text:
    Larry BOLING, Special Administrator v. Merna W. GIBSON and Cecil L. GIBSON
    78-146
    584 S.W. 2d 14
    Opinion delivered July 9, 1979
    (In Banc)

      Bradley & Coleman, by: Douglas Bradley, for appellant.

      Moore & Gibson, P.A., by: Michael L. Gibson, for appel-lees.
   John A. Fogleman, Justice.

This appeal involves the title to eight certificates of deposit issued by various banks to Herman Gibson, Mema W. Gibson and Cecil L. Gibson. Mema W. Gibson (known as Wayne) and Cecil L. Gibson were the two sons of Herman, who died testate on October 12, 1976, bequeathing and devising all his property to these two sons, his only surviving children. Nora Gibson, Herman’s widow, elected to take against the will, which had nominated these two sons (by a previous marriage) as joint executors. They were appointed as such by the probate court. Mrs. Gibson filed an objection to their accounting because it failed to account for certain certificates of deposit, which she alleged were property of the estate. She then filed an action in the chancery court to determine the ownership of the certificates, which the two sons claimed as a gift from their father. Larry Boling was appointed special administrator upon petition of Mrs. Gibson to prosecute actions on behalf of Herman Gibson’s estate for the determination of the ownership of the certificates. The proceedings were consolidated for hearing. The chancellor and probate judge held that the certificates of deposit were the subject of a gift to Mema W. and Cecil L. Gibson, by their father. Appellant brings this appeal as to bank certificates of deposit of a total face value of $108,-038.14.

Appellant states the following point for reversal:

THE CHANCELLOR AND PROBATE JUDGE ERRED IN HOLDING THAT THE NON-NEGOTIABL1 BANK CERTIFICATES OF DEPOSIT WERE A GIFT FROM HERMAN GIBSON IN HIS LIFETIME TO HIS SONS MERNA W. GIBSON AND CECIL L. GIBSON.
A. THE BANK CERTIFICATES OF DEPOSIT WERE NOT SUBJECT MATTER TO CONSTITUTE A GIFT BY DELIVERY.
B. THERE WAS NO CLEAR INTENT TO MAKE AN IMMEDIATE PRESENT AND FINAL GIFT BEYOND RECALL, UNCONDITIONALLY RELEASING ALL FUTURE DOMINION AND CONTROL OVER THE CERTIFICATES OF DEPOSIT.
C. IF THE CERTIFICATES OF DEPOSIT WERE PROPER SUBJECT MATTER AND IF ALL THE ELEMENTS OF A VALID GIFT WERE PRESENT IN THE DELIVERY, IT PERPETRATED A FRAUD ON THE WIDOW.

A

Appellant contends that because these certificates of deposit were stamped “non-negotiable,” and were not property but only representations of property or money held by banking institutions, they could not be the subject of a gift by the father who purchased them with his own money and either caused them to be made payable to him and these two sons or caused the certificates to be changed to include the two sons as payees, without ever having “designated in writing to the banking institution that the account or Certificate of Deposit is to be held in ‘joint tenancy’ ” as provided in Ark. Stat. Ann. § 67-552 (a) (Repl. 1966). He somehow concludes that the issuing bank could not have legally paid the money to them on presentation of the instrument. He reads Porterfield v. Porterfield, 253 Ark. 1073, 491 S.W. 2d 48, as holding that a delivery of certificates of deposit issued in the names of two or more persons without a designation in writing will not satisfy the elements of an immediate, present and final gift. Such a reading is not justified. The decision in Porterfield was that there was no delivery of the certificate in question and no clear and convincing evidence that there had been a gift. We did hold that all the elements of a completed inter vivos gift must be shown by dear and convincing evidence. We pointed out that there must be an actual delivery of the subject matter of the gift to the donee with a clear intent to make an immediate, unconditional and final gift beyond recall, accompanied by an unconditional release by the donor of all future dominion and control over the property so delivered.

The “non-negotiable” nature of these certificates meant only that title would not pass by endorsement and delivery by the payees, or any of them, to one not a party to the Instrument. The alternate payees were the father and his two sons, named as “Herman Gibson or M. Wayne or Cecil Gibson,” or variations of the names and of the order in which they were named. All were payable to any of the payees or the survivor of either. The sums represented by these certificates were payable by the issuing bank to any one of the three named payees. Ark. Stat. Ann. § 67-521 (Repl. 1976). Cook v. Bevill, 246 Ark. 805, 440 S.W. 2d 570. Ark. Stat. Ann. § 67-552 (a) has little, if any, significance, because appellees are not claiming by right of survivorship.

The certificates of deposit were subject of gift by delivery with intent to make a gift. We have said that a promissory note, or any chose in action or any other evidence of debt, may be the subject of a gift inter vivos. Pyland v. Gist, 177 Ark. 860, 7 S.W. 2d 985. A certificate of deposit falls into that category. It was classified in that respect in Basket v. Hassell, 107 U.S. 602, 2 S. Ct. 415, 27 L. Ed. 500 (1883) in these words:

* * * A certificate of deposit is a subsisting chose in action and represents the fund it describes, as in cases of notes, bonds, and other securities, so that a delivery of it, as a gift, constitutes an equitable assignment of the money for which it calls.

These instruments have been so considered universally. Commonwealth v. Crompton, 137 Pa. 138, 20 A. 417 (1890); Dietzen v. American Trust & Banking Co., 175 Tenn. 49, 131 S.W. 2d 69 (1939); Philpot v. Temple Banking Co., 3 Ga. App. 742, 60 S.E. 480 (1908); Annot., 40 ALR 508, 509.

This contention presents us with a very difficult and delicate problem. Appellees sought to prove that a completed gift of the certificates of deposit was made to them by their father in his lifetime. They had the burden of showing, by clear and convincing evidence, that these certificates were delivered to them by their father with the clear intent to make an immediate, present, final gift beyond recall, releasing all future dominion and control. It must have been the intention of the donor that title pass immediately, and a delivery for safekeeping or for any purpose, either express or implied, other than a specific intent to part with all right, title and interest in, and all dominion and control over the certificates, would not constitute a gift. Lowe v. Hart, 93 Ark. 548, 125 S.W. 1030.

The certificates were issued by various banks in Jonesboro. None of the banks at the time required the depositor to designate the payees or depositers in writing or to execute any signature card or any written document in connection with the issuance to the certificates. Some of them had originally been issued to Herman Gibson only. Later, he caused the names of his two sons to be added as payees by oral instructions. Others were originally issued to these three payees. One of them had been issued as early as June, 1973. Appellees contend that the gift to them was made on July 28, 1976.

Mr. and Mrs. Herman Gibson had a safe deposit box at First Bank & Trust Company (then First National Bank) in Jonesboro. The records at that bank show that it was entered by Herman Gibson on July 28, 1976, at 9:05 a.m. Wayne Gibson, who lived in Springfield, Missouri, testified that he visited his father for two or three days in July, 1976, and that when the two ate breakfast on the morning of July 28, his father said, “We have got some business to take care of; we are going to town.” Wayne said that, on the way, his father told him that he intended to give all the certificates of deposit he had bought, and about which he had talked to Wayne over the years, to Wayne and his brother, saying he wanted to take them out of his lock box and give them to Wayne. According to Wayne, they stopped at the First National Bank and his father went inside and returned in a few minutes, handed Wayne an envelope containing the certificates and said, “These belong to you boys and I want you to have them,” and then asked Wayne what he was going to do with them. Wayne said that they crossed the street and walked toward the Citizens Bank, but, before they got to the bank, his father met someone he knew and stopped to talk. Wayne proceeded into the bank and engaged a safety deposit box through Ms. Christobel Elliott, a bank employee, who gave him two keys to the box, and accompanied him to open the box, where he used one of the keys and she used the bank’s key to open the box, into which Wayne placed the certificates. Wayne said that, as he left, he met his father, who was standing inside, near the front of the bank. Cecil Gibson testified that in June, 1976, his father had spoken of the certificates of deposit and had said to him, “I am going to give them to one of you boys, the first one of you that is up here on a working day.”

This was all the testimony about the making of the gift, but a sharp issue has arisen about the intent of Herman Gibson at the time of the transaction and his relinquishment of dominion and control, particularly in view of the fact that he received and retained all interest paid on the certificates between the time they were placed in the lock box at Citizens Bank and his death.

Christobel Elliott, who was a vault attendant in charge of safety deposit boxes at Citizens Bank, had testified on behalf of appellant. She had been an employee of that bank for 13 years. She took Wayne Gibson’s application for a lock box on July 28, 1976. She produced the record card for the box. She stated that, when Wayne Gibson came into the bank to rent the lock box, he told her his father, whom he identified as H. Gibson, would come in and sign the card, saying, “We will add his name to the card later, he does not have a key right now, I have both keys.” She said that Wayne said that his father signed his name “H. Gibson. ” She said she had just handed Wayne the two keys to the box when he said this. She testified that a man who identified himself as Mr. H. Gibson came in a few days later and told her that his son Wayne Gibson had rented a lock box and had told him to come in and sign his name on the record card. She said that this man stated that he did not have a key yet, but he would be transferring some things from First National Bank and wanted to get his name on the card, and that his son was going to give him a key. She permitted this man to sign the card because these statements seemed to her to be consistent with those made by Wayne Gibson when he rented the box. Her recollection when she testified was that Wayne had said something about transferring some things from the First National Bank. The signature on the card was clearly shown to be that of Herman Gibson, who signed “H. Gibson” on the card. The box was not entered between the time it was rented by Wayne and sometime after October 12, 1976, the date of Herman Gibson’s death. Interest payments were made on each of the certificates of deposit after their delivery to Wayne Gibson by checks issued by the banks and made payable to the father and his two sons. These interest checks were endorsed by Herman Gibson only and his receipt and retention of the proceeds is not questioned.

Ms. Elliott testified that when she made the entry with reference to the transaction on her daily record, she listed the holder of the box as “Gibson, Wayne or H.,” from the instructions given her by Wayne. This was done, according to her, prior to the time Herman Gibson came in to sign the card. She said that Cecil Gibson’s name was added to the card on October 15, 1976, after Herman Gibson died. She said that some of the Gibsons came into the bank and tried to get the record changed, and that on one occasion, Wayne and Cecil Gibson came with their two attorneys, Moore and Gibson, and questioned her about the rental of the box and about H. Gibson’s signature, intimating that she should not have let him sign the card, because she had no authority to do so. She said that, on another occasion, appellees came in and pretty much the same conversation took place. She said that M. W. Griffin and Terry Ray, her department heads, heard loud talking, realized that something was wrong, and came down where the parties were, and, after standing there a few minutes, called an attorney named Womack, who was a member of the law firm which represented the bank.

