M. L. Sigmon Forest Products, Inc. v. Scroggins

• Decision Date: 12 April 1971
• Docket Number: No. 5--5527,5--5527
• Citation: 465 S.W.2d 673,250 Ark. 385
• Parties: M. L. SIGMON FOREST PRODUCTS, INC., Appellant, v. Harold E. SCROGGINS, Sr., Appellee.
• Court: Arkansas Supreme Court

Page 673

465 S.W.2d 673

250 Ark. 385

M. L. SIGMON FOREST PRODUCTS, INC., Appellant, v. Harold E. SCROGGINS, Sr., Appellee.

No. 5--5527.

Supreme Court of Arkansas.

April 12, 1971.

Rehearing Denied May 10, 1971.

Catlett & Henderson, Little Rock, for appellant.

Clifton Bond, Monticello, for appellee.

HARRIS, Chief Justice.

This is the second appeal of this case. In M. L. Sigmon Forest Products, Inc. v. Harold E. Scroggins, Sr., 247 Ark. ---, 446 S.W.2d 198 (Mov. 3, 1969), this court reversed the decree of the Drew County Chancery Court and remanded this cause for further proof on two points, first, a determination of how long the appellant had been, and would be, kept from possession of the premises sought in the action and secondly to permit appellee to offer competent evidence of his reasons for withholding possession of the lands in controversy from appellant. The parties had entered into a lease agreement on January 18, 1967, which inter alia, provided:

'Lessor hereby leases and lets to Lessee for a term of two (2) years commencing on the 18th day of January, 1967, the following described lands lying and situated in Drew County, Arkansas, to wit: (description of lands follows).'

On December 13, 1968, appellant notified Scroggins that it would expect to take full possession of the farm on the expiration date. Whereupon Scroggins filed suit in the Chancery Court of Drew County alleging that he was a tenant for years under the lease agreement and was entitled to six months' written notice of termination, with such notice to end with the rental period of 1971. He further asserted that he had done substantial work in preparing the lands for the 1969 crop year, and that he had more than six months prior to the termination date in the lease, attempted to ascertain from appellant whether the lease would be continued or terminated, but without success. It was asserted that the annual rental value of the farm was $30,000 and that appellant should be enjoined from taking possession or from interfering with appellee's possession. Sigmon agreed that the rental value for one year's rental was $30,000. The chancellor decided the issues on the basis of a motion for summary judgment, responses, affidavits, and exhibits to the affidavits; but we reversed, remanded the case stating:

'There is, however, one fact definitely left for determination. Section 50--509 provides that one who willfully holds over, thus preventing possession to the person entitled thereto, shall pay the person so kept out of possession double the yearly rent of the lands detained for all the time he shall keep the person entitled thereto out of possession. This record does not reflect for how long the appellant has been, or will be, kept from possession, and this fact will have to be determined at another hearing. Also, while there is nothing in the record before us which reflects that appellee acted in good faith in not surrendering the premises, inasmuch as the case is being remanded anyway, we think it proper to permit Scroggins to offer competent evidence of his reasons for withholding possession. In Lesser-Goldman Cotton Company v. Fletcher, 153 Ark. 17, 239 S.W. 742, this court pointed out that, under the statute:

'* * * to entitle the landlord or lessor to double rents after the termination of the lease term, the holding over by the tenant must be done wilfully. The statute is highly penal, must be strictly construed, and cannot be extended by intendment beyond its express terms. A holding over by the tenant under the bona fide belief that he has the right to do so, even though he were mistaken, is not a wiful or contumacious holding under the statute, where the undisputed facts show, as they do here, that there were reasonable grounds for such belief."

On remand, the court conducted a hearing as a matter of determining these two matters, and at the conclusion of the hearing, made the following findings:

'1. Scroggins retained possession of the land in issue to November 17, 1969.

2. The 'yearly rent' of the land in issue for 1969 is $30,000.00.

3. Scroggins 'acted in good faith (under the facts and circumstances in this action)' in not surrendering the possession of the land in issue to Sigmon and is not subject to the penalty of double rents as authorized by Section 50--509 supra.

4. Sigmon should have a judgment against Scroggins for $30,000.00, less $26,249.44 previously paid, or a sum of $3,750.56, with interest and all costs of this action for which execution or garnishment may issue.

