Petition — Boone v. J & M McKee

“PILED

JUL 14 1978

MICHAEL RODAK, JR., CLERK

|

IN THE

Supreme Court of the United States

OcTOBER TERM, 1978

No 78-85

Davin B. Boonze, Ova McCoy, JR.

and McCoy Fars, INc., Petitioners

VS.

J & M McKeEsg, a partnership

composed of JoHN B. McKeEs, JR., and

MarGARET McKEkE, Respondents

PETITION FOR A WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE STATE OF ARKANSAS

T. H. Freevanp, IIl

P.O. Box 269

Oxford, MS 38655

Isaac A. Scort, JR.

2200 Worthen Bank Building

Little Rock, AR 72201

Counsel for Petitioners

Of Counsel:

GEORGE C. COCHRAN

Law School

University of Mississippi

University, MS 38677

AERA STE AE PET ATI ILE IIE ETI ETE EES TERRE ECE

Press or Brron S. ApAMs PRINTING, INC., WASHINGTON, D. C.

Page

ck in idan en nacenahednwhel’ Kee hee 1

PEE, beckoned cetnehesedednincscnen’ : Jin eapiee’s 2

Si wis wa nds nee oe etd ala 2

ConsTITUTIONAL Provision INVOLVED ............+45: 2

IN GP SIN GI sands cceccvieniccccinscesevetes 2

Reasons FoR GRANTING THE WRIT .............0005: 4

1. The case represents a federal question of sub-

stance not heretofore determined by this court 4

2. The decision of the Arkansas Supreme Court

conflicts with the decisions of this court in crim-

RED a3:.0p.acaaitincebanatcis cas eed awess 7

3. The decision below conflicts with decisions of

other state and federal courts ............... 9

EE PORE RIES CE ELA PN ATE 11

Appenpix (Opinion of the Arkansas Supreme Court) .. la

CITATIONS

CasEs:

Boone v. McKee, 263 Ark. 20, 563 S.W.2d 409 (1978) 1, 3n,

7 °9

Chandler v. Fretag, 348 U.S. 3 (1954) ............... 5,7

Chapman v. California, 386 U.S. 18 (1967) .......... 7, 8n

Foster v. Walus, 81 Idaho 452, 347 P.2d 120 (1959) .... 9n

Gilbert v. California, 388 U.S. 263 (1967) ............ 8n

Glasser v. U.S., 315 U.S. 60 (1941) ....... cece ee cees 8

Goldberg v. Kelly, 397 U.S. 254 (1970) .............. 6,7

Grayson v. Bowie, 197 Ark. 128, 122 S.W.2d 536 (1939) 10n

ii Citations Continued

Page

Holloway v. Arkansas, 98 S.Ct. 1173 (1973) ...... 2n, 5, 7,8

House v. Mayo, 324 U.S. 42 (1944) .......... eee eeee 8

Leach v. Smith, 130 Ark. 465, 197 S.W. 1160 (1917) .. 10n

Mendoza v. Small Claims Court, 49 Cal.2d 668, 321 P.2d

ce nachds ocukgka We ake bebas hae Rh 10

North v. Russell, 427 U.S. 318 (1976) ............45. 10n

Pekin Cooperage Co. v. Doughten, 117 Ark. 410, 174

EE ou dabclucaSbaceawianbuees 9n

Powell v. Alabama, 287 U.S. 45 (1932) ........ 4, 5, 5, 7,9

Reynolds v. Cochran, 365 U.S. 525 (1961) ............ 5n

Roberts v Anderson, 66 F.2d 874 (10 Cir. 1933) ...... 9

Simon v. Liberman, 193 Neb. 321, 226 N.W.2d 781

Phi testa e lh wah peered eaneaae ens s

Steen v. Board of Civil Service Commissioners, 160

ee ey OP CLE FEO CEDURE) occcceccccccccccas 9

Wolff v. McDonnell, 418 U.S. 539 (1974) ........00. 6n

ee

IN THE

Supreme Court of the United States

OctToBEeR TERM, 1978

No.

Davip B. Boong, Ova McCoy, Jr.

and McCoy Farms, Inc., Petitioners

vs.

J & M McKez, a partnership

composed of JoHn B. McKee, Jr., and

MarcareT McKeEr, Respondents

PETITION FOR A WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE STATE OF ARKANSAS

The petitioners David B. Boone, Oval McCoy, Jr.

and McCoy Farms, Inc. respectfully pray that a writ

of certiorari issue to review the judgment of the Ar-

kansas Supreme Court entered in this proceeding on

April 17, 1978.

OPINION BELOW

The opinion of the Arkansas Supreme Court is re-

ported 263 Ark. 20, 563 8.W.2d 409 (1978) and ap-

pears in Appendix A.