Ghristobei Elliott said that her discovery deposition had been taken twice. She said that when Moore took her discovery depositions, she produced a copy of the work sheet at his request and made it an exhibit to her testimony. She also stated that he asked her to produce the card, a copy of which was made an exhibit to her discovery deposition. The receipt card, which she said was made up from her daily record sheet, showed payment by “Gibson, Wayne or H.,” and computer cards she said were inside from her daily record sheet listed the box in the name of “Gibson, Wayne or H.” She also said that when her discovery deposition was taken on April 18,1977, she was examined at length by attorneys Moore and Gibson about their coming into the bank and talking to her about the safety deposit box and, from her review of the deposition on the preceding day, there were references to both her meetings with the Gibsons. She stated that Moore had asked her if she wm willing to take a polygraph or lie detector test.

On cross-examination, her credibility was immediately attacked. Ms. Elliott testified that Moore had questioned her as to how Herman Gibson’s signature got on the card and indicated that she was not being truthful with him and asked her if it were possible that she had just imagined what she had said. She denied that she had told Moore and Gibson, the attorneys, that she did not know how Herman Gibson’s name got on the card. She said that she had not stated to attorneys Moore and Gibson that she did not know how Herman Gibson’s name got on the signature card or that she must have been away from her desk when it happened. She stated that in her earlier testimony, she denied having said that, but had instead said that one of the four (3 Gibsons and Moore) had said it. Otherwise, she repeated on cross-examination virtually the same testimony she had given on direct examination. She said that Herman Gibson’s name was never typed in the upper left hand corner of the signature card where the names of persons who could enter the box for which the card was issued were normally placed, because he never came into the bank with a key. She said that she could not be mistaken about Wayne telling her his father would be in later. She said that she had noted on her work sheet that Wayne told her Ms father would be in later.

The attack on Ms. Effiott’s credibility was continued aggressively. The first witness called by appellees was Tommy Womack, the attorney who had been called by bank officers. He testified that he had never been present in a conversation with Ms. Elliott when the two attorneys were present, but was present when she was ©liscussing the matter with appellees. He said that there was a disagreement between them at that time. On cross-examination, he said that Ms. Elliott’s reputation in the community for truth and honesty was exemplary. It was then that Wayne Gibson testified. He contradicted Ms. Elliott’s testimony, saying that she had told Moore in the presence of the three Gibsons that she did not know how Herman Gibson’s name got on the card and said that it must have happened when a girl who replaced her might have been at her desk. He said that she also had said that the signature had not been authorized by Wayne.

Cecil Gibson corroborated his brother’s testimony about Ms. Elliott’s statements to them. He said that Ms. Elliott had given a deposition prior to trial that was different from what she had told appellees and their two attorneys, so he and Wayne went to the basalt. He said that when a bank official saw they were running Into a dispute, he called the lawyer. At the conclusion of Cecil Gibson’s testimony, the following took place:

MR. MOORE: If the Court please, I am going to testify. I will have to withdraw from the case.
MR. BRADLEY: They would both have to withdraw from the case. 0 0 0 Rules of Ethics say that if even a partner testified the other partner has to withdraw. THE COURT: Gentlemen, I am not going to tell you how to try your lawsuit.
MR. BRADLEY: I am not going to make any objections either way as such, I am merely pointing out what * ® * Rules of Ethics says.
MR. MOORE: There is no rale of law.
MR. BRADLEY: I know there is no rule of law.
THE COURT: As I said, gentlemen, I am not going to tell you how to try your lawsuit. I don’t have that authority.

When Moore took the stand and identified himself, appellant’s attorney stated: 84If the Court please, just to be sure the record is straight, I want the record to show that Mr. Moore has withdrawn from the case to become a witness, but his partner is continuing in the lawsuit.” The chancellor responded: “All right.” Appellant’s attorney then asked that he have a continuing objection to the attorney’s testifying and the court stated that it was already in the record. Moore contradicted Ms. Elliott’s testimony and gave his version of her answers when he questioned her in the bank which was similar to the testimony of appellees. He stated that in his examination of Ms. Elliott in a discovery deposition, her testimony was exactly opposite to her statements on the occasion he questioned her in the bank.

The chancellor found that there was sufficient dear and convincing evidence that Mr. Herman Gibson intended to give these certificates to his two sons. The court based its decision in part on the fact that Herman Gibson never had the key to the box. The question, however, was not whether Herman had lost all dominion and control over these certificates. It was whether he clearly intended to relinquish all dominion and control. His collection of interest does not indicate that he did. His appearing and signing the signature card may have been an afterthought, or it may have been a clear indication that, at the time of delivery, he did not intend to surrender all dominion and control.

The testimony of the attorney in this case becomes very critical on the determination whether the evidence of Herman Gibson’s intent to make a completed gift inter vivos is clear and convincing. It is particularly critical when it involves the credibility of a witness whose testimony was essential to the adversary’s case. This was not a sudden development. The lawyer had known, at least since taking a discovery deposition in March, before the trial in May, that the witness would testify as she did, yet he actively participated in the trial. Not until the very end of the trial did the attorney withdraw from the case. When he did, his partner continued with the trial, in spite of objections by appellant’s attorney.

The Code of Professional Responsibility adopted by this court includes the following provisions:

DR 5-101 Refusing Employment When the Interests of the Lawyer May Impair His Independent Professional Judgment.

* * *

(B) A lawyer shall not accept employment in contemplated or pending litigation if he knows or it is obvious that he or a lawyer in his firm ought to be called as a witness, except that he may undertake the employment and he or a lawyer in his firm may testify:
(1) If the testimony will relate solely to an uncontested matter.
(2) If the testimony will relate solely to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony.
(3) If the testimony will relate solely to the nature and value of legal services rendered in the case by the lawyer or his firm to the client.
(4) As to any matter, if refusal would work a substantial hardship on the client because of the distinctive value of the lawyer or his firm as counsel in the particular case.
DR 5-102 Withdrawal as Counsel When the Lawyer Becomes a Witness.
(A) If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm ought to be called as a witness on behalf of his client, he shall withdraw from the conduct of the trial and his firm, if any, shall not continue representation in the trial, except that he may continue the representation and he or a lawyer in his firm may testify in the circumstances enumerated in DR 5-101 (B) (1) through (4).

We have been confronted with numerous problems in connection with testimony by attorneys engaged in the trial of a case over the past decade. The following cases have arisen: Rushton v. First National Bank of Magnolia, 244 Ark. 503, 426 S.W. 2d 378; Old American Life Insurance Co. v. Taylor, 244 Ark. 709, 427 S.W. 2d 23; Montgomery v. First National Bank of Newport, 246 Ark. 502, 439 S.W. 2d 299; Cox v. Gulf Union Corp., 255 Ark. 120, 499 S.W. 2d 63; Watson v. Alford, 255 Ark. 911, 503 S.W. 2d 897; McWilliams v. Tinder, 256 Ark. 994, 511 S.W. 2d 480; Dingledine v. Dingledine, 258 Ark. 204, 523 S.W. 2d 189; Canal Insurance Co. v. Hall, 259 Ark. 797, 536 S.W. 2d 702; Jones v. Hardesty, 261 Ark. 716, 551 S.W. 2d 543; Milbum v. State, 262 Ark. 267, 555 S.W. 2d 946; Enzor v. State, 262 Ark. 545, 559 S.W. 2d 148; McCoy Farms, Inc. v. J & M McKee, 263 Ark. 20, 563 S.W. 2d 409.

In some of these cases we have recognized that there are cases in which the necessity for the lawyer testifying cannot be anticipated until a stage of the trial at which his withdrawal, or that of his firm, would be impossible without serious injustice to his client, and that withdrawal should not be expected in such cases. “[B]ut it should be clear that the necessity for the lawyer’s testimony could not have been anticipated. ” Montgomery v. First National Bank of Newport, supra. If the lawyer’s testimony was necessary in this instance, it should have been known two months prior to trial. It is not sufficient to leave further trial to a member of the testifying attorney’s firm. Old American Life Insurance Co. v. Taylor, supra; Montgomery v. First National Bank of Newport, supra. Serving as appellate counsel after testifying is not even permissible. Milbum v. State, supra. We have indicated that an attorney should decide whether he should serve as a witness or as an advocate. Enzor v. State, supra.

In Dingledine v. Dingledine, supra, we pointed out observations in the Code of Professional Responsibility that an advocate who becomes a witness is put in the position of arguing his own credibility and that there is inconsistency in the function of an advocate to advance or argue the cause of another and that of a witness to state facts objectively. Credibility was the issue here.

Ordinarily, on trial de novo in this court, we avoid remand of a case reviewed under standards governing equitable procedures. In McWilliams v. Tinder, supra, we were able to do so. For reasons hereinbefore stated, we cannot do so here.

We are in somewhat the same position we found ourselves in Rushton v. First National Bank of Magnolia. There we reversed the decree in favor of the testifying attorney’s client and remanded the case for a complete new trial, unprejudiced by any findings theretofore made,.and we find it necessary to do so here.

We do not treat appellant’s point C. It does not appear that fraud was an issue in the trial court. The chancery court did not treat it as an issue. We find no evidence in the record before us to support a finding of fraud.

The decree is reversed and the cause remanded for a new trial.


source: Caselaw Access Project

author: John A. Fogleman, Justice.

license: Public Domain

text:
    PICKENS-BOND CONSTRUCTION CO., Employer And ST. PAUL INSURANCE CO., Insurance Carrier v. Arguss CASE, Employee
    78-181
    584 S.W. 2d 21
    Opinion delivered July 9, 1979
    (In Banc)

      Andrew L. Clark, for appellants.

      Bud Whetstone, of Whetstone <3? Whetstone, for appellee.
   John A. Fogleman, Justice.

