author: Carleton Harris, Chief Justice.

text:
    CANAL INSURANCE COMPANY v. Jack ARNEY and Bessie G. WHITE and Blanch PACE
    75-131
    530 S.W. 2d 178
    Opinion delivered November 24, 1975

      Pearson & Woodruff and E. Lamar Petlus, for appellant.

      Bob L Mayes and Jones & Segers, for appellees.
   Carleton Harris, Chief Justice.

This is an action for declaratory judgment originally brought by appellee, Jack Arney, against his insurer, Canal Insurance Company. Arney has been in the commercial trucking business for a number of years. On May 21, 1971, appellant issued its policy of liability insurance to appellee, granting coverage on certain tractors and trailers used in the business by Arney. On September 7, 1971, appellee, while operating one of the tractors which was towing a trailer not listed in the coverage, collided with a passenger vehicle occupied and operated by appellees Bessie G. White and Blanch Pace. White and Pace instituted suit in the Washington County Circuit Court against Arney, seeking 87,550 damages. Arney made demand upon appellant to conduct his defense under the terms of his policy, but appellant declined to do so, asserting that the policy did not afford coverage on the trailer that was being towed and the company had no liability. Following the filing of the complaint, wherein the agent for appellant was also named a defendant, and the filing of an answer, appellant filed a third party complaint, styled “Counter-claim and Cross-complaint for Declaratory Judgment,” alleging that the company which owned the trailer involved in the wreck had primary coverage and the duty to defend, and appellant also asked that rights between appellant and White and Pace be adjudicated. On tfial, the circuit court found that the insurance policy wafe ambiguous and unclear as to its definition and meaning of the word “trailer,” and that appellant was under a legal duty and obligation to defend the pending litigation which White and Pace instituted against Arney. Arney was awarded an attorney’s fee of $2,500. From the judgment so entered comes this appeal.

The appeal in this case will have to be dismissed because of non-compliance with Supreme Court Rule 26A dealing with extension of time for appeal, and non-compliance with Ark. Stat. Ann. § 27-2127.1 (Supp. 1973).

Rule 26A reads as follows:

“Effective August 1, 1973, in the absence of a showing of unavoidable casualty all appellate records must be filed with the Clerk in compliance with Act 206 of 1971 (Ark. Stat. Ann. § 27-2127.1 [Supp. 1971]), which provides that a trial court may extend the time allowed for the docketing of an appeal if the court (a) finds that the extension is related to the inclusion in the record of evidence stenographically reported and (b) enters the order of extension before the expiration of the period for filing and docketing as originally prescribed or extended by a previous order. Counsel seeking such an extension shall give to opposing counsel notice of the application for an extension of time.”

Section 27-2127.1 reads as follows:

“The record on appeal shall be filed with the appellate court and the appeal there docketed within 90 days from the date of filing the notice of appeal; except that, the trial court may prescribe the time for filing and docketing, which in no event shall be less than 90 days from the date of filing the first notice of appeal. In all cases where there has been designated for inclusion any evidence or proceeding at the trial or hearing which was stenographically reported, the trial court, after finding that a reporter’s transcript of such evidence or proceeding has been ordered by the appellant, in its discretion and with or without motion or notice, may extend the time for filing the record on appeal and docketing the appeal, if its order for extension is made before the expiration of the period for filing and docketing as originally prescribed or extended by a previous order; but the trial court shall not extend the time to a date more than seven (7) months from the date of the entry of the judgment or decree.”

The trial court entered judgment in the instant case on November 12, 1974, and appellant filed its notice of appeal on December 2, 1974. The 90th day following the filing of the notice of appeal was March 2, 1975, which was on a Sunday, which fact would have permitted the record to be filed the next day. The transcript reflects the following order filed by the trial court on March 31, 1975:

“On this 28th day of February, 1975, due to the excessive number of appeals, inability of Court Reporter to prepare transcripts in the required time and at the request of Plaintiff and Defendant, an additional ninety (90) days is granted from the 2nd of March, 1975, within which to prepare and file a transcript in the above styled cause.

Nunc pro tunc.”

Section 27-2127.1 (Act 206 of 1971) amended Section 20 of Act 555 of 1953 and the provisions of this statute were before us in Gallman v. Carnes, 254 Ark. 155, 492 S.W. 2d 255. In Gallman, supra, Gallman had obtained an extension of time to file a record, even though no evidence had been reported stenographically, but the record was not filed until after the original time had expired. Appellees sought a dismissal of the appeal, since appellant had not shown that an extension was needed because of stenographically reported evidence. We refused, however, to dismiss the appeal, stating:

“In similar situations, when new procedural statutes have changed familiar steps involved in the appellate process we have stretched our authority to its fullest extent to avoid hardships to lawyers and to litigants.”

We then adopted Rule 26A which appeared in the Appendix to the Opinion. This rule became effective August 1, 1973. Two other decisions have construed Rule 26A, but neither is in point with the instant case. In O’Bier v. Safe-Buy Real Estate Agency, Inc., 256 Ark. 574, 509 S.W. 2d 292, appellant filed an application for an extension of time within the 90 day period, but failed to give notice to opposing counsel. We refused to dismiss the appeal, pointing out that there was not the slightest intimation that appellee could have successfully resisted the application even though notice had been received, or that it was prejudiced in any way by its failure to receive notice. In Perry v. Perry, 257 Ark. 237, 515 S.W. 2d 640, appellee sought dismissal because appellant had obtained an extension of time under Rule 26A for alleged improper reasons, it being contended that the extension was sought, not because the court reporter was unable to meet the deadline for preparing the record, but because appellant’s counsel desired more time to prepare his brief. We actually did not pass on the question raised by the motion to dismiss (that the extension had been granted for improper reasons), stating only that the proof was not clear, but we did comment that the legislative purpose in enacting § 27-2127.1 was to eliminate unnecessary delay in the docketing of appeals to this court.

It is at once apparent that none of these decisions touch the question here at issue, and we have not heretofore had presented to us a motion to dismiss under the rule where an appellant has utterly failed to obtain an extension of time for filing the record prior to the expiration of the 90 day period.

While the trial court’s written order extending the time is not dated, it is admitted that it was not signed within the 90 day period; the order was filed on March 31, 1975, nearly 30 days after the original 90 days had expired. Of course, the “nunc pro tunc” means nothing, for courts are not permitted to enter an order “now for then” simply because such an order should have been entered at that time, but nunc pro tunc orders are only properly issued where such an order actually was made, but through clerical misprision, was not entered.

Appellant contends that appellees White and Pace,

“have no standing to raise the issue in that they are only incidental parties to this lawsuit; (b) White and Pace have failed to allege or show that they have or were prejudiced in the slightest by the extension granted by the trial court on February 28, 1975, and there is no intimation and no evidence submitted, alleged, or which can be adduced that White and Pace, if given notice, could have persuaded the trial court that the request for an extension should not be granted; (c) That evidence concerning the taking of an extension of time, if requested and taken by a Judge, designated by this Court, will demonstrate that the attorneys of record at all times knew that an extension in which to file a transcript was required due to the workload of the Court Reporter, that the order was issued by the Trial Court Judge on or prior to the 28th day of February, 1975; that directions and instructions given the trial court’s reporter concerning the extension in which to prepare and file the transcript were given by the Trial Court prior to February 28th; and that from the date of the trial itself each and every attorney participating in this trial knew of the overloaded conditions facing the court reporter which would require an extension of time in which to allow the court reporter to prepare said transcript.”

The short answer to the argument that White and Pace have no standing to make this motion is that appellant initially made White and Pace parties to the suit in its “counter-claim and cross-complaint,” wherein they prayed that “Canal should be held free of any and all claims by the cross-defendant (s), Bessie G. White and Blanch Pace.” As to prejudice, it might be said that this requirement does not appear in the rule; however, it is probably quite true that if this were the only question involved, or if failure to notify appellees’ counsel were the only question involved, we might well take a different view. Of course, general knowledge of a reporter’s workload cannot be considered sufficient to create a waiver of the rule.

