m stating it correctly?
A. Well, a physical impairment is — it’s an impairment of her physical ability to perform the normal activities that the body was designed for.
Q. Such as what? Walking?
A. "Walking, sitting, holding it together — I mean there are just numerous functions. Now then her impairment is that in her particular situation that she’s got a fused lumbosacral joint which in turn takes away a little bit of the motion of the lumbar spiue. The lumbosacral joint normally has less motion than the other lumbar joints and so the amount of lost motion insofar as that joint is concerned is decreased. The fact that her ankle jerk in itself is not perfect is not an impairment. It is a sign that there is some disturbance in the reflex arc but we will see some people who normally at times will not show a reflex at all and they’ve never liad anything wrong with them. So, I mean this is not a valid criterion for impairment and she has shown on up until later in her course that she has some atrophy of her right calf compared to left and this is a good objective finding that there has been impairment of the nerve function to the leg. Now this has come back within an eighth of an inch which means that so far as function is concerned there is very little functional impairment, in that sense.” (Emphasis supplied.)

Dr. R. H. Whitehead, a specialist .in psychiatry, testified as to neurotic overlay in appellant’s condition upon his one examination. His testimony was not considered by the referee and it was stated in oral argument in answer to specific questions, that no claim was made for traumatic neurosis.

Several medical reports were accepted in evidence, but they were all progress reports and contribute nothing of a substantial nature to the evidence relative to permanent disability. Dr. Horace Murphy, an orthopedic surgeon, examined the appellant and although his x-ray examination failed to reveal the fusion between the fifth lumbar vertebra and the sacrum, his testimony on permanent partial disability is as follows:

“Q. After that examination, did you conclude that the woman had any permanent disabilit}*' and, if so, how much?
A. In my report of May 23rd, I felt as though Ihe patient had twenty per cent disability as related to the body as a whole.
Q. Dr. Murphy, is that rating addressed to the amount of permanent, physical impairment she has? Does it include anything other than physical impairment? This figure, this twenty per cent that you just mentioned.
A. The figure is the disability which is associated with the patient’s having restriction of motion, having had a disc operation, presumably, at the L-5, S-l level; and absent ankle jerk; limited bilateral straight leg raising. These are the physical impairments which I think dictate this extent of disability.
Q. Mrs. Ray, as you know, was at the time she was injured a practical nurse, and her duties involved a certain amount of lifting and the supporting of elderly patients in the nursing home where she worked. In your opinion, on the occasion of your last examination of Mrs. Bay, could she return to those duties with the expectation that she could perforin them successfully?
A. All I can say is that by the examination which I conducted of Mrs. Ray, with the stiffness in her back and her inability to bend, associated with the discomfort of straight leg raising, I don’t think she could do this type of work which, from my own patients, whom I have examined, have told me that it is a difficult job.”

On cross-examination, Dr. Murphy testified as follows :

‘‘Q. Dr. Murphy, along that line, of course, as a practical nurse doing the type of work she would be required to do in lifting patients, would it be fair to say that that would be classified as heavy lifting?
A. I think it really is, yes.
Q. But, by the sqme token, there would be certain employment in her condition and with the disability rating which she had which she would be able to perform.
A. Yes. Let me see if I can clarify this. There are various functions involved. For example, a woman who is going to, perhaps, sit at a desk and do certain paper work which is necessary, who is going to bring water to the patients, or who is going to give them their baths — this type of thing, I think she could do. Now, conversely, if she is required to lift the patient to the standing position and then sit him on the bedroom commode; if she is supposed to put him in his wheel chair; these are a strain on a good back and this she cannot do.
Q. Let me ask yp„u this. Here is a statement that Dr. McKenzie made at the hearing with reference to what we are talking about, and this was his answer:
‘I think she could perform activities, most any activities which requires use of her upper extremities, activities in which a person is allowed to change position frequently — ’ they’ve got ‘infrequently’ but I think they meant ‘frequently’ — ‘from a sitting to a standing position or some type of work that she can get up and move about, providing she didn’t have to manipulate patients, she could resume nursing, particularly as a medications nurse or working in allied areas in which the lifting was not required, because this would allow her to change.’
A. I think we have said almost identically the same thing.
Q. Both of you have said the same thing.
A. Yes, both of us have said the same thing.”
Dr. Murphy sums xxp as follows:
“Q. Now that you have all of the information that Mr. Rawlings has so comprehensively developed, are any of your opinions and conclusions as to the extent of this woman’s permanent physical impairment in the activities in which she can now engage, that is those opinions and conclusions which you expressed earlier today, are they changed in any way or altered?
A. No. I have simply evaluated this patient on the basis of what I saw in her — the stiffness in the back, the change in the reflexes and sensation, and the effect of straight leg raising on her back — and I have stated before and outlined what I thought she could and couldn’t do; and I still think her disability is as reported, twenty per cent of the body as a whole.
Q. But, medically, if she fell in 1963 and had been having back trouble since 1956, and if she fell again around June of ’66, medically you couldn’t divide it up and say how much of this twenty per cent is attributable to one thing- — to the fall in ’63, or the back trouble in ’56 — could you, Doctor?
A. I don’t think Solomon could, so far as that is concerned. All I say is that when I saw her and examined her, what I saw was a woman twenty per cent disabled.”

The appellee earnestly contends that a substantial portion of such residual disability as appellant does have, is a result of disease and accidental injuries suffered and sustained by the appellant prior and subsequent to the injury sustained in the course of her employment by the appellee. Dr. Murphy answers that argument with the observation that even Solomon could not differentiate one from the other.

The record indicates that the appellant was doing her work in a satisfactory manner while employed by the appellee prior to her injury. As to prior injury resulting in noncompensated disability, industry takes an employee as is. Regardless of other falls or injuries subsequent to surgery in this case, the defective disc was removed by surgery, the defective disc space was spanned by surgical fusion and the fusion was found to be solid upon final examination and discharge by the attending physicians. One disc and one fusion were all that was involved in this case.

There is considerable controversy between the parties in this case as to whether the medical testimony pertaining to a 20% permanent partial disability relates to functional disability consisting only of physical limitation in the normal functional use of the body, or whether the doctors considered, and were also talking about, the statutory definition of disability pertaining to loss in ability to earn in the same or other employment the amount of wages the appellant was receiving at the time of her injury.

Be that as it may, the medical evidence was the only evidence the referee or the Commission had to go on in arriving at their conclusions in this case. We recognize, as we did in Wilson & Co. v. Christman, supra, that the Commission is in a better position than is the doctor, to evaluate a claimant’s ability to earn in the same or other employment the same wages received at the time of injury. When the Commission once has before it firm medical evidence of physical impairment and functional limitations within the peculiar knowledge and specialty of the examining physician, the Commission then has the advantage of its own supeiior knowledge of industrial demands, limitations, and requirements, in weighing the medical evidence of functional limitations together with any other evidence of how the functional disability will affect the ability of the injured employee to obtain or hold a job and thereby arrive at a reasonably accurate conclusion as to the extent of permanent partial disability as related to the body as a whole. As an example, in the case at bar, Dr. McKenzie testified “well I don’t know what a floor lady is.”

The Commission’s knowledge and experience, however, is not evidence, and the Commission can only apply its own knowledge and experience of industrial requirements as a jury might do in weighing all the competent evidence pertaining to handicaps suffered by each individual claimant as a result of compensable injury, in arriving at the amount or percentage of overall permanent disability that individual has suffered as a result of the injury.

There is substantial evidence in the record before ns, that the appellant’s physical condition was still improving when last examined by the doctors, and there is nothing in the record to contradict the referee’s finding that the appellant was a good candidate for rehabilitation. Regardless of whether the 20% permanent partial disability established by the medical evidence pertained to loss of physical function, or pertained to the appellant’s loss in wage earning capacity, there is no substantial evidence in the record that appellant’s permanent partial disability exceeds the 20% estimate contained in the medical evidence. The evidence of permanent partial disability in this case, aside from medical evidence on limitation of motion, boils down to appellant’s own testimony that she has to lie down a lot, and the doctors’ testimony that she cannot lift heavy objects in general and bed ridden or elderly rest home or hospital patients in particular.