The rice and bean crop was stored and sold to certain graineries and certain amounts are paid by said graineries to Sigmon and Scroggins at intervals. This to state the full purchase price of the crops had not been paid by the graineries to Sigmon and Scroggins on the date this action was heard. Sigmon should file or cause to be filed with the Clerk of this Court a statement of further advances made by the graineries to it since this trial of this action, and if such advances have been received by Sigmon the same should be credited to the judgment granted in Part 4 hereof.'

From the judgment so entered, appellant brings this appeal, contending that the court erred in holding that Scroggins acted in good faith in not surrendering the lands leased and was therefore not subject to double rental under the provisions under Ark.Stat.Ann. § 50--509 (1947). Appellee cross-appeals, contending that the trial court erred in not granting Scroggins judgment against appellant for one-half of the cost of seed, fertilizer, and herbicides used in the growing of the 1969 rice crop and one-fourth of the cost of fertilizer and herbicides used in growing the 1969 soy-bean crop in the sum of $7,227.01. We first discuss the direct appeal.

In Lesser-Goldman Cotton Company v. Fletcher supra, we held, as pointed out on the first appeal of this case, that the landlord or lessor is only entitled to double rents when the holding over by the tenant is wilfully done, and in the case before us, the trial court found that the holding over was not 'wilful'. In giving his reasons, the chancellor said that the relationship between the parties appeared to have been satisfactory for more than 25 years, ¹ and 'because of this long tenure, development and improvement of the farm by Scroggins there had been created a feeling of possession and maybe some degree of proprietary claim by Scroggins in the land'; further, that Sigmon had knowledge of the work being done by Scroggins in preparing the land for the crop year but did not warn appellee that the lands would not be rented to him in 1969. Further from the chancellor's opinion:

'Scroggins testified that it would have been inconvenient for him to remove from the lands, that he would have suffered the loss of the preparatory work done on the land for the 1969 crop (neither of which are legal causes to withhold possession of the land), that he knew the lease in issue had a termination date but that he was entitled to remain in possession until he had received a six months notice of the termination of the lease or to quit possession.'

Saying that he really thought he had the legal right to retain possession of the premises unless he had received a six months' notice to vacate does not establish the bona fide belief referred to by the law. Such bona fide belief might well arise where several heirs were contending to be owners of land--or where there was a will contest to determine whether one party had been legally devised some realty--or where there was a boundary line dispute. But, of course, there are no circumstances of this nature presented in the instant litigation.

We do not agree that the reasons enumerated justified Scroggins in holding over, and we have reached the conclusion that the holding over by appellee, under the law, was entirely 'wilful'. Scroggins testified that he talked with Glenn Cooper, president of appellant company, in June or July of 1968, with reference to whether he would be allowed to farm the lands past January 17, 1969. While it is asserted in appellee's brief that Scroggins was told by Cooper 'that he thought it would be all right for Scroggins to farm the lands for another year', the record lacks quite a bit of supporting this interpretation. The first time that Scroggins was interrogated, and by his own attorney, relative to what was discussed in regard to the leased lands, Scroggins replied: 'Not much of anything, I just asked him if he was going to let me farm on and he said that he would let me know. That was all that was ever said (emphasis supplied)'. When he was next asked by his attorney what he had been told, appellee stated: 'He said that he would let me know--at that time he said that it was all right.' This was the first mention of any inference that it 'would be all right'. Following this answer, the court asked 'What was that? Did he say that, or, did he think that?' Appellee's attorney then asked 'What did Mr. Cooper say?' Scroggins replied as at the outset 'He didn't say anything, really. He said that he would let me know.' Subsequently, appellee stated that he assumed that he would have the lands for another year 'when he told me that everything was O.K.'. It somewhat appears that the alleged statement by Cooper 'at that time he said it was alright' was an afterthought.

It is also argued that Scroggins began preparing the lands for another crop year in October of 1968 and that Sigmon had knowledge of this fact but did not warn Scroggins not to incur the expense necessary in such preparation. It is likely that Sigmon did know of the preparation, but there is no proof that this was true. Though Cooper testified in the case, he was never questioned along this line and the testimony of Scroggins certainly did not establish this knowledge on the part of appellant. When asked if Sigmon Farms knew if he was preparing the lands for the next crop year, Scroggins said 'I assume that they did...