Appellant argues that sustaining of the motion to dismiss would create an intolerable situation for court reporters and that the simple ordering of a transcript would place upon a court reporter a burden to produce such transcript within 90 days since, “There is no legal requirement for Appellant’s counsel to ask or move for an Extension of time in which to file the record on appeal and docket the appeal. ”

We have no intention of placing such a burden upon the court reporter. Rather, we think this responsibility is on an appellant. That party is the purportedly aggrieved party, and unquestionably the principal one interested in, and to be benefited by, a reversal of a trial court judgment. We think it obvious that, having this paramount interest, the appellant shoulders the obligation to comply with all steps in a proceeding that might redound to his (or its) benefit.

We might also point out that this is not a matter where counsel for appellees waited until after briefs had been filed, and then made their motion to dismiss the appeal. Rather, on May 2, 1975, over a month and a half before appellant’s brief was due, appellees filed a partial record and made their motion to dismiss the appeal. A response was filed and on May 27, this court passed the motion until “case heard on merits,” requiring the motion to be briefed.

As previously stated, none of the three cases herein cited, related to an extension which was not granted within the original 90 day period — and this is the very crux of the rule. Appellant argues that a trial court, under § 27-2127.1, “In its discretion and with or without motion or notice, may extend the time for filing the record on appeal and docketing the appeal ***.” That is true, but the wording immediately following the word “appeal” reads, “if the order for extension is made before the expiration of the period for filing and docketing as originally prescribed or extended by a previous order ***.” [Emphasis supplied.]

For the reasons herein stated, the appeal is dismissed. Since this motion was passed until the case was heard on its merits, the motion being briefed along with the merits of the controversy, and all court members having studied the entire briefs, it might be added that the judgment, even if considered on its merits, would be affirmed.

      The nunc pro tunc was written in longhand.

      Proper terminology would have been, “This order having been made on February 28, 1975, but through clerical error not having been noted, same is entered nunc pro lunc.”

      Counsel for all appellees stated in their briefs and stated in oral argument that they had not been notified of the request for extension of time. Of course, these are only statements, and this decision is not predicated on that fact, though the quoted portion of appellant’s brief would indicate that there was no notice.

       It is not clear whether counsel mean that Rule 26A cannot be considered a “legal requirement,” or whether counsel have overlooked the last line of the rule which commences, “Counsel seeking such an extention ***.” This is the only part of the rule which specifically refers to the attorneys, though we consider it apparent that the entire rule relates to duties of counsel.


source: Caselaw Access Project

author: George Rose Smith, Justice.

license: Public Domain

text:
    STEELE INVESTMENT COMPANY v. CITY of FAYETTEVILLE
    75-156
    529 S.W. 2d 653
    Opinion delivered November 24, 1975

      Ball, Gallman & Martin, for appellant.

      James N. McCord, for appellee.
   George Rose Smith, Justice.

This is a zoning case. The appellant, Steele Investment Company, owns a 400-acre tract on the west side of Highway 71 Business, which runs north through Fayetteville. The property was formerly used for raising green beans. In 1966 the highway department obtained a right-of-way across the tract for the construction of Highway 71 By-pass. That left on the south side of the Bypass the 45-acre tract involved in this case, which is labeled “Steele” upon the following sketch taken from one of the exhibits:

Since then the property has been used for pasturing cattle.

In 1973 Steele applied to the city to change the 45-acre tract from an agricultural or residential classification to a commercial (C-2) classification. The City Planning Commission and the Board of Directors refused to rezone the entire tract. The Board, however, did rezone 8.9 acres, lying east of the dotted line on the sketch. That partial rezoning gave a C-2 classification to a depth of 617 feet back from Highway 71 Business, which is the same depth and classification as that already applicable to James E. Lindsey’s rectangular tract to the south, marked “C-2” on the sketch.

Steele then brought this suit in the chancery court to set aside the city’s action as arbitrary, capricious, and unreasonable. The chancellor, in a carefully prepared, detailed opinion, denied relief. There is no dispute about the standard for review in this court. We sustain the decree unless the chancellor’s finding that the city did not act arbitrarily is against the preponderance of the evidence. Downs v. City of Little Rock, 240 Ark. 623, 401 S.W. 2d 210 (1966).

We cannot say that the Planning Commission and the Board of Directors acted arbitrarily. Highway 71 Business, as it passes through Fayetteville and continues north to Springdale, has many commercial establishments on both sides of the road. The traffic engendered by those places of business, combined with the through traffic on the highway, created such congestion that the movement of vehicles was materially slowed down. It was for that reason that the highway department constructed the By-pass, to afford through traffic an alternative route avoiding the congestion on Highway 71 Business.

The city’s comprehensive long-term plans for the Bypass harmonize with the highway department’s rezoning. There are several major east-west thoroughfares that cross the By-pass. Those intersections are controlled by traffic lights. The city intends to restrict commercial zoning on the By-pass to the vicinity of those major intersections. In that way the city expects to avoid on the By-pass the traffic congestion that was created by the proliferation of commercial establishments along Highway 71 Business.

We cannot say that a clear preponderance of the evidence shows the city’s plan to be arbitrary, as applied to Steele’s 45-acre tract. As in most zoning controversies, Steele seeks a commercial classification in order to sell or use all or part of his land more profitably than is possible under its present classification. That single consideration, however, is not controlling, else spot zoning would be encouraged rather than discouraged by the law. The city’s proof indicates that the volume of traffic on the By-pass, with its attendant noise, will not be so great as to prevent the use of Steele’s land in its present classification. The chancellor found that proof to be persuasive.

We do not give especial weight to the fact that Steele’s application for rezoning was not opposed by neighboring landowners. It is fair to suppose that other property owners along the By-pass would like to see Steele’s property devoted to commercial use, strengthening their own claim to like treatment. The chancellor, however, chose to give the city’s long-range plan a chance to prove its worth, rather than weakening or perhaps destroying it at the outset. We cannot say that his decision is clearly against the weight of the evidence.

Affirmed.

Byrd, J., dissents.


text:
    Chloe COURSON, Administratrix v. Leo CHANDLER
    75-161
    529 S.W. 2d 864
    Opinion delivered December 1, 1975

      John F. Gibson, Jr., for appellant.

      Switzer, Switzer & Draper, for appellee.
   George Rose Smith, Justice.

This is an action by Leo Chandler, the appellee, for personal injuries sustained in a collision between his car and one driven by the appellant’s decedent, Tressie Lytal, who later died from causes unrelated to the accident. The jury awarded Chandler $10,000. Four points for reversal are urged by the appellant.

Only a brief statement of fact is needed. On the afternoon of May 11, 1971, Chandler was traveling south on Highway 82 in Ashley county. Mrs. Lytal, traveling north, emerged from behind another vehicle ahead of her and, with no signal, tried to turn left across the highway into the premises of the Catfish Inn. Chandler applied his brakes and laid down 90 feet of skid marks, but he struck the Lytal car in his own lane of traffic. Mrs. Lytal told the investigating officer that she did not see the other car before the collision.

I. Before the trial the court granted Chandler’s motion to instruct the attorneys, the parties, and the witnesses to make no reference to the fact that Mrs. Lytal had no liability insurance at the time of the collision. The ruling was correct, because Mrs. Lytal’s lack of insurance protection had no bearing upon the questions at issue. “Where nothing has been done or said from which the jury might infer that the defendant is protected by liability insurance it is improper for defendant to show that he does not have insurance protection.” Annotation, 4 A.L.R. 2d 773 (1949).

II. At Chandler’s request the court gave AMI 901, which explains the duty of a driver to keep a lookout, to keep his vehicle under control, and to drive at a speed no greater than is reasonable in the circumstances. AMI Civil 2d, 901 (1974). The appellant contends that the instruction was abstract, because there was no proof that Mrs. Lytal was driving at an excessive speed or failed to keep her car under control.

Even if the instruction was abstract, the error was harmless. Where an abstract instruction may mislead or confuse the jury, as by permitting a finding of liability upon an issue unsupported by proof, prejudicial error is shown. Johnston v. Pennington, 105 Ark. 278, 150 S.W. 863 (1912). But the giving of an abstract instruction is not reversible error when it could not have resulted in prejudice to the appellant. National Union Ins. Co. v. School Dist. No. 60, 131 Ark. 547, 199 S.W. 924 (1917).