While it is true that over $7,000.00 was spent in medical treatments for the appellant while she was receiving less than $2,000.00 in compensation payments, the amount and duration of compensation payments are limited by statute and medical expenses are not. Unless we could say as a matter of law, that in any industrial injury case a permanent loss in ability to earn must always follow, and exceed at least in some degree, the permanent loss in the functional use of the body as a whole, we must hold under the evidence in the case before ns, that the judgment of the trial court must be affirmed. We are unable to announce such rule of law, so the judgment of the circuit court is affirmed.

Affirmed.


source: Caselaw Access Project

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

license: Public Domain

text:
    Noel Cockrum v. Charles Pattillo
    5-4682
    439 S.W. 2d 632
    Opinion Delivered April 7, 1969
    [Rehearing denied May 12, 1969.]

      Spitzberg, Mitchell & Hays for appellant.

      Virgil Moncrief and John Harris Jones for appellee.
   Conley Byrd, Justice.

This action was commenced in the trial court by appellant Noel Cockrum to recover the balance due on a contract for the sale of used cars, furniture, fixtures, office equipment, parts, and signs, comprising Cockrum Motor Company, together with $235 rent per month accruing on a building. Appellee Charles Pattillo answered admitting the contract. He counterclaimed alleging that Cockrum fraudulently misrepresented the past income of the business and the value of the used cars, equipment, etc., resulting in overpaymont and losses for which Pattillo was entitled to recover from Cockrnm. The trial court found for Pattillo and awarded him judgment against Coekrum for $20,-603.24. Por reversal Coekrum relies upon the following four points:

1. The court erred in finding that the transaction was tainted with fraud and in failing to award the appellant a judgment on the contract.

2. The court erred in failing to hold that the appellee had waived the alleged fraud and ratified the contract.

3. The court erred in cancelling the rental portion of the contract between appellant and appellee by reason of fraud.

4. The court erred in awarding damages to the appellee upon the evidence introduced by the appellee.

The facts shown in the record and the issues raised here are set forth in an opinion filed by the trial court. The trial court’s opinion is as follows:

“The pleadings consist of a complaint by Noel Cock-nun, hereafter referred to as plaintiff, with an attached contract and supplemental sales contract signed by plaintiff and defendant, Charles Pattillo, hereafter referred to as defendant, an amendment to the contract signed by plaintiff and defendant, the date of which is not shown, a receipt dated May 6th for $2,661.50 paid by defendant to plaintiff and a receipt dated May 18, 1964 for $2,317.93 paid by defendant; and answer and cross-complaint was filed by defendant in due time. A motion to strike answer and cross-complaint was filed by the plaintiff to which defendant filed a response. Plaintiff filed his answer to cross-complaint in which plaintiff admitted he agreed to charge defendant one half of the cost of office fixtures and equipment, denied the other allegations, pleaded that there was an account stated between the parties and that the defendant was barred by laches from alleging fraud. The defendant filed an amendment to the answer and cross-complaint and likewise amendment was filed to the complaint reducing the amount due under the contract from $12,-713.64 to $10,000. That a motion to require production of records was necessary to be heard and plaintiff required to submit to the defendant the said record. A second amendment to answer and cross-complaint was filed by the defendant. Likewise amendment to the motion to require production of certain documents was filed by defendant. The plaintiff propounded 27 interrogatories to defendant which were duly answered. John Harris Jones, one of the attorneys for the defendant filed an affidavit for the production of certain records prior to trial which had been ordered by the court at a pretrial hearing.
“The contract in question was drawn personally by the defendant. Exhibits upon which the contract was based, i.e., inventory of furniture and fixtures, shop equipment and automobiles were prepared by the plaintiff or at his direction. Contract as signed called for the payment of $30,000 at the time of the execution but was amended apparently on the same day by the parties and $20,000 was paid by defendant to plaintiff and an agreement to pay the balance as set forth in the amendment to the contract. Defendant was obligated to pay for second-hand cars and to rent from the plaintiff the building and grounds for the sum of $235 monthly for a period of five years with certain options in the contract. Defendant paid $2,661.50 on May 6, 1964 and May 18, 1964, $2,317.93.
“PARTIES
“The parties later agreed that the inventory of used cars supplied by the plaintiff to the defendant were overpriced and jointly agreed to a reduction of $4,928.78. The parties were negotiating for a settlement of other features of the contract which the defendant claimed was improper when negotiations were broken off and this action was filed. Plaintiff Noel Coekrum sued for the amount due under the contract as amended and for the rent on the building that had accrued.
“Defendant in his answer and cross-complaint alleged fraud in the execution of the contract and concealment of the facts and prayed for a judgment in damages of $78,577.57, for the cancellation of the lease agreement. The claimed damages consisted of the following items, to-wit: 'The repayment of $8,877.57 alleged overpayment and for damages $39,800 actual loss and $30,000 loss of profits.
“The proof was intricate and voluminous. By stipulation in open court at the conclusion of the testimony a transcript of the evidence was to be made by the court reporter and a copy furnished to each side and the expense thereof to be charged equally, provided in 1he event of an appeal by either side the amount so paid the reporter would be credited upon the appellant’s cost.
“Excellent briefs have been filed by both sides.
‘ ‘ There is no dispute about the execution of the sale contract or the adjustment that was agreed upon by the parties and the amount due thereunder if there be no fraud.
“Defendant claims that he was fraudulently induced to sign the contract through misrepresentation of some facts and concealment of other facts.
“Plaintiff denies fraud. 342 pages were required to record the testimony taken at the trial. During the trial when it developed that the many secondhand cars which were sold, resold, repossessed, ‘traded down’ etc., produced a volume of detail that was more than should be heard by a court with a full docket without benefit of a master, the court offered, if agreeable to both counsel to appoint a master and let him pursue all of the involved and intricate matters and make a record of his investigations, submit the same to the court along with his recommendation. This offer was refused and the court did the best possible under the circumstances to get at the facts involved in this intricate transaction in the time available.
“It appears that plaintiff was a second hand car dealer for a few years and then secured the franchise for the .sale of Ramblers and other cars made by the American Motor Company. The Rambler operation was not successful for the first couple of years. Then for two years the income returns of the corporation showed a substantial profit.
“The plaintiff owns extensive farming interests from which at times he received excellent returns. The income tax records of the farm as well as the motor company are in this record. They show that the first years when the Cockrum Motor Company, hereafter referred to as the motor company, lost money, the farm income was quite substantial and in the two years that the motor company paid tax upon its profits the farm income was markedly reduced. The tax return for the final year of the motor company which was filed after the sale was consummated showed a loss of $26,519.50. The plaintiff’s counsel explained in the brief that this loss was a result of inflation of the value of the assets at the time the corporation was formed and could not be considered in determining whether or not the corporation was operating profitably.
“The plaintiff decided to dispose of the motor business and negotiated with several people, one of whom testified — Mr. Ray Crosby of Stuttgart.
“Defendant testified that the plaintiff told him the business was making from $10,000 to $15,000 per year. The plaintiff admitted on the stand that he had told defendant that the business would make a thousand dollars per month.
“The defendant testified that the plaintiff knew the defendant was ignorant of the automobile business and told the defendant that the plaintiff had a sufficiently well trained organization to permit the business to operate itself with but little supervision. Plaintiff testified that he never told anyone that an unsupervised business would run itself.
“This and other testimony about negotiations and so forth prior to the signing of the contract by both imrti.es was admitted under the rule laid down in Arkansas Amusement Corporation v. Kempner, 182 Ark. 897, 88 S.W. 2d 42, (1930), where it was held,
“ ‘It is the settled rule in this state that parol evidence of conversations and negotiations leading up to the execution of a contract, as well as the relation of the parties thereto and the attendant circumstances to explain and aid in the interpretation of uncertainties and ambiguities contained in writing, may be admitted.’
“This rule was discussed and approved in the recent case of Jefferson Square v. Hart Shoes, Inc., 239 Ark. 129, 388 S.W. 2d 902 (1965), where it was said,
“ ‘ In reaching the result * * * that where there is any doubt or ambiguity about the meaning of a contract it ■will be resolved against the party who prepared it — and it is conceded that appellant prepared the lease contract here under consideration. However the rule just mentioned is not to be applied until and unless a “doubt” exists after the court has given consideration to the parol evidence referred to in the Kempner case, supra.’
“CAN DEFENDANT RECOVER DAMAGES?
“Where fraud or deceit exists in a transaction the one who is deceived must act promptly to have the contract set aside or he will have waived his right. The defendant did not act promptly in this transaction after he discovered the fraud so the original contract cannot at this time be revoked.
“Does that mean that the defendant is not entitled to damages suffered by the fraud? The answer is found in McCormick v. Daggett, 162 Ark. 16, 257 S.W. 358 (1924), quoting from headnote,
“ ‘It does not follow that because purchaser of land looses his right of rescission for fraud by failure to diligently disaffirm, that he has no right or recoupment for damages for deceit.’
“The late case of Kotz v. Rush, 218 Ark. 692, 238 S.W. 2d 634 (1951), contains similar facts.
“In that case the buyer bought a business on the White River in Carroll County located on IT. S. Highway 62 which had cabins and a store and various paraphernalia used in operating a fishing camp. The seller represented that the business was making $6500 per year. The plaintiff attempted to foreclose his mortgage and the buyer, defendant, cross-complainecl for damages for deceit and fraud. The defendant had not sought a rescission of the contract.
“The Chancellor found for the defendant in the sum of $8,000 and directed it be credited on the mortgage. In affirming the trial court the opinion states:
“ ‘The authorities generally seem to recognize the rule that false representations by the seller as to present or past income of the property sold or conveyed will, if relied upon by the purchaser, constitute actionable fraud. The following statement is found in 23 Am. Jur., Fraud and.Deceit, § 68: “A false representation by an owner of land, or bis ageixt, seeking to dispose of the property commercially, as to the present or past income, profits, or produce thereof or as to the amount of rent received therefor is regarded as a statement of fact upon which fraud may be predicated if it is false, since these are matters within the representor’s own knowledge. The same is true of an assertion that the profits of a business are or have been a certain sum annually, or a false statement as to what a business now earns.” See also, Williston on Contracts, § 1492; 55 Am. Jur., Vendor and Purchaser, § 84; Hecht v. Metzler, 14 Utah 408, 48 P. 37; Whitney v. Bissell, 75 Ark. 28, 146 P. 141, L.R.A. 1915D, 257; Cross v. Bouch, 175 Cal. 253, 165 P. 702; Hogan v. McCombs Bros., 190 Iowa 650, 180 N.W. 770; Vouros v. Pierce, 226 Mass. 175, 115 N.E. 297.’
“Thé opinion further states:
“ ‘The remedies of a purchaser in cases of this kind are set forth in Danielson et al v. Skidmore, et al, 125 Ark. 572, 189 S.W. 57, 58 as follows: “He may rescind the contract, and by returning or offering to return the property purchased within a reasonable time entitle himself to recover whatever lie had paid upon the contract. Again, he may elect to retain the propert3r and sue for the damages he has sustained by reason of the false and fraudulent representations, and in this event the measure of his damages would be the difference between the real value of the property in its true condition and the price at which he purchased it. Lastly, to avoid circuity of action and a multiplicity of suits, he may plead such damages in an action for the purchase money, and is entitled to have the same recouped from the price he agree to pay. Matlock v. Reppy, 47 Ark. 148, 14 SS 546; Fort Smith Lumber Co. v. Baker, 123 Ark. 275, 185 S.W. 277.’
“ ‘Appellee chose the last remedy mentioned above and the only issue is whether the chancellor’s findings are against the preponderance of the evidence.”
“DID PLAINTIFF COCKRUM FRAUDULENTLY INDUCE DEFENDANT PATTILLO TO SIGN THE CONTRACT?
“Each of the parties were sui generis. Each of them is an intelligent and successful business man in his own field. The defendant operated two insurance agencies, one in DeWitt and one in Stuttgart successfully. The plaintiff was a second hand car dealer before he secured the automobile agency. And in addition he had a good sized farm. Neither had any legal assistance so far as the record shows. These parties had been friends for more than ten years prior to the execution of the contract sued upon. Defendant handled most of the insurance business of the plaintiff, lie claims 80% and plaintiff did not deny it. They drank coffee together often, went to football games together and visited in their respective homes at various times. DeWitt is a small city where most of the knowledgeable people know most of the details about the people with whom they associate. Plaintiff should have known that defendant was uninformed about the automobile business, that defendant was in the business of writing hazard insurance. After operating the used car business for several years plaintiff secured the Rambler franchise. He organized Cockrum Motors, Inc. with assets capitalized at $50,000.
“The Rambler operation was not successful for its first two years. The explanation for this, offered by the plaintiff is that all automobile companies have good and bad years. Plis farming operation was profitable. The two years immediately before the sale of the business to tlie defendant, Cockrum Motors Inc., hereafter referred to as the motor company, paid substantial income taxes. The returns showed it was making a substantial profit.
“It is a coincidence that when the motor company made the profit, farm income fell off remarkably. The plaintiff was in an advantageous position of being able if he wished, to transfer funds from farm to company and back. He admitted he had followed this practice in his testimony. The results of this practice would be that if he chose to pay the income tax due, through the motor company it would mean but little change in his overall tax liability for the farm income would be reduced.
“If a man wished to dispose of a business, it would be advisable for him to show that it was earning a profit. The most convincing way would be to pay income taxes to the government.
“It is in the record that the plaintiff wished to sell the business; he approached several persons, one of whom, Mr. Ray Crosby of Stuttgart, testified that plaintiff tried to sell it to him.
“The defendant testified that the plaintiff told him (hat the business was making from $10,000 to $15,000 per year; that the organization he had needed little supervision to run the business. Plaintiff admitted telling the defendant that the business would need but little supervision. If there was no other testimony on this point then the court must find for the plaintiff because fraud is never presumed and of course the one alleging it has the. burden of proving it to the court’s satisfaction. In the case of Rose v. Moore, 196 Ark. 527, 118 S.W. 2d 870 (1938), the court said,
“Fraud is never presumed, and the burden is upon the party alleging fraud, to prove it by preponderance of evidence.’ See also, the following cases to the same effect, to-wit: Green v. Bush, 203 Ark. 883, 159 S.W. 2d 458; Biddle v. Biddle, 206 Ark. 623, 177 S.W. 2d 32; Ellis v. Ellis, 220 Ark. 639, 249 S.W. 2d 302, and many other cases.
“To support Ms allegations the defendant called Mr. Pay Crosby of Stuttgart, a heavy machinery contractor, who testified that the plaintiff had tried to sell the business to him; that plaintiff had stated the business was making from $10,000 to $15,000 annually; that the manager or bookkeeper and crew that plaintiff had were capable of operating the business. Crosby was interested in acquiring a business because he had two boys for whom he wished to provide a business and he thought this would be ideal for that. Pie even discussed with plaintiff, the idea of fixing a place for him to rest because Crosby wanted him to look after the business if he bought it, while his boys would be learning how to operate it.
“This to some degree substantiated the defendant’s testimony on this line. The strange see-saw effect between the farm income and the income of the motor company is another circumstance, when one was down the other was up and vice versa. Plaintiff was asked on cross-examination to explain this. He did not refer to poor crop years, to storm damage, to insect loss, to adverse weather condition, such as being too dry or too wet, or raining at the wrong time which ordinarily farmers use to explain their failure to make good crops. The only explanation that plaintiff gave was lack of management of the farm.
‘ ‘ That plaintiff knew something was wrong is shown by the fact that when challenged bjr defendant about the list of cars given to Mm as the basis of the contract price and that it vTas not the list of cars that plaintiff and his manager had used and priced out plaintiff agreed to a reduction of almost $5,000 and was very careful to include in the statement signed by both of them that this was to rectify ‘ail honest mistake made in computing the value of the used cars sold * * *’. It is most praiseworthy to correct mistakes, honest or otherwise, but it is evident that the plaintiff was anxious to have the record show that it was ‘an honest mistake.’ It is seldom necessary for an honest man to proclaim his honesty.
“THE DEFENDANT
“It was the plaintiff’s manager who had been retained by the defendant who called defendant’s attention to the fact that the list of cars had been overpriced and was not the list that manager and plaintiff had gotten up according to defendant’s testimony. There were other items which defendant claimed were overpriced according to the agreement that he had with plaintiff and about which the plaintiff had said that he would do ‘the right thing.’ One of these overpriced items was the following example. Proof showed that the building and equipment were acquired by plaintiff for $8,000. Two hydraulic hoists and a wheel aligning machine which were acquired by plaintiff with purchase of the building were attached to the building and were retained by plaintiff. Plaintiff set original cost of building in his depreciation schedule in the II. S. Income Tax Return at $6,359.46 with addition of $2,900.00 at total of $9,159.46.
“The machine shop equipment original cost was shown as being $3,823.77.
“On lists from which contract was drawn the cost of the equipment is shown so much higher that the agreed 50% was much greater than the original reported to the Internal Revenue Service. Negotiations for an adjustment of these items were carried on for some time but broken off before they were concluded.
“It is probable that no one circumstance by itself would be sufficient to sustain the allegation of fraud. But all of these circumstances taken together with the admitted fact that plaintiff wanted to sell and was trying to sell the business to others and to at least one other person had made some or similar allegation about the amount the business was earning and the operating crew’s ability to run the business without much supervision, coupled with the fact that the parties had been friends for more than ten years prior to the sale and the further fact that plaintiff knew that the defendant had no knowledge of the automobile business and the further fact that the plaintiff had lost money in the business for two consecutive years and only did show a profit in the business when his farm income went down materially leads the court to believe that plaintiff deliberately overreached in his dealing with his friend, the defendant.
“ ‘While fraud need not be shown by direct or positive evidence but may be proven by circumstances, it must reasonably follow from the circumstances proved.’ Biddle v. Biddle, supra.
“ ‘Fraud may be proved by circumstantial evidence, if it affords clear inference of fraud and more than a mere suspicion or conjecture.’ Renn v. Renn, 207 Ark. 347, 179 S.W. 2d 657.
“The court finds that the contract and amendment attached to it are tainted with fraud.
“The contract was executed in December of 1963 and two payments totaling the sum of $4,979.43 were made by defendant on or before May 18, 3964. If those payments were made by defendant after he knew or should have known that his contract was fraudulent his action in making the payment would have validated the contract.
‘ ‘ On the stand defendant said when asked about the fact that ho had signed a statement rectifying the ‘honest mistake’ about the valuation of cars and the payments of these two amounts, ‘I still thought that Cock-nun was honest and would do the right thing.’ It was the manager, defendant claimed who called his attention to the overpricing of the cars. It was not discovered by defendant. (It seems that the defendant was still ignorant about the automobile business.) No evidence was offered to contradict this by the plaintiff, that the defendant still considered plaintiff honest with him. The court finds that the payment by defendant of the two payments in May of ’64 and the signing of the writing reducing the amount due on the used cars did not waive or ratify the fraudulent character of the original contract.
“The defendant in his cross complaint asked for $8,777.57 for alleged overpayment and $39,900 for actual damages or a total of $48,577.57. In addition the defendant asked for $30,000 for loss of profit.
“The court disallows claim for any loss of profit and finds that the defendant has suffered damages in the sum of $25,000. Said sum shall bear interest at the rate of 6% per annum from this date until paid.
“BENT
“The contract provided the defendant should rent the building aud premises from the plaintiff for $235 per month for a minimum of five years with certain options of renewal and purchase granted to the defendant. There is no evidence that the defendant has surrendered the premises to the plaintiff. Defendant claims to have stopped paying rent in August of ’66 and plaintiff says defendant stopped paying rent in June of the same year. No evidence is offered that the rent is too high or out of line with rent being charged for like buildings and premises similarly located. The court finds the defendant to be liable for the monthly rental at said rate from July 3, 1966 until this date on a quantum meruit basis. That a judgment for said rent shall be offset against defendant’s judgment.
“The contract being tainted with fraud the obligation for further rentals from the defendant to the plaintiff are hereby cancelled and set aside.”