Arguss Case suffered a com-pensable injury when he fell at least 25 feet from the fourth floor of a building in the course of his employment by Pickens-Bond Construction Company. The original injury occurred on or about February 2, 1973. On or about November 1, 1973, appellant slipped and fell and suffered a broken hip as he was walking across the floor on his crutches while attending a rehabilitation orientation. At a hearing before an administrative law judge, Case sought: a 15% penalty on account of the alleged violation of safety regulations under the United States Occupational Safety & Health Act of 1970; nursing services and related expenses; reimbursement for travel expenses; the provision for special appliances and improvements to his home to facilitate his daily activities, an increase of compensation from $49 to $66.50 per week from the time of the second injury; reimbursement for expenses incurred in connection with acupuncture treatments; and attorney’s fees on all such items, on the allegation that appellant had controverted all of them.

Upon appeal, the full commission held that:

Case was entitled to nursing services; his wife had adequately provided these services; Mrs. Case was entitled to compensation at the minimum wage rate for 24 hours a day, seven days a week from May 10, 1973 to May 15, 1974, except for a period of hospitalization; Case was entitled to continued nursing services by his wife for which she should be compensated at the minimum wage rate in Arkansas for 16 hours a day, seven days a week, beginning May 15, 1974, but that Case no longer needed nursing services for 24 hours per day; the hourly rate of compensation shall be increased as the minimum wage is increased; appellants should provide a whirlpool bath and seat and a lower extremity resistive exercise table and a hot water tank and housing adequate for the whirlpool equipment; appellants were liable for travel expenses between Case’s home and the places he received medical treatment or physical therapy, except for a trip for acupuncture treatments; maximum attorney’s fees were allowed upon controverted items.

Both parties appealed from the commission’s decision, but it was affirmed by the circuit court. Both parties appeal from the judgment of the circuit court. Appellants rely upon the following points for reversal:

I
A WORKMEN’S COMPENSATION CLAIMANT’S WIFE IS NOT ENTITLED TO BE COMPENSATED FOR ORDINARY SERVICES RENDERED HER INJURED HUSBAND AND THE COMMISSION’S AWARD OF REMUNERATION TO MRS. ARGUSS CASE WAS NOT JUSTIFIED BASED UPON THE EVIDENCE PRESENTED.
II
THE COMMISSION’S FINDING THAT PORTIONS OF THE AWARD HAD BEEN CONTROVERTED WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.
I

Appellants state that, based upon the evidence, the award for Mrs. Case for nursing services is unreasonable and that this portion of the award should be remanded for further consideration or dismissed. We can find no basis for dismissal, and no necessity for remand.

Ark. Stat. Ann. § 81-1311 (Repl. 1976) requires that the employer provide nursing services for an injured employee. In Sisk v. Philpott, 244 Ark. 79, 423 S.W. 2d 871, we sustained the award of compensation for nursing care by a relative. In Dresser Minerals v. Hunt, 262 Ark. 280, 556 S.W. 2d 138, we approved an award for the nursing services of a wife. We do not agree with appellants’ contention that Mrs. Case’s entitlement to compensation for nursing services for caring for her injured husband, or the liberal allowance for the period between May 10, 1973 and May 15, 1974, was not supported by substantial evidence, but we do agree that the allowance of compensation for a wife taking care of her husband, on the basis of 16 hours per day, beginning May 15, 1974, is unreasonable and not supported by substantial evidence.

As a result of his injuries, Case suffered sphinctive difficulties. When he was released from the hospital on May 10, 1973, he was in full control braces. Although he was able to walk without the bracing, he could not do so effectively. A catheter had been removed only two days earlier, but he continued to be incontinent of feces, for sometime. He was required to continue physical therapy twice a week as an outpatient. He had a post-phlebetic syndrome with some swelling. He was able to walk on crutches to some extent, but a wheelchair was required when he tired. After he was released, he experienced a urinary infection. He was able to do without a catheter but experienced involuntary micturation, and his difficulty in voiding continued for quite a while.

Although 18 months is normally considered as the period of potential healing where spinal cord injuries are concerned, his neurological improvement after four months was not satisfactory. Six months after the injury, he had no functional use of his legs from the knee down. There was weakness in his hips and he felt that the left hip socket tended to dislocate at times. Outpatient therapy with electric muscle stimulation two or three times per week was later prescribed. On November 1,1973, when Case fell, he sustained a fracture of the left femoral neck. Surgery was required and when he was discharged from the hospital he was instructed in non-weight bearing, walker ambulation and wheelchair use. Resumption of physical therapy was recommended. There was some retrogression in respect to bladder function, because catherization was again required in this later hospitalization. He seemed to reach a plateau about the middle of January, 1974, and a return to use of surgical elastic hose was recommended because of numbness in his feet and increased edema in the lower left extremity.

Case was returned to the hospital for one week in January, 1974, because of acute thrombophlebitis in this leg. He was discharged on anticoagulants and medication for blood count. Physical therapy to strengthen the muscles of his lower extremity and back were continued. When examined in April, 1974, he reported that he was doing quite well, except for a popping sensation from the left hip, which was neither painful nor annoying, when he did situps with someone holding his legs. He reached the end of his healing period in May, 1974, with a permanent physical impairment of the body as a whole, amounting to 80% to 95%, with chronic thrombophlebitis of the left lower extremity which would, if anything, increase his impairment. By December 5, 1974, Case was able to walk with a waddling gait with motor paralysis primarily in the muscle of the thigh. He still wore braces on both lower extremities and was emptying his bladder by use of the Crede maneuver.

Prior to May 29, 1975, Case had undergone 47 acupuncture treatments in Washington, D.C., but his feeling of relative improvement thereafter could not be objectively substantiated. Thereafter, he received additional acupuncture treatments, which improved his confidence in his walking, but his neurosurgeon found no objective evidence of improvement in motor or sensory function. In March, 1976, Case was suffering itermittent pain in his left hip region. He continued to have problems of urinary incontinence, but was free of infection. He required frequent changing of undergarments in much the same way one would care for a newborn infant. He was still wearing short leg braces in March, 1978, and walking on the inside of his foot.

Mrs. Case was given instructions on exercising her husband while he was in the hospital after he suffered the hip fracture. After 11 weeks in the hospital, Case could only sit up for short intervals and had to remain in bed and had to eat in bed part of the time. Mrs. Case had to help him turn over in bed every two hours for about two months. She had to bathe him, and remove and replace his full body brace at least twice a day. It was two or three months before he was able to leave the house and she stayed with him except for short periods when she did such things as grocery shopping. After his hip injury, he had to stay off his leg for 12 or 13 weeks. At the time of the hearing, he still had a problem with his bowels and bladder. He used a walker in the house, but used crutches when walking outside. After he walked a block, he had to stop and rest. He could bathe himself but his wife had to dry him afterwards. She drove the car when they went anywhere. He could go upstairs by use of a handrail, but since he needed someone behind him in case he fell because of poor balance, she followed him sometimes. He wears rubber pants, which he can remove, but she has to help him put them on. She still helps him with one of his exercises. Mrs. Case usually goes with him whenever he leaves home to help him through doors, but he walks in the yard alone. She was not administering any medicine, as he was not taking any. Her help was primarily in getting things for him and helping him get around.

He spent one month in Washington D.C., in April, 1975, taking acupuncture treatments. He returned home for a week and then went back for an additional month, for more treatment. Mrs. Case went with him on the first trip, but not the second. The first time she shopped for groceries and changed his bed if he had “accidents.” The acupuncture center was in the motel where Case stayed and he was able to get along without his wife on the second trip. When he needed things away from the motel, either a bellboy or another patient got them for him. He is now able to walk around the house with the aid of only one ordinary walking cane. Mrs. Case still helps Case get his clothes and, when he has an “accident” at night, she changes his bed and pajamas.

In the opinion of a physical therapist who worked with Case and who testified on his behalf on March 4, 1975, the claimant was then able to do his own preparation for bowel and bladder care arid did not need someone in his presence in the house at all times. He said that when Case came out of the whirlpool bath, he could dry himself except for his ankles, feet and buttocks. He felt that Case could take care of himself after bowel and bladder accidents in his own home, with some degree of difficulty.

In approaching the question of substantiality of evidence, it is sometimes difficult to strike a balance between accepting any evidence as substantial evidence and weighing the evidence. “Any” evidence is not substantial evidence. St. Louis S. W. Ry. Co. v. Braswell, 198 Ark. 143, 127 S.W. 2d 637. Bare conclusions, without supporting facts, are not substantial evidence. Arkansas State Highway Com’n. v. Carruthers, 246 Ark. 1035, 441 S.W. 2d 84. Substantial evidence is valid, legal and persuasive evidence. Arkansas Pollution Control Com’n. v. Coyne, 252 Ark. 792, 481 S.W. 2d 322. “Substantial evidence is more than a scintilla, and must do more than create a suspicion of the existence of the fact to be established. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion,” as stated by the Court of Appeals for the Eighth Circuit. See NLRB v. Arkansas Grain Corp., 392 F. 2d 161 (8 Cir., 1978). See also, Easttam v. Secretary of Health, Education & Welfare, 364 F. 2d 509 (8 Cir., 1966). Substantiality is a question of law. Aluminum Co. of America v. McClendon, 259 Ark. 675, 535 S.W. 2d 832. We addressed the matter of substantial evidence in that case, which was a worker’s compensation case. There we said:

Substantial evidence has been defined as “evidence that is of sufficient force and character that it will, with reasonable and material certainty and precision, compel a conclusion one way or the other. It must force or induce the mind to pass beyond a suspicion or conjecture.” Ford on Evidence, Vol. 4, § 549, page 2760. Substantial evidence has also been defined as “evidence furnishing a substantial basis of fact from which the fact in issue can reasonably be inferred; and the test is not satisfied by evidence which merely creates a suspicion or which amounts to no more than a scintilla or which gives equal support to inconsistent inferences.” Wigmore on Evidence, Vol. IX, 3rd ed § 2494, footnote at page 300. See also Tigue v. Caddo Minerals Co., 253 Ark. 1140, 491 S.W. 2d 574; Goza v. Central Ark. Dev. Council, 254 Ark. 694, 496 S.W. 2d 388.

It may well be that there is some evidence that would tend to support the award made by the commission, particularly if the nursing services were not being rendered by the claimant’s wife. We have recognized that a wife, under appropriate circumstances, should be compensated for such services rendered her husband, especially when she has found it necessary to leave her employment to do so. Dresser Minerals v. Hunt, 262 Ark. 280, 556 S.W. 2d 138. There is, without doubt, substantial evidence that Case needs some services and that it is advisable that someone be available 24 hours a day. The real issue is whether the evidence is substantial to support an award for nursing services by a spouse which covers 16 hours per day.