That is the situation here. AMI 901 does not submit an issue; it merely explains the duties of both drivers. If the jury applied the instruction to either driver it would have been to Chandler, who was driving at 55 miles an hour in an area that was built up with commercial establishments and who left 90 feet of skid marks before striking the car crossing his path. Thus the instruction was not abstract as to Chandler, and we can say with confidence that it could not have confused or misled the jury with respect to Mrs. Lytal’s driving. Hence no prejudicial error is shown.

III. After the jury had retired counsel for the defendant objected “to the plaintiff’s closing arguments where he asserted that the heirs of the estate are not parties to the action, thereby unduly impressing upon the jury that they do not stand to lose.” Had the objection been made more promptly the court would have had an opportunity to admonish the jury. As it was, the objection came too late. Caldwell v. State, 214 Ark. 287, 215 S.W. 2d 518 (1948).

IV. We cannot say that the SI0,000 award is excessive. The trial was held three and a half years after the accident. The record suggests that Chandler was still suffering from visible nervousness, that his hands were trembling. Mrs. Chandler testified that her husband had not had a good night’s sleep since the collision. At the time of the trial Chandler was still taking medicine twice a day for his nervousness. He sustained injuries to his head, his back, and his knee, the latter still being numb when the case was heard. The proof would support a finding of pecuniary losses totaling $887.60, plus a substantial but indeterminate amount for the purchase of medicine in the past and in the future. The jury had the. opportunity to observe Chandler’s condition at first-hand. We do not find the award either shocking to the court’s conscience or indicative of passion or prejudice on the part of the jury.

Affirmed.


author: John A. Fogleman, Justice.

text:
    ARKANSAS POWER & LIGHT COMPANY v. Jennie D. JENNINGS
    75-141
    529. S.W. 2d 866
    Opinion delivered December 1, 1975

      House, Holmes & Jewell, for appellant.

      James M. McHaney, John C. Calhoun Jr. and Owens, McHaney & McHaney, for appellee.
   John A. Fogleman, Justice.

Arkansas Power & Light Company took an 8.4791-acre strip of land for right-of-way through a 315-acre tract owned by Mrs.Jennie D. Jennings. The jury awarded the landowner $22,350 as just compensation. We find no reversible error on any of the four points relied upon by appellant. We will discuss them in the order they are presented by appellant.

THE TRIAL COURT ERRED IN PERMITTING APPELLEE TO INTRODUCE PROOF AS TO SPECIAL DAMAGES SUFFERED BY THE JENNINGS PROPERTY OUTSIDE THE RIGHT-OF-WAY WHEN THEY WERE NOT SPECIFICALLY PLED.

William B. Putnam testified for the landowner as an expert witness. One item of testimony which appellant found objectionable was to the effect that Putnam, upon measuring the right-of-way, found it to be 191 feet wide at one point, but meandering back into the 180-foot width described in the complaint. Appellant’s attorney objected upon the ground that appellee had not pleaded the taking of a wider right-of-way and that he did not know that this question was in issue. This objection was overruled and no other objection was made to this testimony. A second item to which appellant objected was testimony of K. E. Sorrels about the effect of the use of the right-of-way on the waters of Fletcher Creek which flowed through the Jennings tract. Appellant’s attorney again objected that this type of damage had not been specifically pleaded. When this objection was overruled, no further objection was made.

In neither instance did appellant plead surprise or move for a continuance to enable it to prepare to controvert the evidence after the objections made were overruled. Appellant’s principal reliance is placed upon Arkansas Louisiana Gas Co. v. Verser, 251 Ark. 764, 475 S.W. 2d 148. But there the condemnor not only objected, it moved for a mistrial and in the alternative for a continuance in order to prepare appropriate defenses. Even if we should say that these items were matters of special damage, the important consideration here is whether the appellant was taken by surprise and made a specific objection on that account. Foster v. Arkansas State Highway Commission, 258 Ark. 176, 527 S.W. 2d 601 (1975). In holding that there is no prejudicial error in admitting similar evidence in Arkansas Louisiana Gas Co. v. McGaughey Bros., 250 Ark. 1083, 468 S.W. 2d 754, we said:

(omitting citations)
*** When the trial court permits the introduction of evidence in the face of an objection that the point at issue was not raised by the pleadings, the effect of the ruling is to treat the pleadings as amended to conform to the proof. *** So the trial court’s ruling here was equivalent to treating the issue as if it had been asserted by a pleading amended at that stage of the proceeding. The purpose of requiring special damages to be pleaded is to prevent surprise. *** If appellant had pleaded surprise, when its objection was overruled, it might have been entitled to a continuance, if an issue of special damages not pleaded had arisen, in order to prepare to meet it. *** But where no surprise is pleaded and no time requested to prepare to meet the issue, there is no error. ***

This language is peculiarly applicable here. In addition, Putnam did not attribute any particular amount of damage to any of these elements. He stated that the value of the Jennings tract before the taking was $597,208 and after the taking $540,343, leaving a difference of $56,865. He assigned a value of $16,101 to the right-of-way taken by applying a value of $1,900 per acre to the acreage the power company claimed to have been taken, not some larger area. He considered the remaining lands to be diminished $40,754 in value due to the taking. He was never afforded an opportunity to specify the amount of damage he attributed to these elements appellant considers impermissible. See Arkansas State Highway Commission v. Woody, 248 Ark. 657, 453 S.W. 2d 45.

THE TRIAL COURT ERRED IN PERMITTING APPELLEE’S VALUE WITNESS TO COMPARE LOT SALES TO THE LANDOWNER’S 315 ACRE TRACT FOR THE PURPOSE OF ESTABLISHING VALUE.

The witness Putnam testified that the highest and best use of the Jennings property was as suburban subdivision development and stated that he had studied the “so-called” comparative sales in the vicinity of the Jennings property in using the market data approach to property evaluation. He felt there were sufficient sales in the vicinity to give a reasonable degree of comparison to the Jennings property. One of nine that he specifically mentioned was the sale of 90 acres by Douglas to Colbert. The testimony giving rise to this objection arose in this manner:

Q. I believe you have testified that this last piece of property that Mr. Robinson referred to here and here were being used now as suburban type dubdivision?

A. That is correct, two tracts have sold for Twenty Five Hundred Dollars an acre.

When objection was made because of the non-comparability of “two acres” to the 315-acre Jennings tract, Putnam testified on further examination that the Jennings property was in a higher state of development than the property involved in the Douglas-Colbert transaction, that there were no sewer or water lines serving the Colbert property and no development there which was not in existence on the Jennings property on the date of taking. Putnam expressed the opinion that on the date of the taking, the Jennings property had a value of $1,900 per acre.

Appellant argues that by overruling its objection, the court permitted the witness to compare lot sales to the entire Jennings tract in arriving at his opinion as to value. This testimony was not given as a basis of Putnam’s opinion as to value. It was brought out only in support of his testimony as to the highest and best use of the Jennings property — a matter which was in issue. The sale that he considered as a part of his market data was the sale of the entire 90-acre tract rather than the ¿wo five-acre lots. The 90-acre tract itself was only one of nine sales Putnam found to be sufficiently similar to the Jennings tract to warrant his consideration. These two transactions were not offered as independent evidence of the value of the Jennings property (which included some rugged terrain as well as a creek bed) or its value if sold in five-acre lots. Strangely enough, no objection was interposed when Putnam, in earlier testimony and in response to requests that he describe these sales that he considered to afford a basis for his opinion, had stated that five-acre tracts from the Colbert land had sold at $2,500 per acre and that lots of the same size had been sold at the same price by the purchaser in another sale he considered as a part of his market data. Furthermore, appellant did not, at any time, ask that the jury be admonished that this testimony could not be considered as evidence of value of the Jennings property or that any limiting instruction be given. This point affords no basis for a finding of prejudicial error. See Arkansas State Highway Commission v. Sargent, 241 Ark. 783, 410 S.W. 2d 381; Arkansas Louisiana Gas Co. v. Verser, 251 Ark. 764, 475 S.W. 2d 148; Arkansas State Highway Commission v. Person, 258 Ark. 379, 525 S.W. 2d 77 (1975).