POINT 1. In arguing that tlie trial court erred in finding the transaction was tainted with fraud, Cock-rum says that Pattillo simply bought a business that he was indisposed to oversee, made very little attempt to manage and after losing money attempted three years later to charge Cockrum with the folly of his own mismanagement and then only after Cockrum had sued for the balance due on the contract. We find appellant's assertion to be without merit.

In addition to the testimony recited in the trial court’s opinion there are many instances in which Cock-rum’s testimony, in itself, supports the trial court’s finding of fraud. For instance, it was shown that on Oct. 6, 1961, he made a $4,000 deposit from himself to the Motor Company. His explanation was that the $4,000 was for a combine traded for a car valued at $1500, an International truck valued at $1000, a Chevrolet truck valued at $850 and one International truck valued at $650, all of which equipment went to the farm. However, notwithstanding Cockrum’s assertion that the equipment went to the farm, he was unable to explain why no depreciation for the equipment was shown on his income tax returns.

At the trial, Cockrum testified that the May adjustment, resulting in the $5,000 deduction from the original contract price, occurred when he and Wayne Fisher adjusted the inventory of used automobiles down to the black book average wholesale price. According to Cock-rum the valuation after this adjustment would have been $20,<885. However Felix Stephenson, a Ford dealer, applying black book values to the same inventory, arrived at a value of $10,465, less the cost of repairs to the vehicles involved. Thus in addition to the facts related in the trial court’s opinion, there is much in the record which adversely reflects on the credibility of Cockrum’s testimony. Without elaborating further, we are convinced that the trial court correctly found that Cockrum induced Pattillo to enter into the contract by falsely representing tliat the motor company had been mailing a profit of $10,000 to $15,000 per year.

• POINT 2. It is true that on May 3, 1964, and again on May 18, 1964, Pattillo made two installment payments totalling about $5,000, and at the same time an adjustment of approximately $5,000 was made in the total contract price by Cockrum with Pattillo’s consent. It is also true that Pattillo for a number of months made the $235 monthly rental payments due under the contract! Based upon these payments Cockrum argued that Pattillo lias waived the fraud.

We cannot agree with Cockrum’s contention. The authorities make clear that before such payments will constitute a waiver it is essential that the victim have full knowledge of the fraud practiced upon him, that he intend to affirm the contract, and abandon his right to recover damages for the loss resulting from the fraud, Southark v. Passes, 221 Ark. 612, 254 S.W. 2d 954 (1953). Pattillo's testimony was that he knew nothing about Cockrum’s fraud when he made the May 3rd and May 18th, 1964, payments. In fact he said he did not know what was really happening until two years later. Further, Mrs. Wilson testified that she worked for Pattillo Motor Co. from Sept. 1964 through Feb. 1967 and was present during the discussions between Mr. Pattillo and Mr. Cockrum about adjustments. Therefore under the circumstances the record does not support Cockrum’s contention that Pattillo made the payments with full knowledge of the misrepresentations. See Parker v. Johnston, 244 Ark. 355, 426 S.W. 2d 155 (1968).

POINTS 3 & 4. On the damage issues, Cockrum alleges that Arkansas is committed to the so-called “out of pocket” measure of damages in fraud cases, that there is no testimony as to the true value of the properties Pattillo acquired from Cockrum, and that the trial court erred in cancelling the balance of the rental contract.

We do not agree with Cockrum that this court is committed to the “out of pocket” measure of damages in fraud cases. In Union Motors Inc. v. Phillips, 241 Ark. 857, 410 S.W. 2d 747 (1967), and in Greiner Motor Co. v. Sumpter, 244 Ark. 736, 427 S.W. 2d 8 (1968), we recognize the so-called “benefit of the bargain” rule of damages in fraud cases. In the early case of Morton v. Scull, 23 Ark. 289 (1861), we specifically held that one damaged because of fraudulent representations about the qualities of a slave was entitled to recover not only the difference between the value of the slave as he was. addicted to running away, and as he would have been, free from that vice, at the time and place where he was bought, but also to the damages caused by the Negro’s habit of running away, such as expenses incurred by his capture.

Thudium v. Dickson, 218 Ark. 1, 235 S.W. 2d 53 (1950), involved a fraudulent misrepresentation relative to the water supply to irrigate a rice crop. We there permitted the tenant to recover the difference between what the land produced and what the land would have produced if -water had been available, less the cost of production and marketing, — i.e. the same damages that would have been recovered upon a breach of contract, citing and relying upon Gibson v. Lee Wilson & Co., 211 Ark. 300, 200 S.W. 2d 497 (1947).

In Miles v. American Railway Express Co., 150 Ark. 114, 233 S.W. 930 (1921), Miles shipped a dog’s head packed in ice from Bald Knob to Little Rock for examr ination to determine whether the dog had rabies. Miles alleged that he told the railroad agent the dog had bitten his daughter and the specific purpose for which the head was being shipped to Little Rock. We held the Express Company was liable for the expenses incurred in giving Miles’ daughter the Pasteur treatment for rabies because the company might have reasonably anticipated that Miles would be put to that expense if the package containing the dog’s head should not be promptly delivered to its destination.