The nursing services for which the employer is responsible are those reasonably necessary for the treatment of the injury. Ark. Stat. Ann. § 81-1311 (Repl. 1976). This does not include those services which one spouse is normally expected to render to another. In Dresser Minerals v. Hunt, supra, we have given recognition to the fact that the term “nursing services” embraces more than a wife’s ordinary care for a sick husband, and indicated that the services contemplated were those rendered in tending or ministering to another in sickness or infirmity. The problem lies in establishing a line of demarcation between the two types of services when both are rendered by one spouse to another.

Marriage is a civil contract between a husband and a wife. Ark. Stat. Ann. § 55-101 (Repl. 1971); Meister v. Moore, 96 U.S. 76, 24 L. Ed. 826 (1878); Dodson v. State, 61 Ark. 57, 31 S.W. 977; Reaves v. Reaves, 15 Okla. 240, 82 P. 490 (1905); B v. B., 78 Misc. 2d 112, 355 N.Y.S. 2d 712 (1974). Anonymous v. Anonymous, 67 Misc. 2d 982, 325 N.Y.S. 2d 499 (1971). See also, Smiley v. Smiley, 247 Ark. 933, 448 S.W. 2d 642; Bickford v. Carden, 215 Ark. 560, 221 S.W. 2d 421; Worden v. Worden, 231 Ark. 858, 333 S.W. 2d 494; Shatford v. Shatford, 214 Ark. 612, 217 S.W. 2d 917; Pickston v. Daugherty, 109 So. 2d 577, 71 ALR 2d 618 (Fla. App., 1959); State ex rel Fowler v. Moore, 46 Nev. 65, 207 Pac. 75, 22 ALR 1101 (1922); State v. Bittick, 103 Mo. 183, 11 LRA 587 (1891). The contract is to be husband and wife and to assume all rights and duties of the marital relationship. Jambrone v. David, 16 Ill. 2d 32, 156 N.E. 2d 569 (1959). The common understanding of marriage in this country is that the two parties to the contract have undertaken to establish a life together and assume certain duties and obligations to each other. Lutwak v. U.S., 344 U.S. 604, 73 S. Ct. 481, 97 L. Ed. 593 (1953). See also, Black’s Law Dictionary, DeLuxe 4th Ed. p. 1123; B v. B, supra; 55 CJS 806, Marriage, § 1. The marital obligation is a composite of many responsibilities and duties; it is the obligation of each spouse to the other to live conjugally, with the other, and to love, support, protect and defend the other. Williams v. Williams, 34 Ill. App. 2d 210, 181 N.E. 2d 182 (1962). A spouse is legally obligated to provide support to his spouse who is physically infirm. Ark. Stat. Ann. § 41-2405 (Repl. 1977). One spouse, by virtue of the marriage relation, has the right to the society, companionship, services, love, affection and aid of the other. Gibson v. Gibson, 244 Ark. 327, 424 S.W. 2d 871; Little Rock Gas & Fuel Co. v. Coppedge, 116 Ark. 334, 172 S.W. 885; Billingsley v. St. Louis, I. M. & S. Ry. Co., 84 Ark. 617, 107 S.W. 173. See also, Missouri Pac. Transportation Co. v. Miller, 227 Ark. 351, 299 S.W. 2d 41; Ark. Stat. Ann. § 27-909 (Repl. 1962). It is the legal duty of the husband and wife to attend, protect and care for and nurse the other in sickness, when either is unable to care for himself. Robinson v. Foust, 31 Ind. App. 384, 68 N.E. 182 (1903); Galway v. Doody Steel Erecting Co., 103 Conn. 431, 130 A. 705 (1925).

Obviously, some of the services performed by the claimant’s wife are no more than should be expected because of the relationship. Appellee admitted that she was “married to the guy” and willing to do all she could to help him. Dividing the services between those the claimant had a right to expect from his wife, and those which are nursing services for which she should be compensated, is not an easy or simple task. Professor Larson pointed up the problem. 2 Larson’s Workmen’s Compensation Law 10-469, § 61.13. He said:

The commonest controversy is the question whether practical nursing services performed by the claimant’s own wife may be made the subject of a claim for nursing expenses. The earlier cases denied the allowance, on the ground that the wife did no more than she was bound to do as an affectionate spouse. Later cases, however, have permitted the charge, on the reasoning that the employer, by statute, has the affirmative duty of furnishing this kind of nursing service. If he has not done so, and if the wife then takes over these duties in addition to her regular household work and does exactly what a hired nurse would have had to do, the charge is proper.

Nursing services do not include assistance with household and personal tasks which the claimant is unable to perform. To extend the meaning of the term to include such services would be judicial legislation. Tirocchi v. United States Rubber Co., 101 R.I. 429, 224 A. 2d 387 (1966).

In Graham v. City of Kosciusko, 339 So. 2d 60 (Miss., 1976), the Mississippi Supreme Court grappled with the problem of compensating a wife for nursing services to her husband and concluded that required nursing services should be separated from general household duties and work that a wife ordinarily performs in and about the home in looking after and caring for her husband and family. The court pointedly observed that, while one paraplegic, for example, might leave home, drive himself to work, work all day, and drive himself home, without a moment’s trouble, another might need constant care and attention.

Even when an employer was required to pay the cost of nursing services by an unlicensed practical nurse employed by a claimant, it was held that the employer was not required to assume full cost of the nurse’s services, where her time was divided between nursing services and general housekeeping and the worker was able to dress himself, prepare and take his own medication, feed himself, and perform bathroom functions unassisted. Pan American World Airways, Inc. v. Weaver, 226 So. 2d 801 (Fla., 1969). In that case, the nurse administered medicine to the claimant when he was unable to administer it to himself and assisted the claimant in bathing.

This case is unlike Dresser Minerals v. Hunt, 262 Ark. 280, 556 S.W. 2d 138, where only $100 per week was allowed to a wife who gave up regular employment, which paid her $100 per week, to give nursing services, consisting of giving intramuscular injections, enemas, hot baths, leg and back rubs, and other care that was necessary around the clock, seven days a week, to a husband who was both an invalid and an incompetent. Neither is this case like Sisk v. Philpot, 244 Ark. 79, 423 S.W. 2d 871, where there was an award of $500 per month to a father, who gave up regular employment at which he was earning in excess of $500 per month to care for a son who sustained a compensable injury which rendered him mentally incompetent and physically helpless, so that he required constant nursing attention 24 hours per day. In that case, a practical nurse who was being paid $900 per month for nursing services to the injured employee had quit because the work was too strenuous and no other person could be found who would be willing to accept employment to nurse the claimant.

Although leaving employment to care for a spouse (or relative) is not controlling, it is a relevant factor in such cases. 2 Larson, Workmen’s Compensation Law 10-469 et seq., § 61.13. It was relevant in the Sisk and Hunt cases. It appears that, in this case, the wife’s compensation would be more than double that awarded in the two cases above mentioned. The award here is certainly disproportionate for the nursing services required, to say the least.

There is one indisputable fact in this record that clearly shows that Arguss Case does not need nursing services 16 hours per day. When he made his second trip to Washington, D.C., for acupuncture treatments, he was completely without any such services and there is nothing in this record that shows that he did not fare as well as could be expected, considering his disability.

Case is able to walk with a walker or cane. He can dress himself and put on his shoes. He can get in and out of an automobile unassisted. He could put his rubber pants on, if he had to. Although it seems that he does not do so, he can drive an automobile, without driving controls, using his short leg braces. He is able to prepare for his own bowel and bladder care. Mrs. Case does leave him alone when she goes to the grocery or “whatever she has to do.” She cannot comfortably leave him at night, but there is no indication that she has to do anything at night, unless Case has an “accident” due to incontinence. The bladder problem seems to be persistent, but the more recent medical reports do not mention the bowel problem and Mrs. Case’s testimony indicates that this may have been confined to a period of one year after the injury. The “accidents” sometimes occur nightly, but sometimes he goes a week without having one.

There are certain services performed by Mrs. Case which are compensable as nursing services when doubts are resolved in favor of the claimant. Assisting Case in doing some of his required exercises, helping him to put on rubber pants he wears because of urinary incontinence, changing his bed and pajamas when he has a urinary or bowel “accident” during the night, and, perhaps, helping him dry after a bath, are in that category. The constancy of her attendance upon her husband is obviously increased by the nature and extent of his physical disability. These services, over and above those she owed her husband as a part of her marital obligation, would not begin to consume 16 hours per day, even when allowances are made for the necessity for Mrs. Case’s presence in order to perform them. There is simply no substantial evidence to support an award based on 16 hours per day when we test it on the basis of the appropriate standards. The administrative law judge, in a very liberal award, found a basis for allowance for nursing services by Mrs. Case on the basis of 10 hours per day. Even though we give the findings of the administrative law judge no weight, there is certainly no substantial evidence to justify an award in excess of that. Obviously, we find no merit in appellants’ argument on cross-appeal that the commission erred in not awarding compensation for nursing services on a 24-hour basis.

We have affirmed the judgment of a circuit court modifying an award for permanent partial disability by reducing it from 40% to the body as a whole to 20%, because there was no evidence to support an award for more than the reduced amount, fully recognizing that the determination of the degree of disability was a function of the Workmen’s Compensation Commission. Ray v. Shelnutt Nursing Home, 246 Ark. 575, 439 S.W. 2d 41. We have also reversed the judgment of a circuit court affirming the commission’s award of permanent partial disability of 30% and remanded the cause to the circuit court for remand to the commission for entry of an award of 10% disability, because we found no evidence to support an award in excess of that amount. Diversa & Cotton Belt Ins. Co. v. Davis, 257 Ark. 825, 520 S.W. 2d 243. We acted similarly in Springdale Farms v. McGarrah, 260 Ark. 483, 541 S.W. 2d 928. On the other hand, in Aluminum Co. of America v. McClendon, supra, we found no substantial evidence to support an award of total permanent disability and remanded the case for further proceedings by the commission on the question of the extent of the disability. In this case, we choose to follow the precedent established in Ray v. Shelnutt Nursing Homes, Diversa & Cotton Belt Ins. Co. v. Davis, and Springdale Farms v. McGarrah, by modifying the award for nursing services to allow compensation of Mrs. Case on the basis of 10 hours per day.