THE TRIAL COURT ERRED IN REFUSING TO ADMIT INTO EVIDENCE ALL THE FACTS SURROUNDING THE APPRAISAL MADE OF THE SUBJECT PROPERTY AT THE REQUEST OF THE EXECUTOR OF THE ZACK O. JENNINGS ESTATE.

The trial court refused to admit into evidence the Federal Estate Tax return of Zade O. Jennings, the late husband of appellee. Mr. Jennings died in 1972, and an estate tax was paid by his estate. Worthen Bank was the executor of his will. Louis East, who was called as a witness by appellant, made an appraisal as of July 31, 1972 for estate tax purposes. Appellant argues that, in addition to permitting the witness to state the values he assigned to the propeety when he made the appraisal, the court should have admitted the estate tax return and permitted East to state for whom he made the appraisal and for what purpose.

Cases cited by appellant holding that a valuation of property made by the owner for the purpose of taxation are inapposite, as are cases in which the evidence has been made admissible by statute. There is no evidence that Mrs. Jennings had anything to do with the valuation of the land or the selection of the appraiser, who was a former employee of the Worthen Bank.

The assessment or valuation of land for tax purposes by someone other than the owner is not admissible in evidence in Arkansas, in the absence of a statute. It was not error to exclude the return for estate taxes, because the determination of value by someone other than the owner for different purposes is not a fair criterion of its market value. Texas & St. Louis Railway Co. v. Eddy, 42 Ark. 527; Springfield & Memphis Railway Co. v. Rhea, 44 Ark. 258; St. Louis, I. M. & S. Ry. Co. v. Magness, 93 Ark. 46, 123 S.W. 786. These particular holdings relate to assessments for general taxation, and the rule on which they are based is well nigh universal as to valuations made by others than the owner, particularly in eminent domain cases. 5 Nichols on Eminent Domain 22-1, §22.1, and cases cited; Annot. 39 ALR 2d 209, 214 (1955); 1 Orgel on Valuation under Eminent Domain 633, § 151. See e.g., Mettee v. Urban Renewal Agency 213 Kan. 787, 518 P. 2d 555 (1974); Murdock v. United States, 160 F. 2d 358 (8 Cir., 1947); Johnson and Wimsatt v. Reichelderfer, 60 U.S. App. D.C. 186, 50 F. 2d 336 (Ct. Ap., D.C., 1931); Lienneman v. City of Omaha, 191 Neb. 442, 215 N.W. 2d 893 (1974); Connecticut Printers, Inc. v. Redevelopment Agency, 159 Conn. 407, 270 A. 2d 549 (1970); State v. Griffith, 292 Ala. 123, 290 S. 2d 162 (1974).

The rationale is frequently founded upon the basis that the valuation is res inter alios acta. 5 Nichols on Eminent Domain, 22-6, § 22.1; 1 Orgel on Valuation under Eminent Domain 634, §151 (1953); Mettee v. Urban Renewal Agency, supra; Annot. 39 ALR 2d 209, 228 (1955); Kansas City & G.R. Co. v. Haake, 331 Mo. 429, 53 S.W. 2d 891, 84 ALR 1477 (1932); Suffolk & Carolina Railway Co. v. Westend Land & Improvement Co., 137 N.C. 330, 49 S.E. 350, 68 LRA 333, 107 Am. St. Rep. 490 (1904). It is sometimes based upon unreliability because of non-participation by the owner; Annot. 39 ALR 2d 209, 225; See also, on unreliability, 1 Orgel on Valuation under Eminent Domain 629, §150; State v. 45,621 Sq. Ft., 475 P. 2d 553 (Alaska, 1970); sometimes as hearsay, Annot 39 ALR 2d 209, 226.

Of course, the same rationale would require the application of the rule of exclusion to estate tax returns and probate valuations in eminent domain proceedings. Wherever the question has arisen it has been applied, sometimes in total reliance upon cases holding tax assessments inadmissible. See, Holmes v. State, 109 N.H. 319, 251 A. 2d 320 (1969); City of LaMesa v. Tweed & Gambrell Planing Mill, 146 C.A. 2d 762, 304 P. 2d 803 (1956); Jones v. Iowa State Highway Commission, 259 Ia. 616, 144 N.W. 2d 277 (1966); United States v. 243.22 Acres, 48 F.S. 177 ED, NY, (1942). We are not concerned with the situation that might prevail if questions had been asked value witnesses on cross-examination. The circuit judge certainly was not too restrictive in his ruling in this case.

THE TRIAL COURT ERRED IN GIVING DEFENDANT’S REQUESTED INSTRUCTION NO. 10.

This actually was a request by appellant for the submission of forms of verdict to the jury. The court instructed the jury to determine the amount of compensation to be paid for the lands taken and then to fix separately the amount of damages, if any, to appellee’s remaining lands. The objection made to the court’s submission of the issue was that this method was misleading and focused attention on damages to the remainder. No objection was offered by appellant to an instruction stating that the first question for the jury’s decision was the amount of just compensation due for the strip of land taken and the second was whether there was any resulting diminution in value of the remaining lands, and if so, the amount of money that would compensate the landowner for that damage.

Appellant now makes the additional argument that the instruction permitted the jury to compensate Mrs. Jennings twice for the same land, and relies upon Arkansas Power & Light Co. v. Mayo, 244 Ark. 435, 425 S.W. 2d 531. Frankly, we do not see how the jury could possibly have been misled. We find the case relied upon by appellant totally different from this one. There the court found (4-3) that a combination of two separate instructions could have been confusing to the jury. One of them was taken to mean that the condemnor was liable for the full value of the tract taken and the other told the jury that it should determine the fair market value of the property before the taking and then the fair market value after the taking and award the landowner the difference. Whatever inconsistencies existed there are absent here.

We do not see how this instruction unduly focused attention on damages to the remaining lands. The jury was told by the instruction that it should “decide whether there are damages to the remainder” and, if it found that there were, to find the amount. The jury was further told that, if it found no damages to the remainder, it should write the word “None” in the blank provided for stating the amount of damages. We have previously held that similar instructions were not erroneous, where, as here, benefits are not to be offset against damages. Arkansas Louisiana Gas Co. v. Howell, 244 Ark. 86, 423 S.W. 2d 867. See St. Louis, I.M. & S. Ry. Co. v. Theodore Maxfield Co., 94 Ark. 135, 126 S.W. 83; 26 LRA (n.s.) 1111; Pine Bluff & W. Ry. Co. v. Kelly, 78 Ark. 83, 93 S.W. 562. See also Young v. Arkansas State Highway Commission, 242 Ark. 812, 415 S.W. 2d 575; Arkansas State Highway Commission v. Morris, 244 Ark. 1152, 429 S.W. 2d 114.

The judgment is affirmed.

      We do not pass on the question whether either or both of these elements were special damages. See, however. Arkansas State Highway Commission v. Dixon, 247 Ark. 130, 444 S.W. 2d 571; Arkansas Louisiana Gas Co. v. McGaughey, supra; Foster v. Arkansas State Highway Commission, supra.


author: J. Fred Jones, Justice. John A. Fogleman, Justice,

text:
    UNITED INSURANCE AGENCY, INC. v. Herbert Ray MARTIN
    75-158
    529 S.W. 2d 871
    Opinion delivered December 1, 1975

      Nolan, Anderson & Jones, for appellant.

      Mahony & Yocum, for appellee.
   J. Fred Jones, Justice.