In 37 Am. Jur. 2d, Fraud and Deceit § 362, p. 490, it is pointed out that in fraud cases, in addition to general damages, a purchaser may be entitled to recover special or consequential damages which are the natural or proximate result of the seller’s fraud. We believe that this rule is supported by our cases cited above. The purchaser in the Morton case (above, certainly would not have been made whole by recovering the difference in the value between the slave as he was and as he would have been made whole by recovering the difference in i.e., the expense incurred in the capture of the runaway slave may have exceeded his value as was. For cases from other jurisdictions applying the same rules see McInnis & Co. v. Western Tractor & Equipment Co., 67 Wash. 2d 965, 410 P. 2d 908 (1966). When we apply this rule to the facts here under consideration we find that there is ample evidence to sustain the damage award and the cancellation of the lease contract for the balance of the term.

From the testimony of Noel Bates and Felix Stephenson, together with the exibited “black book”, it is obvious that the wholesale value of the used cars was not correctly represented to Mr. Pattillo at the time of their transaction or at the time of the adjustment some six months later. Furthermore, from Mr. Coekrum’s own records and admissions in his pleadings about the method of fixing the purchase price of shop equipment and office equipment, it is obvious that the price with which Mr. Pattillo was originally charged is not based on the cost price to Mr. Coekrum. When all of these adjustments are taken into consideration a preponderance of the evidence shows that the total value of the items purchased by Mr. Pattillo could not have exceeded $16,-222.43. Since Mr. Pattillo had already paid Mr. Cock-rum $25,000 it follows that he had overpaid, because of the false representations, the sum of $8,777.57,

Since the contract between Mr. Pattillo and Mr. Cockrum obviously contemplated that Mr. Pattillo would operate the automobile business in Mr. Cockrum’s building for which Cockrum would collect a monthly rental, it obviously follows that Mr. Pattillo would have to supply working capital for day to day operation, including payroll. In this connection, Mr. Pattillo, his accountant and secretary testified that he had plowed in excess of $30,000 into the business for operating capital which he had lost at the time of trial. The only criterion for allowance of such damages is that they not be speculative. Here again we find that Cockrum’s own records remove the speculative nature of the losses sustained by Pattillo, particularly within the limits found by the Chancellor. Cockrum’s records show that before he began pumping farm income into the motor company, the motor company was losing about $7,500 each year. When we take from the $25,000 damages allowed by the Chancellor the $8,777.57 overpayment, we find that the difference does not exceed the $7500 annual loss sustained by Cockrum when multiplied by the two and half years Patillo was in business. On this basis we find that the damage allowance was proper, as the natural and proximate result of Mr. Cockrum’s fraud.

"Wlmt we have heretofore said about operating losses holds true with respect to the balance of the rental contract. The rental contract was tied to the purchase and operation of the automobile business. Since any liability of Pattillo for subsequent rental under the rent contract would be consequential damage proximately resulting from Cockrum’s fraud, it follows that the two items offset each other and that trial court was right in cancelling the balance of the rent contract.

Affirmed.

Brown and Fogleman, JJ., dissent.

John A. Fogleman, Justice.

I concur in all of the majority opinion except that part having to do with the rental contract for the building and premises. The chancellor found that there was no evidence that appellee had surrendered the premises to appellant, even though he stopped paying rent sometime in 1966. As stated by the chancellor, no evidence was offered that the rent was too high or out of line with rent being charged for like buildings and premises similarly located. The only reason for cancellation of this rental contract was the statement of the trial judge that it was tainted with fraud.

The trial court and the majority have given appellee his full measure of damages for fraud. In addition, they are allowing him to have a partial rescission of the contract. That the rental contract was part of the whole contract is a matter not open to question. Thus, he has been fully compensated in damages on a recoupment and thereafter given a part of the remedy of cancellation as if he had sought rescission. Appellee had the choice of remedies. He chose recoupment which entitled him only to recover damages. The rule is well stated in Danielson v. Skidmore, 125 Ark. 572, 189 S.W. 57 and quoted in Held v. Mansur, 181 Ark. 876, 28 S.W. 2d 704, where the court said:

“A person who has been induced to enter into a contract for the purchase of property by the false representations of the vendor concerning its quantity or quality may, at his election, pursue one of three remedies. First, he may cancel the contract and, by returning or offering to return the property purchased within a reasonable time, entitle himself to recover whatever he had paid upon the contract. In the second place, he may elect to retain the property and sue for the damages he has sustained by reason of the false representations of the vendor as to the land; and in this event the measure of the damages would be the difference between the real value of the property in its true condition and the price at which he purchased it. In the third place, to avoid a circuity of actions and a multiplicity of suits, he may plead such damages in an action for ’the purchase money, and is entitled to have the same recouped against the sum he had paid for the land. ’ ’

The rental for which appellee would subsequently become liable could not in any sense of the word be consequential damages for fraudulent inducement. In the absence of evidence to the contrary, it must be assumed that the contract was for the rental value of the property. Thus, there is nothing against which liability for rent can be offset, since the appellee has been awarded the full measure of his damages under the remedy he elected.

I would modify the decree by disallowing the cancellation of the rental contract but would affirm it in all other respects.

Brown, J., joins in this dissent.

      The general rule in regard to the effect of this election of remedies in a case like this is stated in Lacey v. Edmunds Motor Company, 269 Ala. 398, 113 So. 2d 507 (1959). There it was said the buyer must elect between his remedies and may not combine them.


text:
    Hubert A. Gilmore, et al v. Lawrence County, Ark.
    5-4718
    439 S.W. 2d 643
    Opinion Delivered April 7, 1969
    [Rehearing denied May 12, 1969.]

      Hodges, Hodges & Hodges for appellants.

      D. Leonard Lingo and Harry L. Ponder for appellee.
   Conley Byrd, Justice.

Appellants Hubert A. Gilmore, et al, taxpayers of Lawrence County, appeal from the tax adjustments of the Lawrence County Board of equalization on rural farm lands for the year of 1966. For reversal of the circuit court decree, appellants rely upon the following points:

1. The action taken by the Lawrence County Board of Equalization was the assessment of property instead of the equalization of property, and the board was without statutory authority to assess and its actions were therefore void.

2. The Board of Equalization of Lawrence County was without statutory authority for the action taken by it from January, 1966, to July 31st, 1966.

3. The County Clerk of Lawrence County failed to serve as secretary for the Board of Equalization of Lawrence County and did not keep a complete and accurate journal of its proceedings.

4. The Lawrence County Board of Equalization was not constituted according to law.

5. The Board of Equalization failed to follow the statutory procedure in notifying rural real property owners in Lawrence County of the raise of valuation of their property.

The record shows that prior to Aug. 1, 1965, the assessment coordination department, pursuant to Ark. Stat. Ann. § 84-477 (Repl. 1960), notified the proper county officials of Lawrence County that the county’s ratio of total assessed value to market value was below the permissible limits — i.e., the percentage valuation of all the property was 18.05 percent of value while the rural property was assessed at 13.27 percent of value. Being fearful the schools in the county would lose their state turnback funds, the equalization board immediately looked into the matter. After excluding a flat percentage raise of rural values and the calling in of professional appraisers, the board elected to set up a uni'urni standard of valuations based on soil types, which, when applied to each tract of farm land, would result in each tract being assessed at 20% of its value. Since the tract by tract valuation according to soil types could not physically be done during the regular 1965 session it was decided to have a planning session in the early part of 1966.

Pursuant to plan, the equalization board met in late January or early February 1966, and began the tract by tract review of all assessed rural farm lands according to soil type. They fixed monetary values on various types of soil and arrived at the valuations which should be placed on each call by the total number of acres of each soil typo. The number of acres of each type were generally arrived at by use of Soil Conservation maps showing soil types and ASC aerial photographs, together with the board’s knowledge of the different areas in the county. Because of the volume of work involved, the board hired Mrs. Mildred Randolph to do the clerical work and caused her to prepare before Aug. 1, 1966, the notices required by Ark. Stat. Ann. § 84-707, (Repl. 1960). However the notices were not mailed until August 1, 1966, and at intervals thereafter.