II

Appellants base their contention that portions of the award were not controverted upon assertions that they never denied liability on the claim or any of appellee’s entitlements under the Worker’s Compensation Law and that the carrier was making payments and providing prosthetic devices, wheelchairs, ramps, crutches, braces, etc., prior to April 10, 1973, the date appellee retained his attorney. Appellants contend that they denied liability only when the claimant demanded a 15% penalty and payment of his expenses for acupuncture treatments. The commission found that appellants had controverted: claims for reimbursement for mileage to and from his physicians, and to and from sessions of physical therapy and rehabilitation; the provision of necessary additional equipment proposed by a physical therapist and Dr. Jim Moore, a neurological surgeon; two Homedic bills; a bill from Dr. Moore; nursing care by the claimant’s wife; and payment of court reporter’s fees for the deposition of Robbie Walker, a physical therapist.

Appellants contend that, while the question whether a claim is controverted is one of fact, not to be determined mechanically, failure or mere delay in payment when the carrier has accepted the claim as compensable is not equivalent to controversion, citing Horseshoe Bend Builders v. Sosa, 259 Ark. 267, 532 S.W. 2d 182; International Paper Co. v. Remley, 256 Ark. 7, 505 S.W. 2d 219; Garner v. American Can Co., 246 Ark. 746, 440 S.W. 2d 210. Appellants then refer us to that portion of Ark. Stat. Ann. § 81-1311 which provides:

If the employer fails to provide the services or things mentioned in the foregoing sentence within a reasonable time after knowledge of the injury, the Commission may direct that the injured employee obtain such service or thing at the expense of the employer, and any emergency treatment afforded the injured employee shall be at the expense of the employer.

The question before us is whether there is any substantial evidence to support the commission’s findings in respect to controversion. International Paper Co. v. Remley, supra. The question of controversion of nursing services hardly merits discussion. Bill Stackhouse, an adjuster for St. Paul Insurance Company, testified that there was a letter in the company’s file in this case giving notice that Case was claiming nursing expense. Stackhouse was given the opportunity to talk with Mrs. Case. Thereafter, the company sent one check for $198, which he said was for extra work. He did not consider this as payment for nursing services, because Mrs. Case was the claimant’s wife and was not a nurse. He calculated the payment at common labor rates for four hours per day. The time per day was a matter of opinion based on his own feeling, in an effort to arrive at some reasonable compensation to her for services attributable to Case’s fall at the rehabilitation center. Stackhouse considered that only the assistance she rendered Case after that incident was beyond what should be expected of her as his wife. No further payments were made. This item was clearly controverted.

Appellants next assert that the furnishing of a stationary arm, leg and hip whirlpool, a stainless steel seat for it and a resistive exercise unit recommended for Case by Robbie L. Walker, a physical therapist, was not controverted because the carrier agreed to pay for them, but did not procure them, because it assumed that Case would arrange for delivery and present the bill, as he had done in connection with other items. Appellants contend no bill or claim was ever presented to the carrier for payment. From the file of the commission in this record, it appears that appellee’s attorney sent Walker’s letter recommending this equipment to the attorney then representing the carrier, accompanied by photostatic copies of pictures of the equipment, with figures of $920, $45 and $275, noted beside the respective pieces. The file also discloses that on April 18, 1975, the carrier had advised the attorney then representing it that it agreed to pay for the equipment and listed the items described in the pictures, quoting prices corresponding to the figures shown on the photostatic copy. It also reveals that on April 25, 1975, the carrier’s present attorney advised appellee’s attorney that the company would not furnish the devices unless they were prescribed by the claimant’s attending physician. Another letter in the commission file was written by appellee’s attorney to appellant’s present attorney on August 19, 1975, enclosing a letter from Dr. Jim J. Moore, bearing a July, 1975, date, which stated he had reviewed Walker’s recommendations and concurred that such apparatus would be beneficial to the patient both to strengthen and to maintain whatever function was present, and to allow Case to do a great deal of physical therapy at home without incurring travel cost in going to the physical therapist. In Case’s deposition, taken December 30, 1975, he stated that appellants had not paid for the exercise equipment. Although appellants’ attorney then exclaimed that “We’ve furnished every bit of that,” the opinion of the Workmen’s Compensation Commission was not filed until July 13, 1977, and it recited that appellants had failed to furnish this equipment and included it in the award made. There was substantial evidence of controversion of this part of the claim.

Appellants also state that the carrier had paid all requests for reimbursement for mileage as well as all medical benefits. It would unduly extend this lengthy opinion to detail the facts indicating that the carrier was rather dilatory about these payments. Appellants’ adjuster admitted that for eight months after receiving some of the information on these items of expense, he did nothing. We consider the evidence of controversion substantial.

Appellants cite no authority and present no convincing argument on any other items which the commission held to have been controverted, so we do not consider them. Dixon v. State, 260 Ark. 857, 545 S.W. 2d 606.

Appellee contends that the commission erred in failing to find that the entire claim was controverted. We find no basis for reversing the commission’s action in that respect.

We find it unnecessary to treat appellants’ points III and IV, because they are responsive to questions raised on appellee’s cross-appeal, which have been specifically abandoned by appellee in his brief.

The judgment is affirmed on cross-appeal. The judgment is affirmed as modified on direct appeal. The cause is remanded to the trial court with directions to the trial court to remand it to the Workmen’s Compensation Commission for entry of an award consistent with this opinion.

Hickman, J., dissents as to the modification.


text:
    ARKANSAS REAL ESTATE COMMISSION v. Kathleen HARRISON and Dixie HARRISON
    78-322
    585 S.W. 2d 34
    Opinion delivered July 9, 1979
    (Division II)
    [Rehearing denied September 4, 1979.]

      Bill Clinton, Atty. Gen., by: Paul L. Means, Asst. Atty. Gen., for appellant.

      Henry J. Osterloh, for appellees.
   John A. Fogleman, Justice.

This appeal is the result of proceedings held by appellant Arkansas Real Estate Commission concerning complaints lodged against appellees Kathleen Harrison and Dixie Harrison, hereinafter referred to simply as Kathleen and Dixie. After a hearing on December 13, 1976, appellant entered an order dated December 29, 1976, suspending Kathleen’s real estate broker’s license for a period of ninety days, effective January 15, 1977. The order stated that Kathleen had failed, within a reasonable time, to remit moneys belonging to others which had come into her possession and that she had failed to clearly and accurately reduce an agreement concerning commission fees to writing, as required by appellant’s Rule 40. She was found to have violated the provisions of Ark. Stat. Ann. § 71-1307 (g), (h) and (j) (Repl. 1957). Pursuant to Ark. Stat. Ann. § 5-713 (Repl. 1976), Kathleen filed a petition for review of appellant’s order in the Circuit Court of Pulaski County on January 13, 1977, and on that same date the circuit court entered an order staying the order issued by appellant, until a review of the record of the proceedings could be had. This was circuit court case number 77-184.

Another hearing was held by appellant on January 24, 1977, on a charge that both appellees had allowed an unlicensed person to assist them in the procurement of a real estate listing contract, with the knowledge that said person was not licensed as either a real estate broker or salesman. Both were found to have violated Ark. Stat. Ann. § 71-1307 (h) and (j) and Kathleen’s broker’s license was suspended for a period of ninety days, effective February 15, 1977, while Dixie’s real estate salesman’s license was suspended for a period of sixty days, commencing on February 11, 1977. Both filed a petition for review in the Pulaski County Circuit Court, which issued an order on February 14, 1977, staying the order of appellant, pending review. This case was circuit court case number 77-749.

On August 30, 1978, the circuit judge declared that none of the actions of either of the appellees constituted a violation of Ark. Stat. Ann. § 71-1307 (g), (h) or (j) and he entered an order which reversed the orders of appellant, declaring those orders to be null and void. This appeal followed.

Although appellant raises two points for reversal, both are based on the same contention, i.e., there was substantial evidence to support the findings and actions of appellant, and consequently, we will discuss them as if they were the same.

The statutory provisions which Kathleen was found to have violated are a portion of a statute empowering the Arkansas Real Estate Commission to revoke or suspend the real estate license of any person found to have committed certain acts. The portions pertinent to this appeal are:

* * *
(g) Failing, within a reasonable time, to account for or to remit any moneys coming to his possession which belong to others, or
* * *
(h) Being unworthy or incompetent to act as a real estate broker or salesman in such manner as to safeguard the interests of the public, or
* * *
(j) Any other conduct whether of the same or a different character from that hereinbefore specified which constitutes improper, fraudulent or dishonest dealing.

The complaint filed against Kathleen Harrison alleged that she had wrongfully retained a 82,000.00 earnest money deposit given to her in. connection with an offer and acceptance signed by John Noordhoek, who wished to purchase property owned by Tom Keathley and listed for sale with Kathleen’s agency. The offer and acceptance contained a clause which stated that it was “subject to satisfactory financing.” Noordhoek testified at the hearing that he had attempted to obtain financing, his loan applications were rejected by the FHA and by the Federal Land Bank, and when he showed Kathleen a letter from the Federal Land Bank, rejecting his application, she accused him of turning down the loan and threatened to sue him. He said he obtained a job at Ward’s Body Works to improve his chances of approval upon a second application to the Federal Land Bank, but quit after his application was again rejected. According to Noordhoek, after failing in three attempts to obtain financing on the property, he asked Kathleen to return his earnest money deposit and “she told me to go to hell.” He stated that at the time of the hearing, his deposit had not been returned to him. Kenneth Fudge, the local manager of the Federal Land Bank, stated that he had recommended Noordhoek’s second loan application be approved because of Noordhoek’s employment, but that Fudge’s supervisor rejected the application, not because of employment or lack of employment, but rather because he did not think that the income projections for the dairy farm Noordhoek proposed to operate on the property were sufficient. Kathleen testified that she did not return the earnest money because she felt that Noordhoek had not made “sufficient effort to get a loan” and was therefore in breach of the contractual offer and acceptance, that she understood Noordhoek’s lack of employment was the reason the loan had not been approved and that she thought he was backing out to buy a farm from the man he was renting a house from. Noordhoek had stated earlier that he had attempted to buy another farm later, but was forced to abandon his efforts due to his financial difficulties.