This is an appeal by United Insurance Agency, Inc. from a chancery court decree in favor of the respondent-appellee Herbert Ray Martin in which the chancellor granted Martin’s motion for summary judgment on a petition filed by United for a restraining order and damages for breach of an employment contract. The petition alleged that United is an Arkansas corporation with principal offices located in El Dorado, Union County, Arkansas; that on or about May 24, 1972, Martin entered into an employment agreement with United Insurance Agency, a partnership, and that the plaintiff corporation had succeeded to the interest of the partnership in said agreement. A copy of the entire agreement was attached as an exhibit to the petition and its pertinent provisions are as follows:

“THIS AGREEMENT made and entered into this 24 day of May, 1972, by and between UNITED INSURANCE AGENCY, a partnership (hereinafter referred to as ‘UNITED’) and HERBERT RAY MARTIN, (hereinafter referred to as ‘MARTIN’).
WITNESSETH:
UNITED hereby employs MARTIN, and MARTIN hereby accepts employment from UNITED on the following terms and conditions:
1. MARTIN agrees to devote his entire time during his employment hereunder faithfully and diligently to the service of UNITED. During this employment, he will not, directly or indirectly, place any insurance whatsoever with or through any other insurance agency or company or the agent, representative or broker thereof, unless authorized and directed to do so by UNITED.
2. MARTIN agrees that within the territory assigned to him by UNITED he will solicit and procure applications for fire, life, casualty, accident, disability, health and all other types of insurance and will render such services to policyholders and perform such other incidental duties as may be requested of him from time to time by UNITED.
3. (a) MARTIN shall be paid such compensation as the parties may determine, from time to time, by mutual agreement during his employment. It shall not be necessary to set forth the compensation in writing but such compensation is and shall be a material part of the consideration for this Agreement.
(b) New York Life Insurance Company and/or other insurance companies pay commissions, and/or compensation direct to the individual broker. The parties specifically understand, covenant and agree that any and all commissions, checks, monies or compensation of any type or nature paid, accrued or due as a result of work performed by MARTIN while in the employment of UNITED belongs to UNITED and will be immediately endorsed and paid over to UNITED as its property; and
(c) In the event of the termination of the employment of MARTIN for any cause whatever, any and all commissions, monies, expenses, or compensation of any type or nature which has accrued at the date of termination or may thereafter accrue shall belong to and be the property of UNITED, regardless of when the same may be paid.
* * *
5. MARTIN AGREES that he will not, within a period of five (5) years following the date of the voluntary or involuntary termination of his employment with UNITED, either directly or indirectly, by and for himself, or as agent of another, or through others as his agent within an area of a radius of seventy-five (75) miles of the City of El Dorado, Union County, Arkansas:
(a) Engage in, or in any way be connected with, the fire, life, casualty, accident, disability, health or any other type of insurance business, directly or indirectly.
♦ * *
8. In the event of any breach or violation by MARTIN of this contract, UNITED shall have the right to enforce specific performance of all the agreements on the part of MARTIN. The rights and remedies given to or reserved by the employer hereunder shall be construed and held to be accumulated and not exclusive of any right or remedy otherwise available.
9.1 This contract may be terminated at any time by UNITED or MARTIN by mailing or delivering to the other written notice of termination.
9.2 Upon termination of MARTIN’S employment, his compensation and right to any compensation shall absolutely cease, and neither MARTIN nor any person, firm or corporation claiming under or through him shall have any claim whatsoever against UNITED for any compensation of any nature, except only for the agreed compensation which in the usual course of business had become certain and due and payable to MARTIN prior to the effective date of such termination.
9.2» No modification of or addition to this Contract shall be valid or effective for any purpose unless embodied in an endorsement of this Contract signed by a partner of UNITED and by MARTIN.”

The petition then alleged that on or about August 15, 1972, Martin terminated his employment with United and became associated with Benton, Owens, Martin, Inc., an insurance agency with principal offices located in Little Rock. The petition then alleged that subsequent to August 15, 1972, Martin had engaged in activities which violated the terms of the employment agreement with United; and, the petition prayed permanent injunction restraining Martin from the act of competing directly or indirectly with United within an area having a radius of 75 miles of the City of El Dorado for a period of five years from August 15, 1972. The petitioner then alleged monetary damages and prayed an award of such damages as United would be able to prove.

Martin filed motion for summary judgment alleging that there was no genuine issues as to the terms of the employment agreement; that the agreement is void and unenforceable, and that he was therefore entitled to a summary judgment in his favor. Martin also filed an answer in which he admitted that he was a resident of Pulaski County. He denied generally the allegations in the petition and alleged damages by way of counterclaim.

United filed a reply to motion for summary judgment in which it simply stated as follows:

“There are material issues of fact disputed in this cause and Defendant is not entitled to a Summary Judgment as a matter of law.
The Agreement involved in this dispute is not void and unenforceable as a matter of law.”

The appellant argues that the summary judgment should be reversed because in effect it makes all covenants not to compete invalid per se if they involve a period of five years. We do not so construe the effect of the chancellor’s decree or order granting the motion for summary judgment in this case. In determining the validity of a contract not to compete, the courts have always examined the facts and circumstances of the particular case. Miller v. Fairfield Bay, 247 Ark. 565, 446 S.W. 2d 660 (1969). It is apparent from the record that the chancellor did consider the contract, pleadings, briefs, and oral arguments in determining that the five year restriction was unreasonable and the contract void in this case. It would thus appear that the chancellor examined the particular circumstances surrounding this case and not solely the length of time involved in the covenant. Such examination of the facts, however, does not preclude a summary judgment. Ark. Stat. Ann. §29-211 (Repl. 1962 and Supp. 1973) sets out the procedure for summary judgment, and §29-211 (c) states the situations where a summary judgment is required as follows:

“. . . The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”

The agreement in this case was entered into between the appellee Martin and a partnership insurance agency. The agreement was then apparently assigned by the partnership to the appellant corporation. The agreement does not define the appellee’s allotted territory nor does it set out the remuneration the appellee is to receive for his services, but only provides that his compensation is to be determined from time to time by oral agreement. The agreement provides in express terms that it may be terminated at any time. The agreement not only provides in paragraph 3 (c) that Martin is to forfeit to United all remuneration accrued at the time of termination of the agreement for any cause, the agreement then attertipts to prevent Martin from engaging in, or in any way becoming connected with, the insurance business directly or indirectly within a radius of 75 miles of El Dorado for a period of five years.

It is true that upon a motion for summary judgment the burden of demonstrating the nonexistence of a genuine fact issue is upon the moving party (Wirges v. Hawkins, 238 Ark. 100, 378 S.W. 2d 646 [1964]), but in the case at bar the appellant does not challenge the judgment on the ground that there were facts in dispute, except by the mere allegation in its reply to the motion for summary judgment. We conclude that the chancellor was right in granting the motion for summary judgment in this case.

The decree is affirmed.

George Rose Smith and Fogteman, JJ., dissent.

John A. Fogleman, Justice,

dissenting. As I read the majority opinion, the court has held that a covenant not to compete within a radius of 75 miles of the City of El Dorado for a period of five years, contained in a contract of employment of an insurance salesman, which is terminable at will, is unreasonable and therefore void and unenforceable as a matter of law. Since I am unable to join the majority in this gigantic leap from the previous position that the reasonableness or unreasonableness of such a covenant is a question of fact, I dissent.

It appears that the majority is satisfied to take this step, abruptly, and without any supporting authority or reasoning. Actually, the only case on the subject cited in the majority opinion is cited to support the statement that the courts have always examined the facts and circumstances of the particular case in determining the validity of a contract not to compete. But the majority does not follow Miller v. Fairfield Bay, 247 Ark. 565, 446 S.W. 2d 660, after citing it, unless it intends to say that the trial court’s considering the pleadings, the briefs filed there, and oral arguments is some kind of substitute for an evidentiary hearing.

In Miller, we said:

We have pointed out that each case involving a restraint to compete must be determined by the facts of the particular case, and we have, accordingly, never laid down any rule governing provisions as to area or length of time. ***
*****
We conclude that, under the facts of this case, the contract, because of the length of the restriction not to compete, and the right of the employer to terminate employment, is against public policy, and void.

In between the two quotes the court does considerable weighing of the impact of evidence in the case.

