Chamber of Commerce of Hot Springs v. Barton, 4-4836.
| Decision Date | 20 December 1937 |
| Docket Number | No. 4-4836.,4-4836. |
| Citation | 112 S.W.2d 619 |
| Court | Arkansas Supreme Court |
| Parties | CHAMBER OF COMMERCE OF HOT SPRINGS v. BARTON et al. |
C. T. Cotham, of Hot Springs, and Paul D. P. Spearman, of Washington, D. C., for appellant.
Jeff Davis, of El Dorado, and Charles B. Thweatt, of Little Rock, for appellees.
This appeal presents a voluminous record with a fairly serious task imposed in its reduction to a reasonable extent and still present what we think are the controlling issues. The suit originated when some of the members of the Chamber of Commerce, at Hot Springs, filed a suit in the chancery court against T. H. Barton and the Chamber of Commerce asserting that the board of governors of the Chamber of Commerce had entered into a contract, for and on behalf of the Chamber of Commerce, with T. H. Barton for the sale of radio station KTHS, located at Hot Springs, Ark., and operated by the Chamber of Commerce. Later the Chamber of Commerce, after a meeting of its members, authorizing such action, filed a motion asking that it be made a party plaintiff in the suit and joined in the effort to cancel the contract of sale entered into by the board of governors, for and in behalf of the Chamber of Commerce, as the vendor, and T. H. Barton as the purchaser. The suit proceeded to a final decree wherein contract so entered into was upheld and the Chamber of Commerce was ordered to deliver over the property in accordance with and under the terms and conditions of the contract. From that decree the Chamber of Commerce alone has appealed. We cannot conceive that it will serve any useful purpose to set forth even a summary of evidence presented upon the trial. Let it suffice to say that we have examined and considered all the evidence, and we have considered that as to the facts the decree is supported by a preponderance of the evidence; or, at any rate, the decree may not be determined as contrary thereto. The main factual aspects of the case may be treated as concluded, and therefore become unimportant, except as the foundation of the issues is considered.
The proposition that has given us most concern is the challenge made first by some of the members of the Chamber of Commerce and now pursued by the appellant to the power of the board of governors to make sale and dispose of radio station KTHS, which is perhaps the most valuable, if not the sole, property owned by the corporation.
This contract of sale was made and entered into by the board of governors of the Chamber of Commerce without notice to the membership that the board of governors had in contemplation the prospective sale without a vote of the membership, specially authorizing such sale.
We think it hardly fair to say, as argued, that the board of governors attempted to sell or dispose of all the property of the corporation, to denude it of all physical assets, and then to assume, as a corollary conclusion, that the Chamber of Commerce, no longer having cause for its continued existence, should be dissolved. Preparatory to a discussion of the particular power of the board of governors to enter into this contract of sale, the purpose of the corporation may be stated by quoting from its constitution as follows:
"This Chamber is organized, not for pecuniary profits, but to unite the property owners, hotel and bath house interests, merchants, professional men, and citizens generally for the following purposes: To promote the interests of the City of Hot Springs in every avenue of trade and commerce; to oppose discrimination against such interest by any corporation, organization or association; to guard against and oppose National, State, or Municipal legislation inimical to the City and its institutions; to cooperate with the railway companies; to secure and maintain favorable freight and passenger rates and the best possible train service from all directions; to entertain distinguished and other visitors, associations, commercial bodies, etc., and to direct their attention to points of interest; to encourage the holding of conventions and similar gatherings in this City; to stimulate and answer inquiries either from those in quest of health or pleasure or from corporations or individuals contemplating a change of location; to foster manufacturing and commercial enterprises of every character; to encourage by all legitimate means, the development of the wonderful natural and agricultural resources of the vicinity and to keep the marvelous qualities of our health restoring hot waters, the unrivaled perfection of our climate, and the superlative advantages of our surroundings as the World's Greatest Health and Pleasure Resort, constantly before the public of this and other countries, thereby securing the greatest possible good for the greatest number of people."
As organized for the purposes above, the corporation operated for many years. Finally the Arlington Hotel at Hot Springs, which had built the original broadcasting station, operating as KTHS, proposed to donate the broadcasting station to the Chamber of Commerce, which it might use as part of its system or scheme for advertising Hot Springs as a popular resort. There is some dispute about the terms under which the broadcasting station passed to the Chamber of Commerce, but we think it may be determined from the evidence and circumstances in proof that the Chamber of Commerce took over this new enterprise under an agreement, not in writing, that it should operate the plant for a period of at least three years, after which the sale might be made thereof and, in the event of sale $25,000 of the purchase price, should then be paid to the Arlington Hotel to reimburse it for its original investment. It is urged that evidence to this effect is not proper, because it is not embraced or included in the minutes of the Chamber of Commerce. We do not think that this omission from the minutes is conclusive of the facts, for the reason that the Chamber of Commerce has no more right or power than an individual would have to insist its own self-serving report is true and so prevent a production of other evidence not in writing.
Many years have elapsed since that time, and conditions have within recent years been such that profits have been somewhat curtailed, and those in charge and having the responsibility for the operation of the broadcasting station no doubt have become somewhat concerned as to the propriety of the future maintenance and operation of the station. This conclusion is not stated as adding anything to the power of this board of governors to make the sale, but as indicating that there are reasons, no doubt sufficient in themselves to the board of governors impelling or warranting the action taken. We have no doubt the deal was one to dispose of what had become to them the proverbial "white elephant."
It is conceded by the appellant that this action of the board of governors was without fraud. In truth there is no evidence of fraud. There is evidence, however, that their proceedings in entering into the contract and the amendments thereto were enacted under a certain degree of secrecy, but we think the explanations offered for whatever concealment there was of their proceedings are reasonable, and more particularly so in view of the frank concession that no fraud motivated the conduct of the parties.
Evidence is offered that the Chamber of Commerce has collected large sums of money, perhaps more than $400,000, as dues from its members, and among those who made these contributions was the Arlington Hotel, which was paying $4,000 a year at the time it delivered this station to the Chamber of Commerce. It agreed to double or increase its payment to $8,000 a year for the next three years after the Chamber of Commerce accepted the radio station, during which time there was to be no sale. These statements bear no earmarks of fabrication, but appear as a relation of connected current events of the period considered.
We think it may be fairly urged that the purposes of the organization were set forth in its constitution; that it accepted the dues and contributions of its members for said purposes, it was not organized or supported exclusively for the maintenance of a radio station, but that such radio station, while operated, was merely one of the incidents or instrumentalities employed by it for the dissemination of its advertising...
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