Upon review of the actions of an administrative board or agency, the circuit court’s review of the evidence is limited to a determination of whether there was substantial evidence to support the action taken, and upon appeal to this court, our review of the evidence is similarly limited. Ark. Stat. Ann. § 5-713; White County Guaranty Savings and Loan Ass’n. v. Farmers and Merchants Bank of Des Arc, 262 Ark. 893, 562 S.W. 2d 582; Arkadelphia Federal Savings and Loan v. Mid-South Savings and Loan, 265 Ark. 860, 581 S.W. 2d 345 (1979). When we view the evidence in this case in the light most favorable to the findings of appellant, we cannot say that there is no substantial evidence to support the action of appellant in suspending Kathleen’s real estate broker’s license for a period of ninety days and we therefore reverse the judgment of the Circuit Court of Pulaski County.

Appellant’s Rule 40 was not introduced at the hearing and is not abstracted in appellant’s brief, although a portion of the rule is quoted in the argument portion of appellant’s brief. Because we find that there was substantial evidence to support appellant’s finding regarding Kathleen’s failure to remit the earnest money deposit, and because the text of Rule 40 does not appear in the record before us, we need not discuss appellant’s argument relating to Kathleen’s alleged failure to comply with the requirements of the rule.

As to the finding of appellant that both appellees had violated § 71-1307 (h) and (j) by allowing an unlicensed person to assit in the procurement of a real estate listing contract, we agree with the circuit court that it was not supported by any substantial evidence.

Carroll McGee testified at the hearing held on January 24, 1977, that he had seen a newspaper advertisement, placed by Jaine B. Sage, which offered the Sage house for sale. He stated that he called Sage, suggested that she list her house with the Harrison Real Estate Agency and that he and Dixie, his fiance, went to the Sage home where Sage signed a listing contract with Dixie. He stated that he did not tell Sage that he was a real estate salesman or broker, nor that he was associated with or employed by the Harrison Agency. He stated that he asked for no compensation from Dixie and that none was offered or paid. We do not find it necessary to detail any additional testimony from this hearing because there was no showing that any actions of appellees in this transaction were violations of either subsection (h) or (j) of Ark. Stat. Ann. § 71-1307.

Appellant points to Ark. Stat. Ann. § 71-1302 (Supp. 1977), which defines a real estate broker and real estate salesman and lists numerous actions and activities which are considered to be within the realm of real estate transactions, requiring a license. However, a complete reading of the statute reveals that all of these activities must be performed for compensation or with the expectation of compensation to be considered activities of a real estate broker or salesman. The undisputed evidence reveals that McGee neither received nor expected compensation for his actions, from either the seller or the broker, or for that matter, the salesman. So far as the record discloses, McGee was promoting the business of his fiance without compensation. Appellant has not referred us to, nor have we been able to find, any authority, statutory or otherwise, which would prohibit the actions of McGee and appellees, unless the element of compensation for McGee’s services was present. In light of such a complete lack of substantial evidence, we affirm the action of the circuit court.

The judgment of the circuit court in case number 77-749 is affirmed. The judgment of the circuit court in case number 77-184 is reversed and the cause is remanded to the Circuit Court of Pulaski County with directions to remand it to Arkansas Real Estate Commission to enter an order consistent with this opinion.

We agree. Harris, C.J., George Rose Smith and Holt, JJ-


text:
    DICKERSON CONSTRUCTION CO., INC. v. John DOZIER
    79-4
    584 S.W. 2d 36
    Opinion delivered July 9, 1979
    (Division II)

      N. M. Norton, for appellant.

      Daggett, Daggett & Van Dover, for appellee.
   John A. Fogleman, Justice.

During the performance of a contract for highway repairs, the appellant, Dickerson Construction Company, Inc., constructed an earthen dam or “haul road” across a drainage ditch adjoining the appellee’s property. The purpose of this “haul road” was to allow the appellant’s equipment to traverse the ditch. During the period from Friday afternoon, July 8, 1977, to Sunday afternoon, July 10, 1977, a substantial rainfall occurred and this road acted as a dam, causing water to back up in the ditch, ultimately resulting in the inundation of approximately 190 acres of the appellee’s land in varying depths. The water began receding Sunday afternoon, after the dam was cut, and receded totally sometime thereafter. There was a soybean crop on the flooded land. It had been planted approximately June 1, 1977 and had reached a state of growth described as “knee-high.”

The appellee, John Dozier, filed suit against the appellant and sought to establish that the yield of his soybean crop had been significantly reduced by the flooding of the 190 acres, caused by the negligence of the appellant. The appellant’s motion for a directed verdict at the conclusion of all the evidence was denied and the jury returned a verdict for the appellee in the amount of $11,500.00. The appellant’s subsequent motions for a mistrial and for a new trial were denied and this appeal followed.

The appellant alleges the following two points for reversal:

I
THE JURY WAS IMPROPERLY INSTRUCTED AS TO THE MEASURE OF DAMAGES, AND APPELLANT’S MOTION FOR DIRECTED VERDICT SHOULD HAVE BEEN GRANTED BECAUSE OF FAILURE OF PLAINTIFF TO OFFER EVIDENCE ON WHICH THE PROPER MEASURE MIGHT BE BASED.
II
THERE WAS MISCONDUCT OF THE JURY, IN THAT IN THE COURSE OF ITS DELIBERATIONS THE JURY MADE USE OF A POSTER, OR PLACARD, NOT ADMITTED IN EVIDENCE, PREPARED BY APPELLEE AND SETTING OUT APPELLEE’S THEORY OF DAMAGES.

The second point has merit and requires that the case be reversed and remanded for a new trial.

I

Although not necessary for our disposition of this case, the issue of the measure of damages must be discussed, because the same question will almost certainly arise on retrial. Even though we are reversing the judgment on another point, we will treat them in the order they were stated, because the background pertains to both points. Appellee maintained records of the 1977 production of his farm and from those records sought to establish an average reduction in the bushels per acre production of the 190 acres which had been affected. One of these average reductions was based on a comparison to the production on the remainder of the farm as a whole, while the second was based on a comparison to the production achieved on a 55 acre bottomland field, which the appellee testified was more fertile than hillside land and was the type of land most comparable to that flooded. By multiplying that result by the net price per bushel of soybeans (stipulated price of $5.50, less the $.10 per bushel hauling fee), the appellee arrived at the monetary damages allegedly suffered. Use of the 55 acre comparison resulted in damages of $15,708.06, while use of the other figure resulted in damages of $9,695.70. These computations were placed on charts by the appellee’s attorneys, with the higher figure on chart 1 and the lower on chart 2. Although neither was introduced into evidence, chart 1 was used during direct examination of the appellee and during closing argument by the appellee’s attorney.

At the close of all the evidence, the appellant moved for a directed verdict, alleging that the proper measure of damages was the rental value of the land that was affected and that, since there had been no evidence of such rental value, there was no basis for a recovery by the appellee. This motion was denied.

The appellant objected to the court’s instruction on the measure of damages, contending that rental value of the land was the only proper measure of damages. The instruction read as follows:

If you find for John Dozier on the question of liability against Dickerson Construction Company, you must then fix the amount of money which will reasonably and fairly compensate him for the following elements of damages sustained by him, if proximately caused by the negligence of the said Dickerson Construction Company. The difference in the fair market value between the crop that the land would otherwise have produced and the crop that was actually produced, less the difference between what it would have cost to have produced, harvested and marketed an undamaged crop and what it would cost to produce, harvest and market the actual crop. Whether these elements of damages have been proved by the evidence is for you to determine.

The appellant contends that the appellee’s soybeans had not reached a sufficient stage of growth to have a value and that in the absence of such proof, the correct measure of damages would be the rental value of the property, citing Adams v. Adams, 228 Ark. 741, 310 S.W. 2d 813.

The appellant places a great deal of reliance on the following testimony of J. O. Hill, the County Agent of Lee County, who had observed the acreage in question from the air on July 11, and who had made an inspection of the area on October 28, prior to harvesting:

Q. What is the earliest date that beans are planted in Lee County, Mr. Hill?
A. The earliest planting is the last week in April.
Q. If you assume that the field was planted that early, would the crops have any market as of July 11th of the same year? Assuming its very earliest date.
A. The only thing I can think of is as far as use is concerned is you could cut it for hay, but no beans at this point.
Q. Even if you were to assume that it had maximum maturity, having been planted in the earliest period of time, April? It would have no market value on the date of this occurrence?
A. Not as beans. By the same token it is too late to plant another crop,

We feel that the appellant’s reliance on Adams v. Adams, supra, is misplaced because there was no evidence presented in that case that the crops involved had reached a stage of maturity sufficient either to have a market value or allow a reasonably certain estimate of the projected production. In light of testimony elicited from Mr. Hill during questioning by the appellee’s attorney, we find this case to be distinguishable from Adams.

Q. . . . but you have got your crop now in the middle of July and are you then in your opinion in a position to say well you have got a pretty good reasonable guess as to the production on it?
A. Well, you would know whether or not you had a stand. You would know whether or not you had good weed control going for you and also you would know whether your beans were up to normal size or what would be expected at this time, with a knee high type of a bean, and whether they were drought stressed and looking poor or whether you had a promising looking crop.
Q. In other words you have probably reached a stage where you could make a pretty good guess at it?
A. I think it would be within reason to state, you could say that things were either deteriorating and falling apart or you had something pretty good coming on.
* * *
Q. Now, what I am trying to say is that this is based upon your experience, your judgment, exercising your judgment. Can you not and can not most any competent farmer in the middle of July reasonably estimate his production? I understand that things are going to vary and happen and so forth, but over a long period of time, based upon your experience you get a pretty good idea about what your production is going to be, don’t you? A. I think you are right.

In Faires v. Dupree, 210 Ark. 797, 197 S.W. 2d 735, although we found that the plaintiff was not entitled to an award for damages to crops because there was just a vague suggestion that financial loss had occurred and there was no evidence presented that the crop had even been planted, we said:

* * * A rule is that where crops are so immature when destroyed as to have no market value, the measure of the damage is that for which the land would have rented. St. L. I. M. & S. R. Co. v. Saunders, 85 Ark. 111, 107 S.W. 194: Brown v. Arkebauer, 182 Ark. 354, 31 S.W. 2d 530; but if the crop has grown to a point where it can be said with reasonable certainty that a stated production would result, then damage is the value of such crop. Crumbley v. Guthrie, 207 Ark. 875, 183 S.W. 2d 47.