2

JURISDICTION

The opinion of the Arkansas Supreme Court was

entered on March 6, 1978. A timely petition for re-

hearing was denied on April 17, 1978.’ This petition

for certiorari was filed within 90 days of that date.

This Court’s jurisdiction is invoked under 28 U.S.C.

§ 1257 (3).

QUESTION PRESENTED

Under the circumstances of this case is the denial

of the right to retained counsel in a civil case violative

of the due process clause of the Fourteenth Amend-

ment?

CONSTITUTIONAL PROVISION INVOLVED

The Fourteenth Amendment, provides: ‘‘nor shall

any State deprive any person of life, liberty, or prop- —

erty, without due process of law.’’

STATEMENT OF THE CASE

Petitioners were defendants in a civil suit tried in

the Chancery Court of Ouachita County, Arkansas.

In this proceeding they were denied the right to have

their case tried with the retained services of a mem-

ber of the Arkansas Bar. How this occurred may be

briefly summarized.

McCoy Farms, Inc., gave respondents a deed of trust

on lands in Ouachita County, Arkansas as security

‘In light of this Court’s decision in Holloway v. Arkansas, 98

S. Ct. 1173 (1978), a second petition for rehearing was filed and

denied on May 8, 1978. Inasmuch as the latter petition was not

authorized by the rules of the Arkansas Supreme Court (although

acted upon) the April 17 entry is being treated as the ‘‘final de-

eree’’ for purposes of 28 U.S.C, § 2101 (ce).

_

3

for a promissory note also executed by petitioners

Boone and McOoy.’ After default, foreclosure proceed-

ings were instituted in the chancery court. Prior to

trial, petitioners were represented by Arkansas coun-

sel as well as a member of the Mississippi bar not ad-

mitted to practice in Arkansas. The defense was usury.’

At the beginning of the trial and without advance

notice, counsel for respondents asked the court to ex-

clude, as a potential witness, petitioners’ Arkansas

counsel, Upon the granting of the motion,‘ petitioners’

Mississippi counsel immediately moved for a continu-

ance so that another Arkansas attorney could be ob-

tained, That motion was overruled and the trial pro-

ceeded with the entire defense presented by Mississippi

counsel.’ The trial court decreed a sale of the property

and awarded respondents a deficiency judgment for

$205,069 after respondents bought the property at the

sale.

* 2,964 acres of farm land was purchased from respondents for

$889,200 of which $60,000 was paid in cash, $290,000 was for as-

sumption of a first mortgage, and $539,200 was secured by the

mortgage in litigation, Petitioners also expended $135,000 on im-

provements while temporarily in possession of the land, Appendix

A at 6a.

* Based upon the backdating of the note from August 30, 1976

to Iebruary 1, 1976 and the fact that petitioners were not given

possession of the land until August 30, 1976, Appendix A at la.

*On appeal, the Arkansas Supreme Court held that the decision

to exclude was erroneous, i.e., ‘‘[T]he rule against the attorney

who becomes a witness continuing as an advocate was not designed

to permit a lawyer to call opposing counsel as a witness and thereby

disqualify him.’’ Appendix A at 3a.

‘Further objection to the proceeding was made at the close of

trial. As before, the motion was overruled. Record 109.

4

On appeal, petitioners restated their contention that

denial of counsel of one’s own choice is a per se vio-

lation of the due process clause which must result in

an automatic reversal. Petitioners also pointed to

certain segments of the trial indicative of the extreme

disadvantage suffered by out-of-state counsel. For ex-

ample, counsel was forced to ask directions as to how

to proceed with offers of proof, R. 98, which in turn

elicited suggestions from opposing counsel. Jd. At ano-

ther point, petitioner’s counsel was forced to inquire as

to the Arkansas rule with respect to judicial notice.

R. 108. Sitting en bane, and by a four to three vote,

the court affirmed the chancery court holding, that al-

though the denial of petitioners’ right to counsel was

error of constitutional proportions, no prejudice was

shown and, therefore, the harmless error rule applied.

Appendix A at 4a,

REASONS FOR GRANTING THE WRIT

1. The Case Presents A Federal Question of Substance Not Here-

tofore Determined By This Court.

This Court has never decided the issue of the scope

of due process as applied to the right to counsel in civil

proceedings. In Powell v. Alabama, 287 U.S. 45 (1932),

it did, however, establish the now-basic proposition

that:

If in any case, civil or criminal, a state or federal

court were arbitrarily to refuse to hear a part

by counsel, employed by or a tha or sy it

reasonably may not be 6 Be Po that such a refusal

would be a denial of a hearing, and, therefore, of

due — in the constitutional sense. [Zd. at

69. (Kimphasis added.) ]

- Powell dealt with the issue of requiring local counsel

in the context of existing representation in a criminal

_

5

proceeding by an out-of-state attorney.’ In Chandler

v. Fretag, 348 U.S. 3 (1945), the principle was ex-

panded to require reversal, on due process grounds,

of a criminal conviction in which a continuance to

allow a criminal defendant time to employ counsel of

his own choice was refused. As in Powell, the unquali-

fied right was deemed to exist in both ‘‘civil and crimi-

nal proceedings.’’ Jd. at 10.’

