Country Gentleman, Inc. v. Harkey

• Decision Date: 05 June 1978
• Docket Number: No. 77-419,No. 1,77-419,1
• Citation: 263 Ark. 580,569 S.W.2d 649
• Parties: COUNTRY GENTLEMAN, INC., Appellant, v. Grettle HARKEY, Appellee
• Court: Arkansas Supreme Court

Page 649

569 S.W.2d 649

263 Ark. 580

COUNTRY GENTLEMAN, INC., Appellant, v. Grettle HARKEY, Appellee.

No. 77-419.

Supreme Court of Arkansas, Division No. 1.

June 5, 1978.

Rehearing Denied Sept. 25, 1978.

Little, Lawrence, McCollum & Mixon by James G. Mixon, Bentonville, for appellant.

Oliver L. Adams, Jr., Rogers, for appellee.

GEORGE ROSE SMITH, Justice.

The appellant, as the lessee in a 10-year lease upon a restaurant in the city of Rogers, brought this suit for rescission of the lease on the ground that the mere existence of an outstanding mortgage on the leased realty constituted a breach of contract by the lessor. The complaint also sought to recover four items of damages, totaling $58,258.78. In answer to the complaint the lessor also sought a rescission of the lease and damages of $20,000. The chancellor found that the plaintiff was not entitled to rescission, because it knew or should have known of the outstanding mortgage when it entered into the contract. The decree, however, set aside the lease, apparently because both parties sought that relief, and awarded the plaintiff $9,885.88 as damages for breach of contract and $1,900 as excess rent paid into the registry of the court.

For reversal the appellant argues that the decree should be reversed and the cause remanded for the entry of a $54,417.13 judgment in its favor. We emphasize that this is an "all or nothing" argument. That is, the appellant does not even intimate, much less argue, that the damages awarded by the chancellor should be increased to some intermediate figure between the $9,885.88 allowed and the $54,417.13 requested.

The appellee argues that the decree should be affirmed, because the existence of the outstanding mortgage did not amount to a breach of contract. Alternatively, the appellee asks that the decree be reversed, because the appellant is not entitled to any damages whatever. There is, however, no cross appeal and consequently no basis for affirmative relief in favor of the appellee.

Ordinarily we would first address the question whether the decree should be affirmed on the ground that the appellant is not in any event entitled to damages. Such a discussion, however, would in one respect be futile, because even if we sustained the appellant's argument that the chancellor was right in awarding it Some damages, we could not possibly sustain the appellant's all or nothing argument that it is absolutely entitled to a money judgment for $54,417.13. We must first explain why this is so.

The appellant arrives at the recited figure by totaling the following elements of asserted damage:

                Price paid for restaurant equipment     $ 35,000.00
                Rent paid in advance                       2,000.00
                Cost of new equipment, less salvage        6,592.82
                Net loss on placemats and guest checks       938.43
                Expenditures allowed by decree             9,885.88
                                                        -----------
                                                        $ 54,417.13
                

The various items, however, are not undisputed. For instance, the appellant conceded that the appellee is entitled to a credit of $2,173.80 upon the first item, but that credit is not included in the tabulation. Furthermore, the appellee denied that the appellant is entitled to recover the entire $35,000 paid for restaurant equipment purchased from her, because she said that all but about $3,000 worth of the equipment had been removed before the restaurant was abandoned by the appellant. We need not discuss the other items. Suffice it to say that the total amount of damages is in sharp dispute and depends to some extent upon the credibility of interested witnesses.

The key question is whether this court, in trying a chancery case de novo, is required to study the appellant's abstract of the record and to make, if justified, modifications in the decree upon grounds Not argued by the appellant. Certainly no such duty rests upon this court in appeals at law. That is, if the defendant in a personal injury case argues solely that he was entitled to a directed verdict, we do not explore the abstract to be sure that each item of damages awarded by the jury is supported by substantial evidence.

As a practical matter, the same principle must necessarily apply to our de novo review in chancery appeals. Otherwise this situation might occur: The appellant, in a complicated accounting case involving hundreds or thousands of pages of testimony, could simply say in his brief: "The amount awarded to the appellant is inadequate (or the amount awarded to the appellee is excessive). The court is requested to review the record as abstracted and to enter whatever judgment, favorable to the appellant, is appropriate." Needless to say, such a brief would obviously be contrary to our settled rule that issues not argued by the appellant are waived. See Fancher v. Baker, 240 Ark. 288, 399 S.W.2d 280, 16 A.L.R.3d 1383 (1966), where, in holding that a point for reversal had been waived, we made an observation equally applicable to the case at bar: "Not one line of the brief is devoted to that point."

The precise question was decided, not in so many words but by implication, in our opinion on rehearing in Cummings v. Boyles, 242 Ark. 923, 415 S.W.2d 571 (1967). There in our original opinion, 242 Ark. 38, 411 S.W.2d 665, we had modified the chancellor's decree by awarding the appellant more relief than he had obtained in the trial court. On [263 Ark. 582-A] rehearing, however, we set aside that modification, because the appellant had not argued that theory as a basis for reversal. Justice Jones, in dissenting to the opinion on rehearing, made this significant statement of his views:

It is my position that when this court tries a case de novo on appeal from a Chancery Court, it should do so on the record and not on the briefs.

The majority rejected that view in the Cummings case, and we are still of the opinion that our position was right.

Affirmed.

We agree. HARRIS, C. J., and FOGLEMAN and HOLT, JJ.

BYRD, Justice, concurring.

I agree that the decision of the trial court should be affirmed but because I do not agree with the method used to affirm the trial court, I am taking the time to set forth the reasons why the trial court should be affirmed on the merits.

The record shows that the parties entered into a 10 year lease on September 1, 1974 for a going restaurant. The lease contains 30 separate numbered provisions. The provisions upon which appellant relied to rescind the contract for breach of a covenant are as follows:

"7. TITLE CERTIFICATES. A. Lessor agrees that she will furnish to the Lessee a certificate of title or a certificate of title insurance certified to by a bonded abstractor or a certified title insurance company showing that she has clear title to the real estate and appurtenances herein leased free and clear of all encumbrances and has a good right to lease said real estate and appurtenances and hereby warrants quiet and peaceful possession during the period of this lease and any extension thereof, by the Lessee upon the performance of the provisions of this lease which are to be performed by the Lessee.

[263 Ark. 582-B] 13. OPTION TO PURCHASE. Not in lieu of but in addition and supplemental to the rights set forth in Paragraph 12, the Lessee shall have, and is herewith given, the following right and option to purchase all of Lessor's right, title and interest in and to the leased premises:

Lessee may purchase the demised premises at the end of the primary term of this lease for a purchase...