Although the testimony of Mr. Hill could be considered equivocal, we cannot say that there was no substantial evidence that the beans had reached a state where a reasonable estimate could be made of the expected production. A close parallel can be drawn between the facts in this case and those present in Crumbley v. Guthrie, 207 Ark. 875, 183 S.W. 2d 47, cited in Faires v. Dupree, supra. In that case, cattle owned by the defendant had been permitted to run at large in the plaintiff’s strawberry patch, resulting in a drastic decrease in expected yield. The damage to the strawberries occurred before the fruit had matured. We affirmed the award of damages, stating that “there is proof that sufficient progress had been made to promise a production much greater than that realized had the trespass not occurred,” relying on testimony from appraisers that from the appearance of the plants they were able to make a fairly accurate estimate of what the actual loss had been.

The actual value of a crop at the time of its destruction is to be ascertained from consideration of the circumstances existing at the time of its destruction, as well as at any time before trial, favoring or rendering doubtful the conclusion that it would attain to a more valuable condition and from consideration of the hazards and expenses incident to the process of supposed growth or appreciation. St. Louis, I.M. & S. Ry. Co. v. Hoshall, 82 Ark. 387, 102 S.W. 207. The rule is the same as to a crop damaged, if the jury believes that otherwise it would have matured, except that the costs of gathering and marketing must also be deducted. Missouri Pac. R. Co. v. Nichols, 170 Ark. 1194, 279 S.W. 354. The jury is permitted to find the actual value of the crop at the time it was damaged by considering its probable value at maturity, less the difference between the cost of production based on a full or probable crop, and to deduct from such production the cost thereof. W. B. Bynum Cooperage Co. v. Coulter, 219 Ark. 818, 244 S.W. 2d 955. See AMI, Civil, 2225.

While the damages recoverable cannot exceed the actual value of the crops at the date of the injury to them, plus legal interest, the jury, in arriving at that value, should consider the probable value at maturity, if they believe from the evidence that the crops would have matured, but for the actions of defendant. Railway Co. v. Lyman, 57 Ark. 512, 22 S.W. 170; Missouri Pac. R. Co. v. Nichols, supra.

Whether the soybeans had matured sufficiently to have a market value or to be susceptible to a reasonable estimate of the expected production at the time of the flooding of the appellee’s land thus became a question for the jury and unless reasonable minds could not differ on the question, the trial judge did not err in refusing to grant the appellant’s motion for a directed verdict. In the determination of whether there is substantial evidence to preclude the direction of a verdict, the judge must view the testimony and all reasonable inferences in the light most favorable to the party against whom the verdict is sought. Wheeless v. Eudora Bank, 256 Ark. 644, 509 S.W. 2d 532; Huffman Wholesale Supply Co. v. Terry, 240 Ark. 399, 399 S.W. 2d 658; Page v. Boyd-Bilt, Inc., 246 Ark. 352, 438 S.W. 2d 307. When we view the evidence in the light most favorable to the appellee, and draw all reasonable inferences therefrom, we cannot say that the trial judge erred in denying the appellant’s motion for a directed verdict at the conclusion of all the evidence.

Because the question of the maturity of the crop was for the jury, the appellant is correct in its contention that the binding instruction as to the measure of damages was erroneous. If the jury found that the crops were not sufficiently mature, then the measure of damages would be the rental value of the land. Faires v. Dupree, supra.

Appellant objected to the instruction given merely on. the basis that the wrong measure of damages was stated and by offering an alternate instruction that damages would be limited to the rental value of the land overflowed. This instruction was as defective as the one given. Neither recognized that there was an issue of fact which controlled the measure of damages. If the jury had found that the crop had reached that level of maturity that would justify a finding that it could be said that a stated production would result, then the measure of damages would have been the difference in the value of the crop that would have been produced and that actually produced, taking into account any difference in the cost of production. If the jury found otherwise, then the measure of damages was the rental value of the land.

A proper objection to a jury instruction must specify a correct ground and give the trial judge an opportunity to instruct the jury properly, and an objection lacking sufficient specificity is not sufficient. Baughman v. State, 265 Ark. 869, 582 S.W. 2d 4 (1979). Since the alternate instruction offered was not a correct instruction, the objection was not sufficient to justify reversal.

II

After the instructions were given, the jury retired to deliberate on the verdict. Sometime thereafter, a member of the jury requested of Deputy Sheriff Robert Guynes, who had taken the jury to the jury room, that he bring “the chart that was used with the beans” into the jury room. Guynes entered the courtroom, approached the appellee’s attorneys, who were seated at the counsel table, and informed them of the juror’s request. Guynes was given chart 1, containing the higher damage figures, which he delivered to the juror who had made the request. The jury returned its verdict approximately ten minutes later.

Neither the trial judge nor the appellant’s attorneys were present when this transpired and they were not aware of either the request made by the juror or Deputy Guynes’ actions. After learning what had occurred, the attorneys for the appellant moved for a mistrial. A hearing was held in which Deputy Guynes testified and the attorneys for both parties made statements. The motion was denied, the judge stating that he did not see any relation between the amount of damages on the chart and the verdict and that he felt it would have been proper to allow the jurors to enter the courtroom and observe the same figures displayed on a blackboard. A motion for a new trial on the same ground was also denied, after a hearing. It is conceded that all parties concerned acted in complete good faith. The trial judge stated that, in all probability, he would have granted a request by the jury for the chart.

Whether to allow the jury to have access to documents introduced into evidence, jury instructions or any other item or information, lies within the wide latitude of discretion vested in the trial judge. Rose v. King, 170 Ark. 209, 279 S.W. 373, Dodwell v. Mound City Sawmill Co., 90 Ark. 287, 119 S.W. 262, and the action of the trial judge will not be overturned unless there has been a manifest abuse of that discretion. Gardner v. State, 263 Ark. 739, 569 S.W. 2d 74, and cases cited therein. The trial judge is also vested with a considerable latitude of discretion in acting on a motion for mistrial or a motion for a new trial, and his exercise of that discretion will not be reversed in the absence of manifest abuse. Henslee v. Kennedy, 262 Ark. 198, 555 S.W. 2d 937; General Motors Corp. v. Tate, 257 Ark. 347, 516 S.W. 2d 602; Security Ins. Co. v. Owen, 255 Ark. 526, 501 S.W. 2d 229; Back v. Duncan, 246 Ark. 494, 438 S.W. 2d 690.

The procedure to be followed when a jury, which has retired for deliberation, requests additional information or clarification of some point is established by Ark. Stat. Ann. § 27-1734 (Repl. 1962). The statute reads:

Further instruction. — After the jury have retired for deliberation, if there is a disagreement between them as to any part of the testimony, or if they desire to be informed as to any point of law arising in the case, they may request the officer to conduct them into court, where the information required shall be given in the presence of or after notice to the parties or their counsel.

An identical procedure to be followed in criminal trials has been held to be mandatory. Ark. Stat. Ann. § 43-2139 (Repl. 1977); Williams v. State, 264 Ark. 77, 568 S.W. 2d 30 (1978); Golf v. State, 261 Ark. 885, 552 S.W. 2d 326; Jackson v. State, 256 Ark. 406, 507 S.W. 2d 705. The considerations in those cases are just as relevant in this case. The appellant’s attorneys had no opportunity to object to the jury receiving a chart which, in essence, summarized the appellee’s closing argument relating to damages. There was no opportunity for the appellant’s attorneys to request that an instruction be given which would limit the effect of the chart upon the jury’s deliberation or remind the jury that the chart was not evidence. The fact that the chart had not been admitted into evidence is itself of no small significance. Ark. Stat. Ann. § 43-2138 (Repl. 1977) provides: “[u]pon retiring for deliberation, the jury may take with them all papers which have been received as evidence in the cause.” We decline, however, to hold that allowing the jury to have access to something which has not been admitted into evidence will necessarily, without more, constitute an abuse of discretion. Other jurisdictions prohibit the jury access to anything which has not been in-traduced into evidence. See Lyon v. Bush, 49 Hawaii 116, 412 P. 662 (1966); Keeney v. Commonwealth, 345 S.W. 2d 481 (Ky., 1961); Newburgh Urban Renewal Agency v. Williams, 79 Misc. 2d 991, 361 N.Y.S. 2d 842 (1974); Gertz v. Bass, 59 Ill. App. 2d 180, 208 N.E. 2d 113 (1965). Although the amount of time spent in deliberations is not in and of itself indicative of possible prejudice or lack of fair trial, the fact that the jury returned its verdict only ten minutes after receiving the chart, is a factor to consider in a determination of whether the appellant’s cause may have been prejudiced.

Although it dealt with a criminal trial in which the jury foreman asked the bailiff if the fact that one of the jurors was acquainted with the primary prosecution witness would have any bearing on the deliberations of the jury, some of the language in Williams v. State, supra, is particularly pertinent to this case:

It has been held that failure to comply with such mandatory provision is prejudicial as a matter of law unless it is shown that no prejudice resulted or could have resulted from the non-compliance. . . It has also been held that lack of prejudice must be shown by clear and convincing evidence and that any doubt on the issue must be resolved in favor of the accused. . .
To begin with, we presume that any error is prejudicial unless we can say with confidence that it is not.. . One reason for placing such a heavy burden upon the state is the necessity for preserving the sanctity of the jury deliberations. . . . Another is because the conduct of the court officials in performing their duties and following the procedures prescribed for them should be such as to leave no possible suspicion of acting either pre-judicially or favorably to an accused. . .
The most difficult question is that of prejudice. We cannot say that lack of prejudice is manifest. The state actually concedes that it had the burden of proving that there was no prejudice. . . If the matter had been called to the attention of the trial court, the judge could have cautioned the jury that it must confine its consideration of the case to the evidence before it, disregarding any knowledge or information from any other source, save common knowledge. . . . [Citations omitted.]

In light of the facts of this case as set out in this opinion, we cannot say that the lack of prejudice to the appellant was manifest, because appellant had no opportunity to object or to ask the court to give the jury a cautionary instruction. Because of this, we find that the trial judge abused his discretion in denying the appellant’s motions for a mistrial and a new trial.

The judgment is reversed and the cause remanded for a new trial.