The county assessor, independently of the board of equalization, completed an assessment book of all Lawrence County property upon essentially the same valuation used in 1965. This book was delivered in accordance with law to the board at its regular session commencing Aug. 1, 1966.

Point 1. To show that the action of the board was in reality assessment instead of equalization, appellants rely upon Lyman v. Howe, 64 Ark. 436, 42 S.W. 830 (1897). There the assessor’s roll showed that there was no assessment of the lot mentioned. We held that the action of the equalization board in placing a valuation on the property was void since it amounted to an assessment. In doing so, however, we pointed out that once the assessor has placed a valuation thereon then the board of equalization may equalize this valuation with Ihe average valuation of other land, by raising or reducing same as the case may require, so as to fix its true value.

The record here shows that the August 1, 1965, official ratio study of assessed values for Lawrence County, prepared by the Assessment Coordination Department, showed all property was assessed at 18.05% market value, with various types of property being assessed as follows:

Residential _____________________________ 20.00%

Rural --------------------------------------------- 13.27%

Commercial ___________ ....18.62%

Industrial ---------------------------- 20.38%

Personal Property _____________ ..20.92%

Utility Property _________________________________________20.00%

Thus it is seen that the rural lands were not carrying their proportionate share of the assessments according to value and that the burden was cast on someone to bring t-liem into line with other properties in the county as well as in the State at large. That this duty was cast upon the equalization board was recognized in Lyman v. Howe, supra. See also Pulaski County Board of Equalization cases, 49 Ark. 518, 6 S.W. 1 (1887), where we held that county boards of equalization could proceed without complaint first being made against the assessor’s returns and could act on evidence or on their own knowledge for the purpose of equalizing assessments. Consequently we find appellants’ first point to be without merit.

Point 2. In arguing that there was no statutory authority for the action taken by the board between January 1966 and July 31, 1966, appellants point out that tlie decision to send notice of increases in valuation pursuant to Ark. Stat. Ann. § 84-707 was made before the assessor’s report of the 1966 assessments was filed with the board. We agree with appellants that the record does show that the board had reached a decision during its planning stage, and as far back as the regular 1965 session, to raise the valuations of rural property in Lawrence County prior to August 1, 1966. However we must point out that it is not decision making by an equalization board before August 1st that is prohibited, but the raising or lowering of valuations. There is no showing in the record that any valuations were increased until the time the notices thereof were mailed out by the board. We find that the legislature recognized that planning sessions at which tentative decisions could be inade are a, necessity. See Ark. Stat. Ann. § 84-721 (Repl. 1960), which specifically provides that, “Said board shall be vested and charged with all the •powers and duties with which such board is vested and charged when meeting in regular session, . . .”

Point 3. We find nothing in the record to sustain appellants’ contention that the county clerk of Lawrence County failed to serve as secretary for the board and did not keep a complete and accurate journal of each proceedings during its regular session. We know that Ark. Stat. Ann. § 84-703 (Repl. 1960), requiring the county clerk to serve as secretary of the equalization board, was passed in 1929, before the authorization for planning-sessions was passed in 1955 (Ark. Stat. Ann. § 84-721). Under this circumstance we do not interpret Ark. Stat. Ann. § 84-703 as requiring the attendance of the county-clerk at all special planning- sessions of the equalization board. Otherwise it might become impossible for the county clerk to perform the other duties assigned to his office by law.

Point 4. The record shows that Lawrence County was divided into two districts until August 30, 1963, at which lime it -was consolidated. After that date the county equalization board should have been composed of only three members instead of five. Ark. Stat. Ann. § 84-702 (Repl. 1960). However it was stipulated that there had been no action by the county judge, school officials or city officials in Lawrence County to select a new board of equalization after consolidation of the county. Under these circumstances it would appear that the existing five members remained on the board as hold-over members until their successors were duty selected or appointed and qualified, Ark. Stat. Ann. § 84-702. At any rate they were at least de facto officers. See Pennington v. Oliver, 245 Ark. 251, 431. S.W. 2d 843 (1968).

Point 5. Appellants’ last attack on the equalization board is that it failed to literally follow the notice procedure required by Ark. Stat. Ann. § 84-707(2) & (3). Here the record shows that the board in sending out its notices to the landowners only showed the valuation fixed by the board — i.e., the notices did not state the valuation returned by the assessor for the year 1966. While we think the better practice would have been for the notices to have complied with the statutes, under the circumstances we find that appellants are not in a position to allege error because all of them appeared in ample time before the board. Therefore even if it should be held that the notice was defective, any error in connection therewith is harmless as to the appellants.

Affirmed.

Fogleman, J., dissents.

John A. Fogleman, Justice.

I disagree with the result reached by the majority because I do not see how the action of the board of equalization in this case can be taken to be an equalization of assessments made by the county assessor for 1966.

Our system of assessment of property for taxation requires that the primary valuation be made by the assessor. Pulaski County Equalization Board Cases, 49 Ark. 518, 6 S.W. 1; Lyman v. Howe, 64 Ark. 436, 42 S.W. 830. Then, and only then, is the board of equalization authorized to raise or lower valuations placed on specific properties in order to equalize the valuations. See Pulaski County Equalization Board Cases, supra; Lyman v. Howe, supra.

That is not what took place here. The board of equalization actually made its own valuation of rural real estate without regard to the valuations made by the assessor on this or any other property.

II. L. Lady, a member of the board of equalization, testified that the board met in January or February 1966, after having been advised on August 1, 1965, that a school district in the county would lose state aid if the property valuations for tax purposes in rural areas were not increased; that the board met for a week in August 1965, and established a basis to work on toward a fair assessment and agreed on values for a certain type of land; that it reconvened in January 1966 for the purpose of finishing the job of land reappraisal commenced at the earlier meeting; that the value to be placed on each farm was determined by consideration of its location, land type, soil conservation maps and aerial photographs from the Arkansas Soil Conservation office, the personal knowledge of the board members and a chart they had; that the true value was not established until August 1, 1966; that the board remained in session for about two months and adjourned about April 1,1966; that the valuation on each tract was placed on a card and transferred to a book which was delivered to either the assessor or county clerk on October 1, 1966; that they did not ever look at the assessor’s abstract of assessments required by law to be filed by July 31, 1966, because they were working on their own plan; that the board had completed its “assessment” by July 31, and had caused some of the notices to affected property owners to be prepared, even though the valuations noted on cards had not all been transferred to the book later filed; the raise in assessed values by the board was based on the values placed on the lands in the meetings of February and March 1966; the notices to the landowners did not include the values at which their respective lands had been previously assessed; the book the board prepared and filed was made up' between May 1 and August 1.

The employee who made the book testified that it was prepared in April or May 1966. The notices to landowners were prepared by this employee in July, and she began mailing them in the latter part of July. They were notices that the “assessment appraisals” had been raised. The book prepared by the board of equalization was brought to the tax assessor sometime in August, according to his testimony.

The powers of the county board of equalization are special and limited. It can perform no act unless it is specially authorized so to do in express terms. Lyman v. Howe, 64 Ark. 436, 42 S.W. 830; Pulaski County Equalization Board Cases, 49 Ark. 518, 6 S.W. 1 The board was authorized to meet from the first of August 1966 through the third Monday in November of that year to equalise the assessed value of all property subject to local assessment Ark. Stat. Ann. § 84-706 (Repl. 1960). The reason for the beginning date of August 1 is that this is the final date for delivery of the tax assessment record to the board by the county assessor. Ark. Stat Ann. § 84-463.1 (Repl. 1960). Immediately after the filing of this report, the clerk of the county court is required to lay the repprt before the board. Then, and only then, is the board authorized to equalise assessed valuations made by the assessor. Ark. Stat. Ann. § 84-707 (Repl. 1960). It is true that special planning sessions are authorized by Ark. Stat. Ann. § 84-721 (Repl. 1960). This act, by its own terms, strictly limits the purpose of these meetings to planning. It is not nearly so broad as the limited quotation in the majority opinion would make it appear.

