E. E. Terry, Inc. v. Cities of Helena and West Helena

Citation256 Ark. 226,506 S.W.2d 573
Decision Date18 March 1974
Docket NumberNo. 73-239,73-239
PartiesE. E. TERRY, INC., Appellant, v. CITIES OF HELENA AND WEST HELENA, Arkansas, Acting Through Helena-West Helena Airport Commission, Appellee.
CourtSupreme Court of Arkansas

W. G. Dinning, Jr., Helena, for appellant.

David Solomon, Helena, for appellees.

JONES, Justice.

The Cities of Helena and West Helena, acting through their Airport Commission, leased their airport land and facilities to E. E. Terry, Inc., hereafter referred to as 'Terry.' The cities sued Terry for back rent and Terry counterclaimed for damages. A jury was waived and the trial judge sitting as a jury rendered judgment in favor of the cities for $3,522.48 in back rent and dismissed Terry's counterclaim. Terry has appealed to this court under assignments of error as follows:

'The lower court erred in overruling appellant's motion to dismiss the complaint on the grounds that the new Helena-West Helena Airport Commission had no legal entity or authority to maintain the action under the lease.

The court as a trier of fact disregarded the undisputed testimony and dismissed appellant's cross-complaint.

(A) Appellee had no right to reenter and take possession of leased property to the damage of the appellant.

(B) The appellee had no right to withhold the making of repairs customarily made by the appellee's predecessor in office over a period of more than 20 years.'

The background for this litigation began in 1940 when the Cities of Helena and West Helena, by municipal ordinances jointly created the Helena-West Helena Airport Commission with authority to acquire, develop, maintain and operate a public airport for the two cities. The ordinances provided that the Commission should consist of six members, including the mayor and two citizens of each of the municipalities. The commissioners under authority of these ordinances acquired a section of land and established airport facilities thereon. It appears that soon after the establishment of the airport, it was used by the federal government as a training facility for pilots during World War II and in connection with such use, several frame and metal buildings, including a mess hall, recreation building, and barracks buildings were erected in addition to the hangars for airplanes. It appears that after the war the government returned the property to the two cities and the facilities were used for a time as a training school under the authority and management of the Airport Commission as originally composed.

For a number of years prior to 1966 the entire section of land, including the airport with its building and facilities, was leased to Terry who operated the airport, used and sublet the buildings as well as the farmland outside the airport area. The final lease to Terry, and the only one involved in this case, was dated May 26, 1966, and was for a future two year term beginning on January 1, 1968, and ending on December 31, 1971. Under the terms of this lease Terry agreed to pay $15,000 per year in quarterly installments of $3,750 to be paid in advance on the first days of January, April, July and October of each year. As to the property included in the lease, it was described as follows:

'A) All buildings, barracks, hangars and storage facilities used in the operation of the Thompson-Robbins Field situated in Section 27, Township 1 South, Range 4 East, Phillips County, Arkansas, as per description and list attached hereto and designated as Schedule 'A.'

B) Agricultural lands not presently used for airport facilities and being described as all of the remaining lands situated in said Section 27, Township 1 South, Range 4 East, Phillips County, Arkansas.'

Schedule A, above referred to, specifically described several buildings as to size and use including a 'Mess and Recreation Building 97 133 ' used as a 'Woodwork Shop.'

The lease contained 13 separately numbered paragraphs, but the only ones pertinent to the case before us are paragraphs 9 and 11, which read as follows:

'9) It is mutually agreed that Lessee shall have the right to make original structural changes in the buildings located on the leased premises, so long as the same shall be beneficial to the structures, and shall not decrease the value thereof.

11) It is mutually agreed that should the improvements on said property or any of them be rendered unfit for occupancy for the purposes for which they are hereby let, by fire, windstorm, or other unavoidable casualty, the rental hereinabove stipulated to be paid by the Lessee, or such proportion thereof as may be in the circumstances just, shall be by said Lessor remitted and abated until such time as the same shall have been repaired and again put in condition for such occupancy by the Lessor.'

Under a supplement to the lease Terry was appointed 'manager' and was charged with the responsibility of managing the airport facilities in regard to its operation for the members of the public who would have occasion to use the airport. The lease was completely silent as to repairs and maintenance of the buildings and improvements except as above set out.

On March 7, 1968, the two cities passed new ordinances reorganizing their airport commission under the authority of the 'Airport Commission Act,' Act 53 of 1949 Ark.Stat.Ann. § 74-501 et seq. (Repl.1957). The 1968 ordinances provided a five member commission and eliminated the mayors of the two cities from membership on the commission, as required under the Act, § 74-503. The new Commission took over the active management and operation of the airport facilities upon passage of the new ordinances and was so acting when the present litigation was instituted. No separate ordinances were passed by the two cities abolishing the Commission as constituted under the 1940 ordinances, but the 1968 ordinances repealed all ordinances in conflict with them.