This past Term, the Court reaffirmed the corolary

constitutional principle which comes into play when

the right to the assistance of counsel (appointed or

retained) is denied. Specifically :

Moreover, this Court has concluded that the as-

sistance 7 counsel is among those ‘‘constitutional

rights so basic to a fair trial that their infraction

can never be treated as harmless error.’’ . .

Accordingly when a defendant is deprived of the

presence or assistance of his attorney, either

throughout the prosecution or during a critical

stage ... reversal is automatic. [Halloway v. Ar-

kansas, 98 8. Ct. 1173, 1181 ay (Emphasis

added. ) ]

* Employed non-resident counsel was present but stated his re-

luctance to go to trial without Alabama counsel. The trial court

vacillated between appointing counsel and requiring the trial to

commence without local counsel, The question before this Court

was whether appointment of local counsel on the eve of the trial in

substance was a denial of the right to counsel. 287 U.S, 45, 52.

"See also, Reynolds v. Cochran, 365 U.S. 525, 530 (1961), re-

affirming the right to retained counsel in ‘‘civil or criminal pro-

ecedings’’ in reversing a conviction in which a continuance re-

quested to secure retained counsel was denied.

6

While this Court alluded in Powell to the right to

counsel in civil litigation at common law,’ the only

additional pronouncement of significance in a civil

case is found in Goldberg v. Kelly, 397 U.S. 254, 270

(1970). Citing Powell in the context of representation

in welfare-termination hearings, the Court concluded :

The right to be heard would be, in many cases, of

little avail if it did not comprehend the right to

be heard by counsel .... We do not say that coun-

sel must be provided at the pre-termination hear-

ing, but only that the recipient must be allowed

to retain an attorney if he so desires. (Emphasis

added. )

At issue in this case is a sum in excess of $600,000.”

As poignantly explained in a separate dissent by Chief

Judge Harris:

This lawsuit involved quite a bit of money and

appellants had employed an Arkansas attorney to

assist in their representation; yet, this attorney

for no valid legal reason, was prohibited from ren-

dering the service for which he had been employed.

The Mississippi counsel then immediately moved

* Originally, in England, a person charged with treason or felony

was denied aid of counsel except in respect of legal questions

which the accused himself might suggest. At the same time

parties in civil cases .. . were entitled to the full assistance of

counsel, [287 U.S. at 60. (Emphasis added.) ]

*In Wolff v. McDonnell, 418 U.S. 539, 570 (1974), the conclusior

was reached that inmate participants in prison disciplinary pro-

ceedings may be denied the right to counsel since ‘‘ [t]he insertion

of counsel into the disciplinary process would inevitably give the

proceedings a more adversary character and tend to reduce their

utility as a means to further correctional goals.’’

The lend brought $400,000 at the foreclosure sale. The defi-

ciency judgment exceeds $200,000. R. 84.

7

for a continuance in order that he might employ

some other member of the Arkansas Bar, but this

was refused. .. . There was no reason in advance

for out-of-state counsel to feel that [Arkansas

counsel] ... would not be able to participate since

the latter attorney would not be called for appel-

lants, and Na en < counsel] ... was thus left

helpless other than to proceed with the trial him-

pe: I know that I would personally dislike going

to a sister state, whose rules of procedure and evi-

dence may well differ from that of Arkansas, to

try a case without the help of an attorney of that

locality.’’ [Appendix A at 14a (Emphasis added. ) ]

Powell accepts the proposition of the constitutional

necessity for qualified local counsel ; Chandler reaffirms

in the context of an unqualified right to retained coun-

sel; Goldberg mandates the right to retained counsel

in welfare-termination hearings; and Holloway re-

iterates the basic proposition that where the right to

counsel is denied or abridged prejudice is presumed

and reversal is automatic. The instant case now af-

fords the Court its first opportunity to apply the here-

tofore unquestioned dictum in Powell to a civil case.

For this reason the writ should be granted.

2. The Decision of the Arkansas Supreme Court Conflicts With

the Decisions of This Court In Criminal Cases.