I submit that this board did far more than plan its work of equalization. It met in February and March of 1966 for the purpose of finishing its job of reappraisal of lands. It then determined values to be placed on farms by considering various factors none of which included the value placed on the lands by the assessor in 1966. It could not possibly have considered this valuation because the assessor was not required to complete iiis assessment of lands until July 1. Ark. Stat. Ann. § 84-415 (Repl. 1960). He was not required to complete his assessment of personal property until August 1. Ark. Stat. Ann. § 84-416 (Repl. 1960). His report was also due to be filed on August 1. Consequently, any assessment that he might have made in February or March would not have been final until his report was filed. The board certainly considered that it had made an assessment by the latter part of July when it commenced mailing out notices to landowners. These notices were only called for when the board had raised the valuation of any property. Ark. Stat. Ann. § 84-TOT. They were based upon a book of board valuations completed by June 1. It was impossible for it to have “equalized” assessments because it never saw the assessor’s report. The chairman, when asked if the board ever saw the 1966 report, answered, “Well, we were done with our assessment July 31st in ’66.”

The conclusion that the board of equalization did not equalize valuations, but that it made an assessment of its own, seems inescapable to me. In view of the testimony of the chairman and the board’s clerical employee, called by appellants as hostile witnesses, I do not see how it can possibly be said that the work of the board was “equalization,” or that, prior to August 1, it was only planning.


author: Frank Holt, Justice.

text:
    Gertrude Barnes v. Charles H. Barnes
    5-4851
    439 S.W. 2d 37
    Opinion Delivered April 7, 1969

      Wooclivarcl & Kinard for appellant.

      Brown, Compton, Preiuett & Diclcens for appellee.
   Frank Holt, Justice.

This is an appeal from a reduction of maintenance and child support payments. In 1964 the appellant was awarded $600 per month as alimony and child support in a separate maintenance action. In June 1967, the appellee was granted a divorce based upon three-years separation. The payment of $600 alimony and child support was continued. In February 1968, the appellee petitioned for a modification of this monthly payment upon the assertion of a material change in circumstances during the preceding eight. months. In July 1968, after a hearing upon appellee’s petition to modify and appellant’s petition for a citation for contempt, the chancellor ordered a reduction of the alimony and child support from $600 to $450 per month; that the stipulated arrearage of $2100 which had aecumulated the past few months be paid by alternate monthly payments of $150 and that appellee would be in contempt of court until this arrearage was fully paid; and further ordered that the appellee pay the costs and an attorney’s fee.

For reversal the appellant first contends there was insufficient evidence for the lower court to modify the decree of June 1967. Upon a trial de novo, we cannot agree.

A decree for maintenance and support is always subject to modification by application of .either party upon a showing of change of circumstances. Perry v. Perry, 229 Ark. 202, 313 S.W. 2d 851 (1958); Ark. Stat. Ann. § 34-1213 (Repl. 1962).

IVe review the evidence of a change of circumstances since the June 1967 decree. A month later, appellee remarried and now has two stepchildren. The arrearage of $2,100 in appellee’s monthly payments appears to have accumulated since that decree. The $600 monthly payment was based upon a gross annual income of approximately $11,200. There was evidence that appellee’s gross income for the year 1967 was approximately $11,720 and a net taxable income (before exemptions) of $5,305.06. Appellee’s indebtedness to his partners in the practice of medicine increased from $1,886.97 to $3,-564.34 and his partners are now requiring him to pay $175 per month on current joint expenses and not less than $125 per month to reduce the accumulated deficit. This represents an increase in expenses of $125 per month. Before 1967, appellee had entered into an agreement with an estate to purchase the interest of a deceased partner at $200 per month. He is in arrears and offered evidence that this payment must now be increased to $400 per month to avoid eviction. According to him, since the 1967 decree it has become necessary to purchase new equipment at an expense of $2,300. He offered evidence that his net worth had been reduced to a deficit and that he had been unable to pay his 1967 federal income lax of $877.64 and state income tax of $161.90. .Further, that he owes, a note for $1,100 which he borrowed to pay on his alimony and child support.

The appellant offered evidence to the effect that she has suffered hardship because of appellee’s arrearage in payments and that she is delinquent with her obligations. In the 1967 divorce decree she received, in addition to the $600 support payment, a property settlement which included $2,200 in cash, the house in which she presently lives, a lot in El Dorado, and a rental house in Little Bock, all of which were encumbered. The $2,200 was applied on property indebtedness. The residence and lot are still mortgaged and she is delinquent in her payments. The rental property is now free of indebtedness. She testified that she is physically unable to work at the present time. She is 52 years of age and has not worked since she and appellee moved to El Dorado in 1962. She has experience as a medical stenographer and as a psychiatric technician. Their adopted child is now 15 years of age.

In ordering a reduction in payment, the chancellor said: “I’ve got to exercise some common sense. You kill the goose that laid the golden egg and everyone will suffer.” He observed that it might become necessary for appellant to again become employed.

There was only so much income for a division between the support of these two families. We have held that it is only realistic that remarriages happen and such an occurrence is a circumstance to be considered in determining a change in circumstances. McCutcheon v. McCutcheon, 226 Ark. 276, 289 S.W. 2d 521 (1956).

Nor can we agree with the appellant’s contention that appellee’s arrearage precluded any consideration of his petition for a modification. We think the court’s order that the $2,100 in arrearage be paid at the rate of $150 on alternate months before the appellee is purged of contempt is reasonable in the circumstances. Further, we are of the view that the appellant has demonstrated no prejudice because of appellee’s failure to answer certain interrogatories which were filed a few days before the trial. These interrogatories were subjects which were sifted on cross-examination of appellee when he was a witness.

According to this record, we are of the view, upon a trial de novo, that the chancellor was correct in making a reduction of appellee’s payments based upon a showing of a change in circumstances.

The appellee is ordered to pay appellant the costs on this appeal and her attorneys a fee of $300 for their services.

Affirmed.


author: George Rose Smith, Justice,

text:
    Kirby C. Seay, et ux v. E. T. Davis, et al
    5-4793
    438 S.W. 2d 479
    Supplemental Opinion on Denial of Rehearing Delivered April 7, 1969
    [Original opinion delivered February 24, 1969, p. 201.]
   Supplemental opinion on rehearing; rehearing denied.

George Rose Smith, Justice,

on rehearing. In our original opinion in this case, 246 Ark. 201, 438 S.W. 2d 479, we held that under the provisions of the Uniform Commercial Code the appellants were not entitled to accelerate the maturity of the note and mortgage, because the proof showed that they did not believe in good faith, as the statute requires, that the prospect of pavment or performance had been impaired. Ark. Stat. Ann. § 85-1-208 (Add. 1961).

In a petition for rehearing the appellants insist that the Code applies only when the contract permits the creditor to accelerate the maturity “at will,” or words to that effect, whereas here there is also a condition in the contract that the debtors must be in default. The Commissioners’ Comment to the cited section of the Code lends support to the appellants’ argument, for it refers to an acceleration “at the whim and caprice of one party.” See also the Commissioners’ Comment 4 to § 85-3-109.

We think it proper to modify our original opinion by leaving that question open for future decision, for even if the appellants are correct in their construction of the Code the decree must nevertheless be affirmed under our prior decisions. Apart from the Code, as indicated in our original opinion, a court of equity will protect a debtor against an inequitable acceleration of the maturity of the debt. We followed that course recently in Crone v. Johnson, 240 Ark. 1029, 403 S.W. 2d 738 (1966).

That rule is controlling. As stated in our original opinion, Davis assured Seay that if Davis’ son allowed a delinquency to occur, the elder Davis would make it good within three hours, upon being notified. Seay promised to give such notice, but he failed to keep his promise. Ever since Davis, Sr., learned of the delinquency he has stood ready to pay the arrearages, plus the court costs and an attorney’s fee. It would be altogether inequitable to allow Seay to repudiate his own promise and thereby not only retake the property but also, according to the proof, bring financial ruin upon the older of the two debtors. Hence, without regard to the provisions of the Uniform Commercial Code, the decree of the trial court must be affirmed.

The petition for rehearing is according^ denied.


author: Cabbeton Harris, Chief Justice.

text:
    U. S. F. & G. Company v. Hattie Hagan
    5-4871
    439 S.W. 2d 915
    Opinion Delivered April 14, 1969
    [Rehearing denied May 26, 1969.]

      Shackleford & Shackleford for appellant.

      Spencer & Spencer for appellee.
   Cabbeton Harris, Chief Justice.