Beginning with the installment due on January 1, 1968, Terry reduced the quarterly payments to $3,500 and upon termination of the lease, the cities, through the Airport Commission, filed suit for the remainder of the agreed rent in the amount of $3,000, together with interest and costs. On October 19, 1971, Terry filed answer admitting the execution of the lease agreement but denying that the court had jurisdiction because the Airport Commission lacked capacity to sue. As a counterclaim, Terry alleged that in October, 1968, the Commission entered on the leased premises and removed the mess and recreation building used as a woodwork shop; that from, and after, January 1, 1969, the Commission refused to make ordinary repairs to the buildings on the leased premises and because of such lack of repairs, the buildings deteriorated and became worthless, all to Terry's damage in the amount of $7,200 for which Terry prayed judgment. Answer was filed to Terry's counterclaim on November 3, 1971, and on May 3, 1972, Terry filed what was designated 'Motion to Dismiss' alleging that the lease dated May 26, 1966, was one of a series of leases over a period of about 25 years; that the 1966 lease was entered into by the Commission created under the 1940 ordinances; that the 1940 ordinances were not repealed prior to the passage of the 1968 ordinances, and that the Commissioners selected under the 1968 ordinances had no legal authority to maintain suit in connection with the lease described in the complaint. The trial court overruled Terry's motion to dismiss and following trial on the merits, rendered judgment against Terry for past due rent, together with interest as already stated, and dismissed Terry's counterclaim.

We now consider Terry's assignments of error in the order they are designated. The objection that plaintiff did not have legal capacity to sue must be made in the manner provided in the statute. Gaither Coal Co. v. LeClerch, 182 Ark. 466, 31 S.W.2d 750. Ark.Stat.Ann. § 27-1115 (Repl.1962) provides that where it appears on the face of the complaint that a plaintiff has no legal capacity to sue, the defendant may demur to the complaint; but, where incapacity to sue does not appear on the face of the complaint, the objection may be taken by answer (§ 27-1119). Terry first raised the objection in the answer to the complaint and if the later motion to dismiss was to be treated as a demurrer, it was filed long after the answer and counterclaim was filed. We find no merit to Terry's first assignment. Terry seems to recognize that this was a suit by the city through its agency, the Airport Commission. See I. C. Eddy, Inc. v. City of Arkadelphia, 8 Cir., 303 F.2d 473. The new Commission was at least a de facto commission insofar as Terry was concerned and Terry was in no position to question its existence or authority to sue as an agency of the cities under the ordinances creating it. In Pennington v. Oliver, 245 Ark. 251, 431 S.W.2d 843, we cited the earlier case of Faucette, Mayor v. Gerlach, 132 Ark. 58, 200 S.W. 279, where this court said:

"A person who enters into an office and undertakes the performance of the duties thereof by virtue of an election or appointment, is an officer de facto, though he was ineligible at the time he was elected or appointed, or has subsequently become disabled to hold the office. Indeed, it is settled by a current of authority almost unbroken for over 500 years in England and this country, that ineligibility to hold an office does not prevent the ineligible incumbent, if in possession under color of right and authority, from being an officer de facto with respect to his official acts, in so far as third persons are concerned."

The trial court did not err in overruling Terry's motion to dismiss the complaint.

As to Terry's second point, Mr. Loyall Barr testified that he had been serving as a member of the Airport Commission since his appointment in April, 1968. After testifying as to the amount of arrears in rent owed by Terry in the amount of $3,000, he said that when he assumed his duties as...

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8 cases
  • Propst v. McNeill
    • United States
    • Arkansas Supreme Court
    • November 18, 1996
    ...Ark. 603, 798 S.W.2d 428 (1990); see also Majewski v. Cantrell, 293 Ark. 360, 737 S.W.2d 649 (1987); E. E. Terry, Inc. v. Cities of Helena & W. Helena, 256 Ark. 226, 506 S.W.2d 573 (1974); Hurst v. Feild, 281 Ark. 106, 661 S.W.2d 393 (1983). Consistent with this doctrine, the trial court he......
  • Thomas v. Stewart
    • United States
    • Arkansas Supreme Court
    • November 29, 2001
    ...to repair the leased premises, he cannot, in the absence of statute, be held liable for repairs. E.E. Terry,Inc. v. Cities of Helena & W. Helena, 256 Ark. 226, 506 S.W.2d 573 (1974); Collison v. Curtner, 141 Ark. 122, 216 S.W. 1059 In the instant case, the lease agreements made between the ......
  • Holland v. Cooper, CV–17–657
    • United States
    • Arkansas Court of Appeals
    • January 24, 2018
    ...to repair the leased premises, he cannot, in the absence of statute, be held liable for repairs. See E.E. Terry, Inc. v. Cities of Helena and W. Helena , 256 Ark. 226, 506 S.W.2d 573 (1974). First, the Coopers owed no duty to Holland under any contract theory. Holland never raised an issue ......
  • City of Hot Springs Advertising and Promotion Com'n v. Cole, 93-1390
    • United States
    • Arkansas Supreme Court
    • June 6, 1994
    ...that the complaint was actually a suit brought by the city through its agency, the airport commission. Terry v. Cities of Helena and West Helena, 256 Ark. 226, 506 S.W.2d 573 (1974). Here, the City of Hot Springs is not a named party. In short, we conclude that the statutory premise upon wh......
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