As demonstrated by the Powell—Chandler—Hollo-

way line of decisions, the lower court opinion is in

direct conflict with standards established by this Court

in criminal cases. Specifically, the denial of the right

to retained counsel clearly falls within this Court’s

holding in Chapman v. California, 386 U.S. 18, 24

(1976), that ‘‘there are some constitutional rights so

basic to a fair trial that their infraction can never

8

be treated as harmless error.’’ Accord, House v. Mayo,

324 U.S. 42, 46 (1941) (demonstration of prejudice not

required where right to retained counsel denied.) As

such the “harmless error’’ approach utilized by the

Court below has no precedential support.” The cur-

rent status of the law is clearly stated in the dissent

where Judge Howard, paraphrasing the rule enun-

ciated in Glasser v. United States,” and anticipating

the holding of this Court in Holloway, concludes:

Appellants had only their Mississippi attorney

who stated that his familiarity with Arkansas law

and trial procedure, at best, was limited. However,

the majority goes on to affirm the ruling of the

trial court by finding that Appellants have not

been prejudiced by the exclusion of its only Ar-

kansas attorney from the teeter, The posi-

tion taken by the majority is untenable. ... [T]he

right of a litigant to counsel of his choice is so

fundamental and basic under American jurispru-

dence that prejudice is presumed to have resulted

without the Court having to indulge in nice and

dainty calculations as to the amount of prejudice

resulting from its denial. [Appendix A at 15a.]

Cited for the proposition that ‘‘harmless error’’ forecloses

reversal are the opinions of this Court in Chapman v. California,

386 U.S. 18 (1967) and Gilbert v. California, 388 U.S. 263 (1967).

Appendix A at 16a, Chapman only supports the proposition that

references to the failure of the accused to testify constitutes revers-

able error. 386 U.S. at 22-25. See also Jd. at 43 (Stewart, J. con-

curring pointing, inter alia, to the fact that ‘‘harmless crror’’

eriteria not applicable to denial of counsel). In Gilbert the Court

held that although admission of an aeccomplice’s pretrial statement

was harinless error, absence of counsel at a postindictment pretrial

lineup was a basis for automatie reversal. Jd. at 272.

2315 U.S. 60 (1941). ‘‘The right to have the assistance of coun-

sel is too fundamental and absolute to allow courts to indulge in

nice calculations as to the amount of prejudice resulting from its

denial.’’ Jd, at 76. (Emphasis added. )

9

The opinion below is in direct conflict with stand-

ards established by this Court in criminal litigation.

This fact warrants granting of the writ.

3. The Decision Below Conflicts With Decisions of Other State

and Federal Courts.

Subsequent to this Court’s decision in Powell every

lower court which has spoken to the issue concludes

that the right to counsel addressed by that opinion ap-

plies equally to civil cases." In Roberts v. Anderson,

66 F.2d 874 (10 Cir. 1933), the court held that although

the litigant was represented by appointed counsel, the

refusal by a state trial court to allow retained counsel

to participate fully and without restriction in the trial

of a civil case (as contrasted with total exclusion in the

instant case) rendered the proceedings a nullity.

In Steen v. Board of Civil Service Commissioners,

160 P.2d 816, 26 Cal. 2d 716 (1945), a decision to re-

move the appellant from a civil service job was re-

versed pursuant to a finding that counsel of his choice

was denied the right to participate in the administra-

tive hearing. Similarly, the Supreme Court of Ne-

braska, citing Powell, recently reversed a trial court

for its refusal to allow a litigant counsel in an appeal

from a small claims court."* Concluding that the right

‘The lower court’s decision in this case also conflicts with its

own precedent. Pekin Cooperage Co. v. Doughten, 117 Ark. 410,

174 S.W. 1189 (1915) holds that although other Arkansas counsel

was at the trial] it was an abuse of discretion to refuse a continu-

ance to allow the presence of employed counsel where his absence

was the fault of opposing counsel.

** Small claims court acts providing for appeals with vacation of

the small claims court decision (or automatic stays) and a new

trial on all issues with the right to counsel assured do not offend

due process rights. Foster v. Walus, 81 Idaho 452, 347 P.2d 120

10

to counsel was unconstitutionally denied, the court

stated that it was unrealistic to assume that a defen-

dant ‘‘should be expected to know that if he wishes to

appear by counsel’’ on appeal he must file a request

for a jury in the small claims court. Simon v. Liber-

man, 193 Neb, 321, 226 N.W.2d 781, 784 (1975). Accord,

Mendoza v. Small Claims Court, 49 Cal.2d 668, 321

P.2d 9 (1959) (possibility that litigant in small

claims court could be deprived of property without

retained counsel present renders small claims act un-

constitutional)

Only Arkansas has held that the denial of counsel

in a civil case can be harmless error, Only Arkansas

would measure ‘‘harmless error’’ without regard to

the standards imposed by this Court where questions

of constitutional magnitude are involved. As one of the

dissents in the lower court states:

Let us remember that a trial should not only be

fair... but the trial should also have every ap-

pearance of fairness, and I certainly see where

appellants could feel that they were mistreated

when the Arkansas attorney that had been em-

ployed was prohibited from engaging in the trial,

#6 § they were further denied the opportunity to

obtain other counsel licensed in this state. [Appen-

dix A at 14a.]

This resulting conflict warrants the granting of the

writ.