This court has consistently followed the general rule that negative employment covenants are not illegal per se but that whether a restraint provision is valid depends upon its reasonableness, which is a matter to be determined under the particular circumstances. See McLeod v. Meyer, 237 Ark. 173, 372 S.W. 2d 220; Bailey v. King, 240 Ark. 245, 398 S.W. 2d 906; McCumber v. Federated Implement & Hdw. Insurance Co., 230 Ark. 13, 320 S.W. 2d 637. In Bailey, we said:

*** As we have pointed out, each case must stand upon its own facts. Here, there is no evidence that this was not a bona fide agreement. There is no evidence of trickery or chicane/y.

In McCumber, we said:

After a careful review of the legal and factual issues, we reach the conclusion that no injunction should have been issued under the state of facts here presented.

Significantly, in Hultsman v. Carroll, 177 Ark. 432, 6 S.W. 2d 551, we reversed a judgment sustaining a demurrer to such a complaint on a similar type of contract. The demurrer had raised the question whether the contract was void and unenforceable as a restraint of trade and contrary to public policy.

We have not been alone in that position, as demonstrated by the textwriter in 54 Am. Jur. 2d under the subject of Monopolies, Restraints of Trade, and Unfair Trade Practices. At p. 982, §543, he said:

As a general rule, an employment contract provision barring the employee from competing with the employer after termination of the employment is enforceable if reasonable and supported by a valuable consideration. There is no inflexible formula for deciding the ubiquitous question of reasonableness. Precedents are of little value, because the question of reasonableness must be decided on an ad hoc basis. The question whether the agreement will be enforced is to be determined in view of the circumstances of the case, but a stricter test of reasonableness is applied in employment-covenant cases than in sale-covenant cases.
There are certain elements which should always be considered in ascertaining the reasonableness of such agreements in employment cases, among which are the consideration supporting agreements, the threatened danger In the employer in the absence of such an agreement, the economic hardship imposed on the employee by such a covenant, and whether or not such a covenant would be inimical to the public interest. If, considered with reference to the situation or objects of the parties or other circumstances under or with reference to which they were made, and in the light of all the surrounding circumstances, the restraint appears to have been for a just and honest purpose, or the protection of the legitimate interests of the party in whose favor it is imposed, reasonable as between them, and not specially injurious to the public, the restraint will be upheld. An employee’s anti-competitive covenant is unenforceable if its true purpose is to repress the employee and prevent him from leaving, rather than to protect the employer’s business.

and then, at p. 983, §544:

An employee’s postemployment anticompetitive covenant is unreasonable and therefore unenforceable ichere it is broader than necessary to protect the employer’s business. ...

further, at p. 984, §546:

A postemployment anticompetitive covenant is justified where part of the employee’s services consist in creating the good will of customers and clients ivho are likely to follow him ivhen he leaves. The territorial scope of an anticompetitive covenant is reasonable if the area of restraint is no broader than the territory in ivhich the employee contacted the employer’s customers. Conversely, that no customers have been pirated is a factor tending to render the covenant unenforceable.

and, at p. 985, §548:

That an employee has no special skill tends to show the unreasonableness of his postemployment anticompetitive covenant. ***

and finally, at p. 985, §549:

*** But the employee's hardship is a factor in determining the reasonableness of his anticompetitive covenant, and in iveighing hardship the court will consider general business conditions, possible deprivation of support of the employee and his family, and the necessity of the employee’s changing his occupation or his residence. (Emphasis mine in each quotation.)

What answers are given to the pertinent factual questions posed as italicized above in appellee’s feeble, although effective, attempt to show that there were no genuine issues as to material facts? The majority has simply brushed this requirement aside without explanation, doubtless because there is none.

I would reverse the summary judgment and direct the court to proceed further in order that the facts and circumstances of the parties and their contract could be developed.

I am authorized to state that Mr. Justice George Rose Smith joins in this opinion.


author: Elsijane T. Roy, Justice. John A. Fogleman, Justice,

text:
    Dorothy W. ROSS v. ARKANSAS COMMUNITIES, INC. and WESTINGHOUSE CREDIT CORPORATION
    75-121
    529 S.W. 2d 876
    Opinion delivered December 1, 1975

      Wright, Lindsey & Jennings, for appellant.

      W. P. Hamilton, for appellees.
   Elsijane T. Roy, Justice.

Appellee Arkansas Communities, Inc. (ACI) is a real estate development company owning and developing property on Lake Catherine in Hot Spring and Garland Counties. The subdivision Diamondhead was incorporated in February 1969, and contains about 6,000 acres of land.

In April 1970, ACI entered into an agreement with Westinghouse Credit Corporation (Westinghouse) to afford financing for purchasers of Diamondhead lots. From April 1, 1970, to February 1973, approximately 1,049 sales were made and from these sales installment contracts were sold to Westinghouse, others were sold to Southern Credit Corporation and the balance of approximately 230 contracts were retained by ACI.

The president of ACI testified that appellant purchased two lots on installment sales contracts on June 14, 1970. The contracts called for down payments of $450 and $1,500, respectively. The down payments were never paid, and after 27 months her contract was canceled for nonpayment.

Appellant then brought this action alleging her contracts were usurious and that improper late charges were made. She also alleged common questions of law and fact exist and sought to represent all purchasers of lots who signed retail installment contracts with ACI. For relief appellant demanded that all installment contracts purchased by Westinghouse be canceled and set aside and the lands described in such contracts be conveyed free and clear to all purchasers.

Her complaint also seeks as a class action recovery for violation of the Truth in Lending Act, for illegal repossession of lots and for unjust enrichment.

The chancellor indicated approximately 833 separate installment contracts would be involved in this case, and he ruled it could not proceed as a class action.

Appellant appeals to this Court for a reversal of that ruling or alternatively requests a writ of certiorari or a writ of mandamus directing the chancellor to permit the case to proceed as a class action.

Appellant’s first contention is that the order of dismissal prohibiting the suit from proceeding as a class action is a final and appealable order. We agree with appellant. Although Mrs. Ross’ individual suit was not ended by the chancellor’s order, the action on behalf of the class members was ended. Thus, a distinct and severable branch of the case has been finally determined. Parker v. Murry, 221 Ark. 554, 254 S.W. 2d 468 (1953), and Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 40 L. Ed. 2d 732, 94 S. Ct. 2140 (1974).

Appellant contends her action is properly brought as a class action under Ark. Stat. Ann. § 27-809, which provides as follows:

Where the question is one of a common or general interest of many persons, or where the parties are numerous, and it is impracticable to bring all before the court within a reasonable time, one or more may sue or defend for the benefit of all.

On March 17, 1970, the financial vice president of ACI wrote to Westinghouse and proposed to sell to Westinghouse “all notes receivable generated from lot sales” at a discount to yield Westinghouse “a reasonable return (14% per annum simple interest, initially),” and Westinghouse accepted the proposal.

Although the retail installment contract executed by each purchaser contains an interest rate of 10% per annum, appellant contends she has made a prima facie case of usury because of the agreement between ACI and Westinghouse at 14% per annum as indicated.

In her brief and in oral argument appellant placed great reliance upon the case of Vasquez v. Superior Court of San Joaquin County, 94 Cal. Rptr. 796, 484 P. 2d 964 (1971). In Vasquez 37 plaintiffs had each executed two separate contracts, one for the purchase of a food freezer and the second for a frozen food pack allotment. The plaintiffs sued for rescission of the contracts for fraudulent misrepresentation on behalf of themselves and others similarly situated. The California Supreme Court granted a writ of mandamus to compel the trial of the case as a class action.

We find no analogy between the sale of a freezer and the sale of a lot with its many variables. There were established prices on the food freezers and frozen food pack allotments and no established prices on the lots in Diamondhead subdivision. Most sales of the lots were at prices considerably below the suggested list price. As the chancellor pointed out in his opinion:

Here we are dealing with real property, it’s not like a refrigerator or automobile where the price can be established by competition or in the general course of trade. Real property is an item which can be bought or sold for any price obtainable and there’s no established price upon it.

California has extended the scope of its class action statute more than the courts have in Arkansas and more than several other jurisdictions which will be cited herein.