On April 28, 1966, appellee, Hattie Iiagan, was a passenger in an automobile operated by her sister, Lona Dennington, and being driven north on Highway 4, approaching the intersection at Cedar Street in downtown McGehec. Jerry Peacock was driving an automobile south on Highway 4 toward Cedar Street. The automobile driven by Mrs. Dennington slowed, and made a left turn into Cedar Street, and was struck by the Peacock vehicle at this intersection. Mrs. Dennington held a policy of liability insurance issued by appellant, United States Fidelity and Guaranty Company, which contained an uninsured motorist endorsement, and under its provisions, appellee Hagan was insured up to $10,000.00. This policy was in full force and effect at the time of the accident. Mrs. Hagan instituted suit against the company, alleging that she was painfully injured in the accident due to the negligence of Jerry Peacock, and that Peacock was operating an “uninsured automobile” as that term was defined in the policy. Judgment against appellant was sought in the amount of $9,500.00 ($500.00 having been previously paid under the medical coverage provision of the policy). On motion of appellant, Peacock was made a party defendant. Subsequently, Peacock answered, denying all material allegations of the complaint, and the company filed its separate answer denying that Peacock was legally obligated to Mrs. Hagan, though admitting that appellee had coverage under the uninsured motorist provision in the policy. On trial, the jury returned a verdict in favor of Peacock and the United States Fidelity and Guaranty Company, denying any recovery whatsoever to Mrs. Hagan. Thereafter, appellee filed a motion for a new trial, and the court granted this motion, finding “that the verdict of the jury is contrary to the preponderance of the evidence in this case, and should be set aside.” From the judgment granting the new trial, both the company and Peacock bring this appeal. For reversal, it is first asserted that the jury verdict was reasonable, and the action of the. trial court in granting a new trial on the ground that the verdict was contrary to a preponderance of the evidence, was an abuse of discretion by the court. It is then contended that there was a failure of proof that Peacock was an uninsured motorist.

The company argues that the verdict, rendered by the jury was in line with the evidence, and that, there being a conflict, in the testimony as to negligence, the jury properly passed upon this question; that a court is not authorized to set aside a verdict as being against the weight of the evidence, unless it clearly appears that the jury finding is not only contrary to the. evidence, but so palpably wrong as to shock the sense of justice. Tn support of this argument, two cases are cited, Vandever v. Wilson, 5 Ark. 407, and Singer Manufacturing Company v. Rogers (1902), 70 Ark. 385, 67 S.W. 75. The first case, decided in 1843, deals with usury, and this court upheld the Circuit Court in refusing to grant a new trial. The second case concerns a contract between the Singer Company and one of its employees. Here again, the case does not deal with the propriety of the court’s setting aside a verdict; rather, this court held that the Cir-suit Court shoukl hare sustained the motion for new trial, stating that the judgment against the company was clearly and palpably wrong.

We have pointed out in several recent cases that the only issue that arises on our review of the trial court’s action in setting aside a verdict, is whether the trial judge abused his discretion. Worth James Construction Company v. Fulk, 241 Ark. 444, 409 S.W. 2d 320; Bowman v. Gabel, 243 Ark. 728, 421 S.W. 2d 898, and cases cited therein. We reiterate that we will not disturb the trial court’s finding (that the verdict was against ihe weight of the evidence), unless it is evident that the court abused its discretion. Hi some instances, we have held that the trial court, abused its discretion in setting aside a jury verdict, the most recent holding being found in Ellsworth Brothers v. Mayes, Admr., handed down March 24, 1969, where we found that the trial court clearly abused its discretion in granting a new trial.

But we find no abuse of discretion in the case before us. It was stipulated by the parties that the speed limit at the intersection where the accident occurred was 30 miles per hour. The locale of the collision was in downtown McG-ehee during the noon hour. One eye witness testified that his attention was attracted to the Peacock ear when he heard Peacock spin the wheels about a block away from the scene of the accident. He said that the vehicle passed him at a speed of approximately 50 miles per hour. The wife of this witness testified that the Peacock car “was doing fifty or probably sixty.” There was evidence by a passenger in the Peacock automobile that she observed the Pennington automobile a half block away, as it entered the intersection. It would appear that Peacock had at least 150 feet of space in which to bring his car under control. Of course, it was the theory of appellant that Mrs. Pennington proceeded into the intersection when she did not have time to get across, and was thus negligent. Let it be remembered, however, that this litigation does not involve the degree of negligence between Peacock and Mrs. Pennington. Rather, the suit was instituted by Mrs. Hagan, a passenger in the Pennington automobile. There, was no contention by appellant that the two sisters were engaged in a joint venture, and the only evidence of possible negligence on Mrs. Hagan’s part is that she failed to warn of the approach of the Peacock car, which she said she saw approximately a block away as Mrs. Pennington turned into the intersection. This failure to warn could not have been a proximate cause of her injuries, since Mrs. Pennington testified that she too saw the automobile, about the same distance away, as she made the turn into the intersection. Be that as it may, we certainly cannot say that this evidence was so cogent that the trial judge, in setting aside the verdict, abused his discretion.

Nor can we agree that there was a failure of proof that Peacock was uninsured for the reason that it appears that tilia matter was covered by stipulation in chambers. While various matters were being stipulated, counsel for Peacock stated:

“While we are stipulating I would like to stipulate that the policy of insurance of USF&G was in full force and effect on the date of the accident and that Jerry Peacock was an uninsured motorist.”

Though counsel for United States Fidelity and Guaranty was present, he made no comment, and it is now argued that this was only an offered stipulation, and that there was no response or agreement from counsel for the company. There are several reasons why this argument lacks merit. In the first place, it appears that appellant had already entered into a binding stipulation with regard to this fact. Prior to the quoted statement, counsel for the company had said:

“ * 95 * U.S.F.&G. declares, affirms and is willing to stipulate that it will pay all sums that the plaintiff shall be found to be legally entitled to recover as damages from the defendant, Jerry Peacock because of bodily injuries sustained by the plaintiff caused by the accident of April 28th, 1966, up to the sum of $9,500.00 which represents the limits of the policy of insurance.”

Counsel for Peacock did not want the name of the insurance company mentioned in the presence of the jury, as he considered that this might be prejudicial to his client. In discussing the matter, counsel for the company again stated :

“Judge, my stipulation and declaration goes to the fact that we agree that we are going to pay what sums that Mrs. Hagan is found to be entitled to recover as damages from Peacock, that therefore there is no issue of fact here as far as IT.S.F.&G. is concerned in this case.”
In a few moments, this position was repeated:
“We are stating that whatever damages the jury finds that Mrs. Hagan is entitled to recover against Peacock we are going to pay it and we will authorize and declare that a judgment can be entered for that amount against U.S.F.&G.”
Again, appellant’s counsel stated:
“Judge, what you have got, you have got a suit in tort and a suit in contract. The suit in tort is going to decide the issues of the suit in contract.”

The court disagreed with the argument, and referred all issues to the jury.

It would certainly appear that counsel for appellee was justified in assuming that there was no necessity to offer proof that Peacock was an uninsured driver. Also, the trial judge gave the following instructions:

“You are instructed that the plaintiff, Hattie Hagan, can recover from the defendant, United States Fidelity and Guaranty Company, only if she recovers from the defendant, Jerry Peacock.
“If your verdict is for the plaintiff and against the defendant, Jerry Peacock, you will assess plaintiff’s recovery in the amount you find from a preponderance of the evidence will reasonably and fairly compensate her for the damages sustained in accordance with these instructions. In such case you will also return a verdict against the defendant, United States Fidelity and Guaranty Company, for the amount of her damages, not to exceed, however, the policy limits of $9,500.00.
“In other words, any verdict against defendant, Jerry Peacock, will be for the full amount of the damages, if any, sustained by plaintiff, Hattie Hag-an, but any verdict against defendant, United States Fidelitv and Guaranty Company cannot exceed $9,-500.00.”

Though an objection was made to the instruction by counsel for appellant on other grounds. there was no complaint that the instruction was erroneous because of a lack of evidence that Peacock was an uninsured driver.

Affirmed.

      No brief has been filed in this court by Peacock.

      United States Fidelity and Guaranty Company offered an amendment to the instruction as follows:
      “* * * jf your verdict is for the defendant Jerry Peacock then in that event you must return a verdict for the defendant United States Fidelity & Guaranty Company; and the court overurled the defendants’ objections, and the defendants at the time asked that their exceptions be saved and duly noted of record, which is hereby accordingly done.”