(1959). Cf. North v. Russell, 427 U.S. 328 (1976) (not denial of

due process where misdemeanor defendant tried by lay judge had

right to appeal with automatic stay and new trial on facts and law

before lawyer-judge.) The ‘‘trial de novo’’ alluded to by the Ar-

kansas Supreme Court, Appendix A at la, involves only the scope

of review of the facts on appeal from a chancery court, not a re-

trial of the case as provided for in the small claims court statutes.

See Grayson v. Bowie, 197 Ark. 128, 122 S.W.2d 536, 537 (1938) ;

Leach v, Smith, 130 Ark, 465, 197 S.W. 1160, 1162 (1917).

11

CONCLUSION

Flying the banner of harmless error, the Arkansas

Supreme Court rejects as grounds for reversal:

(1) Exclusion of petitioners’ Arkansas attorney

from the courtroom ;

(2) Refusal to grant a continuance in order to

secure local counsel ;

(3) Requiring that representation be limited to

that afforded by a non-licensed attorney; and

(4) Excluding essentially all of petitioners’ evi-

dence relating to the defense of usury.

Laying aside the convoluted reasoning used to justify

the holding of the majority two points are clear. First,

as stated in the dissent of chief Judge Harris, ‘‘there

is no way of knowing how [an] ... Arkansas attorney

would have handled matters had he been participat-

ing.’’ Second, the lower court’s decision with respect

to the denial of the right of retained counsel of ones

choice is contrary to the precedent of this Court and

all lower courts which have considered the issue.

Petitioners respectfully submit that the petition for

the writ of certiorari be granted.

Respectfully submitted,

T. H. Freevanp, IIT

P.O. Box 269

Oxford, MS 38655

Isaac A. Scort, JR.

2200 Worthen Bank Building

Little Rock, AR 72201

Counsel for Petitioners

Of Counsel:

GrorGE C. COCHRAN

Law School

University of Mississippi

University, MS 38677

APPENDIX

la

APPENDIX

SUPREME COURT OF ARKANSAS, IN BANC.

No. 77-201.

McCoy Fars, Inc., et al., Appellants,

v.

J & M McKes et al., Appellees.

March 6, 1978.

Rehearing Denied April 17, 1978.

Foateman, Justice.

This appeal was taken from a decree foreclosing a pur-

chase money mortgages on farm lands which had been con-

veyed by appellees to appellants. The mortgage secured

the payment of a promissory note dated February 1, 1976,

executed by appellants for $539,200 with interest at 814%

per annum, payable on February 1, 1977. Appellants de-

fended the mortgage foreclosure action on the ground that

the note was usurious. It was the contention of appellants

that this note was usurious because it was actually exe-

cuted on August 30, 1976, but backdated to February 1,

1976. The court rejected this contention. We find no re-

versible error on trial de novo and affirm.

At the outset, we dispose of one of appellants’ points

for reversal by sustaining their contention that the chan-

cellor erred in excluding documents and testimony offered

by them to show the facts and circumstances relating to

the note and mortgage and their execution. Such evidence

is admissible on the issue of usury. American Physicians

Insurance Co. v. Hruska, 244 Ark. 1176, 428 S.W.2d 622;

Textron v. Whitener, 249 Ark. 57, 458 S.W.2d 367. It was

error to exclude this evidence and we consider all such

proffered evidence on trial de novo. Price v. Price, 258

Ark. 363, 527 S.W.2d 322.

2a

We also find that the chancellor erred in excluding ap-

pellants’ Arkansas attorney from the courtroom on mo-

tion of appellees’ attorney when the latter stated that he

might find it necessary to call appellants’ attorney as a

witness. Neither our statutes on sequestration of witnesses

nor the Code of Professional Conduct requires this, when

an attorney is called as a witness by, and testifies on be-

half of, an adverse party.

Rule 615 of the Arkansas Uniform Rules of Evidence

was in effect at the time of the trial. It requires that the

court order witnesses excluded at the request of a party.

Ark.Stat.Ann. § 28-1001 (Supp. 1977). But it does not

authorize exclusion of a person shown by a party to be

essential to the presentation of his cause. A party’s only

lawyer would certainly fall into the category of those who

are not to be excluded. This would require the court to

determine the question of essentiality of the presence of

a potential witness to the presentation of a party’s case

and that question would arise when a party is represented

by more than one attorney. The trial judge in such cases

must have some latitude of discretion, which would be

narrowed under circumstances prevailing here, i.e., when

the witness to be excluded is the party’s only Arkansas

attorney in a case in a court of this state. ,

In adopting the Uniform Rules of Evidence, the Gen-

eral Assembly did not specifically repeal Ark.Stat.Ann.