Arkansas cases construing our class action statute seem to follow the more limited application. The Arkansas statute is a codification of the equitable doctrine of virtual representation. Lightle v. Kirby, 194 Ark. 535, 108 S.W. 2d 896 (1937); Baskins v. United Mine Workers, 150 Ark. 398, 234 S.W. 464 (1921).

To maintain a class action there must be an ascertainable class and a community of interests among the members of that class.

The interest of appellant is the right to have the validity of her individual contract determined. She has no interest in the validity or invalidity of the contracts of any other purchaser. Similarly no other purchaser has any interest in her contract. Their rights being several there cannot be a class action as there is not a common bond or common claim and each will stand or fall on its own individual merit.

The theory underlying a proceeding as a class action is that of virtual representation. Under such a proceeding all members of the class are bound by the result of a litigation and any attempt by such members to bring claims subsequently would be barred by res judicata. We considered this proposition in the case of Connor v. Thornton, 207 Ark. 1113, 184 S.W. 2d 589 (1945). An action had been brought by Ted Wynia and other homeowners against defendants D. P. and R. E. Thornton claiming damages caused by soot and other substances arising out of the operation of their sawmill. A jury verdict was rendered for defendants and there was no appeal. Subsequently, Connor brought an action against the Thorntons for damages arising from the operation of this same sawmill. At the trial level even though the case was not brought as a class action it was held that the previous case bound the instant plaintiffs on the theory of virtual representation and thus the matter was res judicata. On appeal the matter was reversed with directions to proceed to trial. This Court commented:

In the very nature of things, there would have been difficulty in prosecuting it as such, because values of the several properties were different, distances from homes to the mill varied, and damage would probably be in ratio to proximity of the property to the mill. . . .

We pointed out that although the cause of damage might have been common, nevertheless the causes of action would all be separate and independent with each cause being determined on its own separate individual facts. Ark. Stat. Ann. § 27-801 provides that every action must be prosecuted in the name of the real party in interest. The factual situation in this case does not warrant a deviation from this requirement.

Class actions are in derogation of the general rule of procedure and in addition to commonality of questions of law and fact it should be shown that the procedure is superior to other available methods for the fair and efficient adjudication of the controversy.

Moreover this Court must be realistic in its appraisal of the situation and we cannot ignore the serious practical problems which would arise if we allowed the case to proceed as a class action. Considerable expense would be involved. How could the limited staff of the chancery court take care of the necessary proceedings, answer the inquiries for further information on the 833 transactions and keep the members of the class advised as to the status of the case thereafter? It is apparent a maze of procedural difficulties would be encountered. Although practical aspects of a case are not controlling on this Court’s decision they are among the factors to be considered.

In the case of Colbert v. Coney Island, Inc., 97 Ohio App. 311, 121 N.E. 2d 911 (1954), three plaintiffs attempted to bring a class action alleging that they had been denied admission to an amusement park. In analyzing the statutory provisions, the court said:

The three plaintiffs herein obviously have a sympathetic interest in each other’s cause of action, but neither has any legal interest in the relief sought by each other. A common and important question of law is presented by each of the plaintiffs in which they have a community of interest, but their respective causes of action are separate and distinct. * * * Neither of the plaintiffs have any interest in the “subject of the action” of the other. (Emphasis supplied)

The rationale for disallowing a class action is well expressed in Fisher v. Health Insurance Plan of Gr. New York, 67 N.Y. Misc. 2d 674, 324 N.Y.S. 2d 732 (1971).

Separate wrongs to separate persons, though committed by similar means and pursuant to a single plan, do not alone create a common or general interest in those wronged. (Society Milion Athena, Inc. v. National Bank of Greece, 281 N.Y. 282, 22 N.E. 2d 374; Brenner v. Title Guarantee & Trust Co., 276 N.Y. 230, 11 N.E. 2d 890). Class actions may not be maintained when the asserted wrongs are individual to the different persons and each aggrieved person may determine for himself the remedy he will seek and may be subject to a defense not available to the others. (Gaynor v. Rockefeller, 15 N.W. 2d 120, 256 N.Y.S. 2d 584, 204 N.E. 2d 627).

The case at bar involves separate transactions, separate prepurchase negotiations with relatively different degrees of success in each, resulting in different prices on different lots. Each purchaser allegedly aggrieved may determine for himself the remedy he will seek and the defenses which he may or may not interpose, including usury.

Class action was denied in the case of Graybeal v. American Savings & Loan Association, 59 R.F.D. 7 (1973). There certain borrowers brought a class action on behalf of all persons who borrowed on their homes from defendant lending insitutions. Plaintiffs’ alleged breach of contract, unjust enrichment? usury, violations of the Consumer Credit Protection Act and violations of the Sherman Act.

The court held:

Plaintiffs’ breach of contract and unjust enrichment causes of action clearly involve questions of law or fact which will necessarily require answers based on each individual loan contract .... (Emphasis supplied)
* * * *
Again, the individual questions predominate over questions common to the proposed class. Whether the interest charged on a particular loan contract was usurious must be determined borrower by borrower, contract by contract.

Appellant grounds her own and the class action charges of usury on the caveat issued by this Court in the case of Hare v. General Contract Purchase Corporation, 220 Ark. 601, 249 S.W. 2d 973 (1952). By commenting on the application of the Hare case we do not imply that we are in any way determining the merits of the usury question. However, to determine if there are different factual questions to be passed on by the chancellor as to each transaction it is necessary to consider Hare.

Commonality is the key word in determining the propriety of a class action. However, the commonality required in a class action includes facts as well as law, and here we do not have uniformity of facts in the different sales.

In Hare we said:

(2) If the seller, whether he has quoted two prices to the purchaser or not, subsequently transfers the title documents to an individual or company which is engaged in the business or purchasing such documents, at a price which permits the transferee to obtain more than a return of 10% of its investment, then a question of fact arises as to whether the seller increased his case price with the reasonable assurance that he could so discount the paper to such individual or finance company. If that reasonable assurance existed, then the transaction is in substance a loan, and may be attacked for usury. (Emphasis supplied)

The phrase “then a question of fact arises as to whether the seller increased his cash price” is crucial in determining what appellant must establish for her individual claim and on behalf of each other purchaser of the lots whom she seeks to represent. One cannot be charged with having increased a price without showing that there was a price established. This is the first requirment of the Hare caveat. At the time appellant purchased her lots there had been no price established as to the lots.

Some of the lots had suggested prices which were supplied to the salesmen. Nevertheless actual sales were made at prices determined by bargaining back and forth. The negotiations were separate as to each individual customer. Once the price was agreed upon the customer could purchase the lot at that price for cash or by paying that price in installments evidenced by note or contract bearing 10% simple interest per annum. Moreover, very few sales, whether cash or financed, were sold at the suggested list price. Without determining facts in each individual transaction the chancellor could not ascertain if appellee increased such price to cover a discount bringing the transaction within the Hare caveat. It must also be established in each separate transaction that each salesman involved had not only increased the price to cover the discount but had reasonable assurance that a given finance company would in fact purchase the note or contract. Westinghouse had 10 days after receipt of a contract to accept or reject it. Whether the interest charged was usurious would necessarily have to be decided by the chancellor on a contract by contract basis.

In Lindsey v. Mid-State Homes, 239 Ark. 257, 388 S.W. 2d 551 (1965), in discussing the facts we said:

Jim Walters sold houses to appellants for a certain sum; a small amount was paid on the purchase price, the balance to be paid in monthly installments; a little less than 10% per annum was charged as interest on the unpaid balance. Jim Walters sold the notes for the unpaid balance to Mid-State Homes, Inc., its wholly owned subsidiary, at a discount of 20%. Appellants contend that the transactions amounted to usury under the decision in Hare v. General Contract Purchase Corporation, 220 Ark. 601, 249 S.W. 2d 973. (Emphasis supplied)

In Lindsey we also stated:

Under the decision in the Hare case, a situation of this kind gives rise to the question of whether the transaction is usurious. The chancellor held that it was not usurious and we cannot say the chancellor’s finding of fact is against the preponderance of the evidence.