We agree. Harris, C.J., Holt and Purtle, JJ.


text:
    Vance JONES, Director, DEPARTMENT OF FINANCE AND ADMINISTRATION, State of Arkansas v. CARTER CONSTRUCTION COMPANY, INC.
    79-39
    583 S.W. 2d 63
    Opinion delivered July 9, 1979
    (In Banc)

      Robert G. Brockmann, Jack East, III, Barry E. Coplin, H. Thomas Clark, and Timothy J. Leathers, by: Joseph V. Svoboda, for appellant.

      Ted Boswell, P.A., by: David E. Smith, for appellee.
   John A. Fogleman, Justice.

Pursuant to a merger agreement entered into on December 1, 1974, the appellee, Carter Construction Company, Inc., acquired all of the assets of Carter and Cleaver Construction Company, Inc., on January 1, 1975. Both corporations were engaged in the construction business and therefore the assets acquired by the appellee, the surviving corporation, consisted primarily of heavy machinery and equipment. Prior to the merger, Carter and Cleaver had incurred a net operating loss of $95,182.80, which, had there been no merger, it would have been entitled to claim as a deduction in computing its net income for its 1975 Arkansas income tax return. Under the authority of Ark. Stat. Ann. § 84-2016 (1) (Supp. 1977), the appellee claimed this net operating loss carryover as a deduction from its net income.

Agents of the appellant, the Director of the Department of Finance and Administration, audited the 1975 income tax return filed by the appellee, disallowed the net operating loss deduction and assessed the appellee for additional tax due. The appellee appealed this determination and a hearing was held before the Arkansas Revenue Department Hearing Board, which sustained the disallowance of the appellee’s deduction. The appellee paid the deficiency under protest.

The appellee timely filed a complaint in the Chancery Court of Pulaski County to recover the amount of tax paid under protest, pursuant to Ark. Stat. Ann. § 84-2038 (Repl. 1960). The parties stipulated that the only issue for adjudication was whether appellee’s use of the assets acquired in the merger met the requirements of § 84-2016 (1) (3) (B), which governs the deduction of net operating losses incurred by acquired corporations. The relevant portion of the statute reads as follows:

. . . The Carryover losses will be allowed only in those cases where the assets of the corporation going out of existence earn sufficient profits in the post merger period to absorb the carryover losses claimed by the surviving corporation.

The merger met the requirements of that subsection.

Isaac Freeman Carter, Jr., president and chief executive officer of the appellee, testified that the equipment acquired in the merger was used in the day to day operations of Carter Construction Company, Inc., the records kept by the company did not reflect whether a particular piece of equipment had been utilized on a particular job and the appellee had not acquired any additional equipment since the merger. Carter stated that the equipment acquired in the merger was used on construction projects in 1975 and thereafter, “the same as equipment which was owned prior to the merger. ” During recross examination, Carter said it would not be possible to document the amount of money earned by each piece of equipment.

The accountant for the appellee during 1974 and 1975, Harry C. Keaton, testified that the assets acquired in the merger represented 28.67 percent of the total assets owned by Carter Construction Company after the merger. Keaton arrived at this figure by dividing the original cost of the equipment which was transferred from Carter and Cleaver by the original cost of all the equipment owned by the appellee after the merger. Keaton said that by computing 28.67 percent of the total profit earned by the appellee in 1975, he was able to determine the pro rata share of profits which was attributable to the equipment obtained in the merger. As a result of this computation, Keaton determined that the pro rata share attributable to this equipment was $151,500.54. Keaton explained the use of this method, which he felt was an acceptable method, by looking to Ark. Stat. Ann. § 84-2065 (Repl. 1977), which is a section of the chapter dealing with the apportionment, for tax purposes, of the income of a company which transacts business in several states. The cost of property located within the state is one of the three factors used to determine the amount of income to be apportioned in each state and § 84-2065 provides in part that: “[property owned by the taxpayer is valued at its original cost.” Keaton stated that this was probably the only method “we could come up with” to allocate the profits because the cost of equipment is the principal item on any construction contract. He thought it was an acceptable method because it was the only method available.

On cross-examination, Keaton admitted that the percentage figures could be vastly different if the book value (original cost less accumulated depreciation) was used rather than original cost and some of the equipment was old and had been depreciated greatly, and therefore had a very low book value. Using the book value of the equipment, Keaton arrived at a figure of 15.1 percent as the percentage the Carter and Cleaver equipment comprised of all the equipment owned by the appellee after the merger. He said that there was no way to determine whether an older piece of equipment would generate the same amount of income as a newer piece of equipment, but that he thought that two comparable pieces of equipment would generate the same amount. Keaton said income, payroll and direct labor cost were some additional accepted procedures which could have been used to determine the percentage represented by the acquired equipment, but that such information was not available. He also stated that segregating the records would present an enormous accounting problem because the businesses had been operated as a single unit for three months when the controlling statute on a net operating loss carryover on merger was amended to its present form, and made effective January 1, 1975.

At the conclusion of Keaton’s testimony, the appellee rested its case and the appellant moved that the case be dismissed due to the insufficiency of the evidence, pursuant to Ark. Stat. Ann. § 27-1729 (Repl. 1962). The attorney for the appellee then stated that it was the appellee’s position that the testimony presented was sufficient to support a judgment in its favor and that the appellant had offered no evidence to rebut that offered by the appellee, and asked that the motion be denied and judgment entered in favor of the appellee for the stipulated amount. The court reminded the attorney for the appellee that if the motion were denied, the appellant might wish to offer some testimony at which time the attorney for the appellant said: “I stand on the Motion, Your Honor.” The trial judge then denied the motion of the appellant and entered judgment in favor of the appellee for the stipulated amount of $5,710.97, plus interest.

The final paragraph of § 27-1729 provides:

* * * If the motion be overruled, then the party filing the motion may save exceptions and proceed to take proof or elect to stand on his motion, and appear to the Supreme Court. In the event the motion is overruled and the party making it elects to stand on the motion and appeal to the Supreme Court and the Lower Court’s action in overruling the motion be affirmed, it shall constitute a final judgment in the case.

This court was first called upon to deal with this statute in Werbe v. Holt, 217 Ark. 198, 229 S.W. 2d 225. In that case, a motion to dismiss had been sustained by the trial court and the plaintiff appealed. The appellant contended that it was only necessary that a plaintiff establish a prima facie case in order to defeat the motion, while the appellee contended that the judge was to weigh the evidence in ruling on the motion. In reversing the trial court, we said:

* * * By the overwhelming weight of authority it is the court's duty, in passing upon either a demurrer to the evidence [now referred to as a “Motion to dismiss for insufficiency of the evidence” in Arkansas practice] or a motion for judgment in law cases tried without a jury, to give the evidence its strongest probative force in favor of the plaintiff and to rule against the plaintiff only if his evidence when so considered fails to make a prima facie case. * * *

In Crump & Rodgers Co. v. Southern Implement Co., Inc., 229 Ark. 285, 316 S.W. 2d 121, it was said: “So, under the rule of Werbe v. Holt, we give the appellee’s (plaintiff’s) case its strongest probative force; and if there be any substantial evidence to support the decree of the Chancery Court, then we must affirm.”

Even though appellee had the burden of proving clearly that he was entitled to the exemption, when we apply the above principles to the facts of this case and give the evidence its strongest probative force in favor of the appellee, we cannot say that there is no substantial evidence to support the chancellor’s decision and affirm his decree. We do not view the matter as we would had appellant rested without offering any evidence after his motion was denied. The chancellor was not permitted to weigh the evidence when the appellant chose to stand on his motion. Carter had testified that: the acquired equipment was used in the daily operations of the appellee; it would be impractical, if not impossible, to maintain records of which piece of equipment worked on which jobs; and it would be impossible to determine the amount of income each individual piece of equipment had earned. Keaton testified that: he had used the only acceptable method available to him'to determine the pro rata share of income earned by the acquired equipment; the use of the original cost of property rather than the book value was required by the Arkansas Statutes in the division and apportionment of income earned by multi-state corporations; and the information necessary to use one of the other methods to arrive at a pro rata share attributable to the appellee was not available to Keaton. In light of the foregoing testimony, we find substantial evidence to support the chancellor’s decision that the appellee had presented a prima facie case to prove that the equipment acquired by the appellee in the merger with Carter and Cleaver had generated income of $151,500.54, an amount sufficient to absorb the carryover net operating loss of $95,182.80 claimed by the appellee and therefore affirm the judgment.

Harris, C.J., dissents.

Carleton Harris, Chief Justice, dissenting. The statute provides:

In the case of the acquisition of assets of one domestic corporation by another domestic corporation, the acquiring corporation shall succeed to and take into account any net operating loss carryover that the acquired corporation could have claimed had it not been acquired, subject to the following conditions and limitations:
A. The net operating loss may not be carried forward to a taxable year which ends more than three years after the taxable year in which the loss occurred.
B. The net operating loss may be claimed only when the ownership of both the acquired and acquiring corporations is substantially the same; that is, where not less than eighty per cent (80%) of the voting stock of each corporation owned by the same person or persons. The carryover losses will be allowed only in those cases where assets of the corporation going out of existence earn sufficient profits in the post-merger period to absorb the carryover losses claimed by the surviving corporation. (My emphasis.)

I do not think the evidence submitted by appellee satisfied the condition which I have italicized. Carter testified that the assets acquired from Carter and Cleaver Company were used daily in the operation of appellee’s business and used on construction jobs in 1975. However, on cross-examination, it developed that there was no distinction made as to how much of the Carter-Cleaver assets were used after the merger; further, there was no knowledge of what equipment was used on a particular job. There were no separate records or documents reflecting how the assets were used by appellee prior or subsequent to the merger. Also, it would be impossible to determine how much money had been earned by the Carter-Cleaver assets, and how much money was produced by each piece of that equipment.

Appellee’s accountant testified as to the method he used to allocate the profits generated by the assets acquired by appellee from Carter and Cleaver Construction Company, and he said this method was acceptable because it was the only method available and because the state used the same basis in allocating profit between in-state and out-of-state income. However, he agreed that there were other acceptable accounting procedures that could have been used, but stated, “We did not have that information,” and he added that it would have been an enormous accounting problem to endeavor to segregate the records, and accordingly, would not have been practical.

I simply say that, irrespective of the reasons given, appellee did not demonstrate its entitlement to a tax deduction under the statute, and, of course, the burden was on appellee to clearly establish same.

I, therefore, respectfully dissent.