§ 28-702 (Repl. 1962) governing sequestration of wit-

nesses, although there was a specific repeal of the very

next section, §2, Act 1143 of 1975. The adopting act did

contain a general repealer. In our view of.this case, how-

ever, it is not necessary that we decide whether there is

an irreconcilable conflict in the two statutes.

The earlier statute [Ark.Stat.Ann. § 28-702 (Repl.

1962)] only applied to sequestration (or segregation) of

witnesses of the party adverse to the party requesting

exclusion. Appellants assured the court that they had no

3a

intention of calling this attorney as a witness. Still, the

request was made by appellees and the chancellor was

persuaded to honor it. The application of the rule of se-

questration under this statute to any witness was, at the

most, discretionary with the court. St. Louis, J. M. & 8.

Ry. Co. v. Pate, 90 Ark. 135, 118 S.W. 260 (1909); South-

ern Anthracite Coal Co. v. Bowen, 93 Ark. 140, 124 S.W.

1048, See also, Copeland v. State, 226 Ark. 198, 289 S.W.

2d 524; Benson v. State, 149 Ark. 633, 233 S.W. 758. The

trial court had discretion in determining which witnesses

may be put under the rule and which ones, if any, may

be excused from the rule. Arkansas Motor Coaches v.

Williams, 196 Ark. 48, 116 S.W.2d 585; Home Mutual Fire

Ins. Co. v. Riley, 252 Ark. 750, 480 S.W.2d 957.

The rule against the attorney who becomes a witness

continuing as an advocate was not designed to permit a

lawyer to call opposing counsel as a witness and thereby

disqualify him. See Code of Professional Responsibility,

DR 5-102(B). Galarowicz v. Ward, 119 Utah 611, 230

P.2d 576 (1951); Phillips v. Liberty Mutual Ins. Co., 43

Del.Ch. 436, 235 A.2d 835 (1967); Beavers v. Conner, 258

So.2d 330 (Fla. 1972). The language of Jones v. Hardesty,

261 Ark. 716, 551 S.W.2d 546, relied upon by appellees to

justify the action taken, does not support their position.

It is true that the attorney there testifying had been called

to the witness stand by adverse counsel, but the cause for

this court’s concern was the fact that the testifying attor-

ney thereafter cast himself in the role of witness for his

own client.

We have held that it was within the trial court’s dis-

cretion to permit an attorney for a party to testify in a

case, even though the rule has been invoked. Arkansas

Motor Coaches v. Williams, supra; Oakes v. State, 135

Ark. 221, 205 S.W. 305. But we have not hesitated to re-

verse a judgment for abuse of that discretion. Rushton v.

First National Bank of Magnolia, 244 Ark. 503, 426 S.W.

4a

2d 378. A judgment will not be reversed, however, be-

cause of the court’s action with reference to exclusion

of witnesses, in the absence of an abuse of discretion.

Mikel v. State, 182 Ark. 924, 33 S.W.2d 397.

We are admonished by statute that no judgment shall

be reversed or affected by any error or defect in the pro-

ceedings which does not affect the rights of the adverse

party. Ark.Stat.Ann. § 27-1160 (Supp.1977). In any event,

we should not reverse the action of the trial court in the

exercise of discretion in a matter of practice and proce-

dure, when there has been no prejudice to the complain-

ing party in the ultimate result. Naler v. Ballew, 81 Ark.

328, 99 S.W. 72; Kansas City Southern Ry. Co. v. Mur-

phy, 74 Ark. 256, 85 S.W. 428; St. Louis, I. M. & 8. Ry.

Co. v. Boback, 71 Ark. 427, 75 S.W. 473; St. Lowis I. M.

@ §. Ry. Co. v. Devaney, 98 Ark. 83, 135 S.W. 802; Rail-

way Co. v. Sweet, 57 Ark. 287, 21 S.W. 587. See also,

State v. Jennings, 10 Ark. 428; Globe Life Ins. Co. v.

Humphries, 258 Ark. 118, 522 S.W.2d 669; Bates v. Sim-

mons, 259 Ark. 657, 536 S.W.2d 292; Parker v. Wells, 84

Ark. 172, 105 S.W. 75; Kelly v. DeWees, 200 Ark. 770, 140

S8.W.2d 1011. Error unaccompanied by prejudice, com-

monly called harmless error, is not ground for reversal.

Keathley v. Yates, 232 Ark. 473, 338 S.W.2d 335; Christ-

mas v. Raley, 260 Ark. 150, 539 S.W.2d 405; Railway Co.

v. Sweet, supra. The harmless error rule applies even

when the error is of constitutional proportions. Chapman

v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705,

24 ALR3d 1065 (1967), reh. den. 386 U.S. 987, 87 S.Ct.

1283, 18 L.Ed.2d 241; Gilbert v. California, 388 U.S. 263,

87 S.Ct. 1951, 18 L.Ed.2d 1178 (1967).

We do not see how appelants have been prejudiced by

the exclusion of its only Arkansas attorney from the pro-

ceedings. The facts seem to be undisputed. The legal ques-

tion seems to have been adquately presented. It has been

presented here on trial de novo and the law firm of the

5a

excluded attorney has apparently participated in appel-

ants’ brief, as its name appears thereon. Yet no attempt

was made to have a review or rehearing in the trial court

with the participation of Arkansas counsel or to offer

evidence that had not been offered at the trial or to pre-

sent any legal aruement that might have, but had not,

been made. We find no prefudice to appellants by the

exclusion of their Arkansas attorney on the possibility

that he might be called as a witness by appellees.