Although very little of appellant’s brief is devoted to the Truth in Lending aspect of the case, having found that a class action would not be proper under the usury allegations of the complaint, we find many more variables in this contention and it would be even less appropriate for a class action. ACI and Westinghouse are required by the Truth in Lending Act to disclose to prospective customers the method of computing the amount of any default, delinquency or similar charges payable in event of late payments. It is quite evident there is even less “commonality” in these claims.

In Ratner v. Chemical Bank New York Trust Company, 329 F. Supp. 270 (S.D. N.Y. 1972), a Truth in Lending case, the court denied a credit card holder bringing the action for himself and others the right to proceed as a class action. Judge Marvin Frankel pointed out in Ratner the incentive of class action benefits is unnecessary in view of the Act’s provisions for a $100 minimum recovery, payment of costs and a reasonable fee for counsel. Furthermore, he stated that the allowance of this as a class action was essentially inconsistent with the specific remedy supplied by Congress.

For the foregoing reasons we affirm the chancellor’s holding that this case is not a proper class action.

Fogleman, J., concurs.

John A. Fogleman, Justice,

concurring. I concur because the issues were not confined to the question whether all the contracts were rendered usurious by appellee’s contract with Westinghouse Credit Corporation, which required appellee to submit all time purchase contracts to be submitted to the credit corporation. I do not feel that it is necessary to go any further in this case.

      Testimony in the record indicated the number to be 812.


text:
    Willie ROBINSON v. REBSAMEN FORD, Inc.
    75-162
    530 S.W. 2d 660
    Opinion delivered December 8, 1975

      Griffin J. Stockley, for appellant.

      Moses, McClellan, Arnold, Owen & McDermott, by: William L. Owen, for appellee.
   John A. Fogleman, Justice.

After having repossessed and sold an automobile Robinson had purchased from it on an installment sales contract, Rebsamen Ford, Inc., sued Willie Robinson to recover a deficiency j'udgment of $901.18. Robinson pleaded usury as an affirmative defense. He alleged that Rebsamen Ford had procured credit life insurance for him for a premium of $36.76, without disclosing to him that comparable insurance could have been purchased at a much cheaper price under Ford Life Insurance Group Policy No. 2200 and that he would have selected this policy if given an opportunity to do so. He also alleged that Rebsamen Ford was paid 35% of the premium charged to him on the insurance procured but no commission would have been paid to it on the Ford Life Insurance group policy. He alleged that the compensation derived by Rebsamen Ford, when added to the interest otherwise charged, produced a rate of return to Rebsamen Ford of more than 10% per annum and made the contract void for usury. This appeal comes from a summary judgment granted on the motion of Rebsamen Ford. Since we agree with Robinson that there was a material fact issue, we reverse.

Most of the critical facts were admitted. Rebsamen Ford could have procured coverage for Robinson under Ford Life Insurance Group Policy No. 2200 at a cost of 44 cents per $100 of credit per annum, while the insurance obtained came at a premium of 75 cents per $100 of credit per annum, or $36.76, from which Rebsamen Ford was paid a commission of $12.87. Of this commission, $6.56 was refunded by Rebsamen Ford when Robinson defaulted on the installment sales contract.

Appellee’s motion for summary judgment relied upon admissions as to the debt, default, repossession, sale of the automobile after repossession and failure to pay the deficiency. The only effort to negate the allegations and admissions upon which Robinson relied for his affirmative defense was the citation of Poole v. Bates-Pearson Auto Sales, 257 Ark. 764, 520 S.W. 2d 273, as controlling authority. Rebsamen Ford did, however, as a means of invoking stare decisis, attach to its motion the pleadings and judgment in three other cases in the Circuit Court of Pulaski County in which that court had held adversely to other debtor-purchasers raising the same factual issue. We do not further consider this phase of the motion since it is not applicable in this court, even though it may have been insofar as the trial court was concerned.

In his response to the motion for summary judgment, Robinson incorporated the affidavit of Keith Sloan, the life and health actuary of the Arkansas Insurance Department, who stated that his duties included approval of forms and rates and processing of statistics relating to credit life insurance. He deposed that benefits identical to those obtained by Robinson in the policy issued were offered at a cheaper price by eight insurance companies. He also stated that the principal difference in the cost of the policy Robinson was issued and Ford Life Group Policy No. 2200 was attributable to the compensation allowed to the agent and that the differences in eligibility for coverage and risks covered by the two policies were considered minor by the industry and the Insurance Department.

Robinson’s own affidavit was to the effect that he was not informed by Rebsamen Ford that he could have obtained a less expensive policy which provided the same benefits as the one by which he was covered. Otherwise, Robinson voluntarily elected to take the insurance issued. It was admitted that several of appellee’s employees, including members of its sales and clerical staffs possessed some information concerning costs and benefits of credit life insurance. The installment sales contract recites that the finance charge, calculated on the unpaid portion of the purchase price and the insurance issued, was calculated on the basis of 10% per annum.

Appellee’s and the circuit court’s reliance upon Poole v. Bales-Pearson Auto Sales, 257 Ark. 764, 520 S.W. 2d 273, is misplaced because of the difference in the factual situations. There we held that an automobile sales contract was not rendered usurious by the mere fact that the automobile dealer received compensation from the insurance carrier for issuance of credit life insurance voluntarily taken by its purchaser, where there was no contention that the insurance charge was excessive. We carefully pointed out in Poole that there was no difference in purchasing the insurance from the dealer and in purchasing it from some other company in that there was no showing that the premium would have been less if purchased elsewhere. We emphasized that in such a situation no unlawful profit was involved.

In Ragge v. Bryan, 249 Ark. 164, 458 S.W. 2d 403, we held that a charge for credit life insurance did not render a loan contract usurious in the absence of evidence that the lender would profit from the escrow account into which the amount charged the borrower was credited or that the lender intended to apply the funds improperly to its own profit. We also emphasized the fact that the lender had met the burden of explaining “hidden items” in detail by showng that it paid the premiums on the insurance on the borrower and received no kickback or commission.

The affidavits of Sloan and Robinson are clearly sufficient to show the existence of a material issue of fact. They are not controverted and must be taken as true. Purser v. Corpus Christi State National Bank, 258 Ark. 54, 522 S.W. 2d 187. If, indeed, Robinson was not informed by Rebsamen Ford that he was eligible for and could elect a cheaper policy affording substantially the same benefits as that he took, the fact that the seller of the automobile also received a commission as an insurance agent on the policy taken but would not have received anything for obtaining the cheaper policy and the difference in cost was largely attributable to the commission to the seller would constitute substantial evidence from which the fact finder might find that the collateral transaction was a cloak for usury. We have recognized ever since our decision in Matthews v. Georgia State Savings Assn., 132 Ark. 219, 200 S.W. 130, 21 ALR 789, that an insurance agreement can be a cloak or device for the evasion of the usury laws. Our result in this case is influenced to some degree but not controlled by the public policy statements contained in Ark. Stat. Ann. § 66-3029 (Supp. 1973). Under that section, it is declared that it is the public policy of the state that life insurance agents and solicitors are charged with the responsibility of exercising discretion and good faith in a sales presentation or transaction.

Since we find that the facts would be sufficient basis for a jury to conclude that the insurance transaction in this case was a cloak for usury, and all reasonable inferences must be drawn against the moving party, a summary judgment was not proper because reasonable minds might differ as to the conclusions to be drawn from the facts disclosed. Harvey v. Shaver, 247 Ark. 92 444 S.W. 2d 256. In order to be entitled to summary judgment, it was incumbent upon appellee to show that there was no issue of fact. Deltic Farm & Timber Co. v. Manning, 239 Ark. 264, 389 S.W. 2d 435. Its explanation of the transaction by the affidavits filed is not sufficient to meet that burden. Summary judgment is an extreme remedy which should be granted only when it is clear that there is no issue of fact to be litigated. Purser v. Corpus Christi State National Bank, supra. Appellee seeks shelter under the precepts of Worthen Bank and Trust Co. v. Mosser, 245 Ark. 165, 432 S.W. 2d 8. But its supporting evidence has not brought it under that cover.

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