Although we mgiht say that there was an abuse of the

trial court’s discretion in denying appellants’ mortion for

a continuance to obtain other Arkansas counsel, if there

had been any showing that prejudice resulted, in the ab-

sence of any such showing, there is no ground for reversal.

Mammoth Spring School District No. 2 v. Fairview School

District No. 7, 190 Ark. 769, 80 S.W.2d 615; Missouri Pac.

R. Co. v. Berry, 191 Ark. 1165, 83 S.W.2d 531; Missouri

& N. A. R. Co. v. Robinson, 188 Ark. 334, 65 S.W.2d 546;

Barrett v. Berryman, 127 Ark. 609, 193 S.W. 95, Even

when there is a clear abuse of discretion in the denial of

a motion for continuance, the error is not reversible un-

less there is a showing of prejudice. Finch v. State, 262

Ark. —— (17 Oct. 1977), —— 8.W.2d ——. Even though a

motion: for new trial is not required, as a prerequisite to

appellate review, it is still a procedure available for show-

ing prejudice in a ruling of the trial court when it was not

possible to make that showing at the time of the ruling.

Finch v. State, supra. Even though it is doubtful that,

strictly speaking, a motion for new trial is appropriate in

a chancery case, a bill of review or petition for rehearing

can serve the same purpose in chancery. Midwest Lime

Co. v. Independence County Chancery Court, 261 Ark.

695, 551 S.W.2d 537. If there had been any prejudice to

appellants in exclusion of their Arkansas attorney from

the proceedings, it might have been shown, or at least

alleged, in a bill of review or petition for rehearing.

6a

Where the decision and judgment is correct on the un-

disputed evidence, the appellant is in no position to com-

plain. Yutterman v. Grier, 112 Ark. 366, 166 S.W. 749.

Since, as we view the matter, the procedural error,

granted that there was an abuse of discretion in the mat-

ter, did not and could not have affected the correct result

reached by the trial court, there is no prejudice, and con-

sequently, no reversible error.

The real issue in this case is whether the note sued on

was usurious. The transaction commenced with the execu-

tion of a contract for the sale of certain farmland by ap-

pellees to appellants David B. Boone and Oval McCoy,

Jr. The purchase price was $889,200, of which $60,000 was

payable in cash at the time of closing (of which a $50,000

promissory note, due and paid on January 7, 1976 was a

part) the assumption of an indebtedness of $290,000 to

Connecticut General Insurance Company and a balance of

$539,200 to be evidenced by a promissory note due Febru-

ary 1, 1977. The contract, dated November 13, 1975, pro-

vided for closing of the sale on February 1, 1976. Although

the contact provided that possession of the property be

given on delivery of a deed, the contract contained a clause

permitting the purchasers to occupy the land after execu-

tion of the contract for the purpose of farming, ditching,

leveeing, discing and making improvements on the land at

their own expense, and without any right to recover any

expenditures made for the purposes from the sellers.

A promissory note bearing interest anterior to its date

which does not provide on its face for an interest rate in

excess of the maximum permissible rate, is presumed to

have been given upon a state of facts which authorized the

taking of the instrument and to be lawful and valid. Ewing

v. Howard, 74 U.S, 499, 19 L.Ed 293 (1869); Gettinger v.

Lattington Harbor Development Co. Inc., 17 A.D.2d 629,

230 NYS2d 765 (1962) ; Williams v. Bronston, 190 Cal.App.

7a

2d 812, 12 Cal.Rptr. 463 (1961); Franklin National Bank

v. Feldsman, 42 Mise.2d 839, 249 NYS2d 181 (1964). See

also, Ansley v. Bank of Piedmont, 113 Ala. 467, 21 So. 59

(1896). An antedated note is not usurious, as a matter of

law, when the amount of interest paid would exceed the

permissible rate applied to the principal for the period be-

tween the date it was delivered and the due date, unless it

was antedated merely to avoid the law of usury. Ansley v.

Bank of Piedmont, supra.

It has been held that a note bearing interest from the pro-

per date for closing a sale and purchase of real estate

would not be usurious when it was given and dated on a

postponed date of closing, when the postponement was

solely at the request and for the convenience of the pur-

chaser. Gettinger v. Lattington Harbor Development Co.,

supra. It was recognized that, in case of specific perform-

ance, the seller might well have been entitled to interest

from the original closing date. A note given for a debt due

before its execution is not usurious when interest at a legal

rate runs from the due date, even though the notes evidenc-

ing the debt are not signed until a later date. Burleson v.

Morse, 172 S.W. 38€ “»«.Civ.App., 1943).

Since the not » »resumed to have been valid on

its face, the bu . «pon appellants to show by clear

and convincing ¢ .ence that it was void for usury. Peoples

Loan & Investm: nt Co. v. Booth, 245 Ark. 146, 431 S.W.2d

472; Brown v. Cv‘ tral Arkansas Production Credit Ass’n.,

256 Ark. 804, 51u S.W.2d 571; Commercial Credit Plan v.

Chandler, 218 Ark. 966, 239 S.W.2d 1009; Smith v. Mack,

105 Ark. 653, 151 8.W. 431. Usury will not be presumed,

imputed to the parties or inferred, if the opposite result

can be fairly and reasonably reached. Hayes v. First Na-

tional Bank of Memphis, 256 Ark. 328, 507 S.W.2d 701;

Davidson v. Commercial Credit Equipment Corp., 255 Ark.

127, 499 S.W.2d 68; Briggs v. Steel, 91 Ark. 458, 121 S.W.

754. In determining whether the note was usurious, the

8a

matter must be viewed as of the time it was made in the

light of all attendant circumstances germane to the trans-

action. Hayes v. First National Bank of Memphis, supra;

Brown v. Central Arkansas Production Credit Ass’n.,

supra; Key v. Worthen Bank & Trust Co. N. A., 260 Ark.

725, 543 S.W.2d 496.

When we consider the note in question in light of the

circumstances under which it was executed, and the evi-

dence in the light most favorable to appellants, appellants’

burden was insurmountable and only one result can be

reached, i.e., the one reached in the trial court. Shortly

after the contract was signed, appellants availed themselves

of the right under the contract with appellees to go upon

the property, at their own risk, to make improvements.

They spent approximately $135,000 in building 84% miles of

levees and discing the land. Appellants McCoy and Boone

refused to close on February 1, 1976, the closing date pro-

vided for in the contract, because appellees refused to con-

vey to appellant McCoy Farms, Inc., assignee of McCoy

and Boone, but not a party to the contract, unless McCoy

and Boone joined in the execution of the deferred purchase

money notes so that they would be personally liable. The

appellees had agreed to sell to the purchasers (McCoy and

Boone) or to anyone they might name, but the terms of the

contract specified that a part of the purchase price be in the

form of a promissory note executed by the purchasers for

$539,200, due February 1, 1977, with interest at 842% per

annum. McCoy Farms, Ine. filed suit against appellees for

specific performance. Appellees counterclaimed, seeking

judgment for $50,000 as liquidated damages for breach of

the contract.

Trial commenced on July 26, 1976, but at the noon recess,

the parties entered into a stipulation settling the contro-

versy. It was dictated into the record by appellees’ attor-

ney. In pertinent part, it was:

9a

The plaintiff, McCoy Farms, Inc., agrees that effec-

tive August 30, 1976, they will cause J. M. McKee and

Margaret McKee to be made whole under the terms

of the provisions of the contract dated on or about No-

vember 13, 1975. That on August 30, 1976, the contract

will be closed in the same manner and with the same

terms and provisions as it would have been closed had

no controversy arisen in the previous closing date. In

order to make John McKee and Margaret McKee whole

to payments acquired, plus proportionate interest on

$10,000.00 at eight and a half percent interest, the net

result will be that on August 30, 1976, the new closing

date, the parties will then stand in the same position

as they would have on November 13, 1975. The Note

will be signed and endorsed personally by David B.

Boone and Oval McCoy, Jr., and McCoy Farms, Inc.,

and the Mortgage executed properly under the contract

will be applied * * * *

Let the record further show that the parties agree

that the present action shall not at this time be dis-

missed but shall be held in abeyance with the Court

retaining jurisdiction with proper Orders, Judgment

and Decrees as they may be approved under the plead-

ings thus far and this Stipulation, and, after the matter

has been closed on August 30, 1976, the initial complaint,

counterclaim and all matters will be dismissed with

prejudice and each party will bear their own costs.

“‘In other words exactly in accordance with the

terms of the contract, Your Honor. Everything like it

was back to that.’’ [Emphasis ours. ]

In appellees’ counterclaim, they had sought to recover

$50,000 in damages from appellants Boone and McCoy.

Thus, Boone and McOoy stood to lose $50,000 plus the cost

of the improvements made by them at their own risk, if

they lost the suit they brought. The settlement made was,

in effect, a specific performance of the contract as written,

10a

which may have seemed to appellants preferable to the risk

inherent in the trial and ultimate resolution of the issues

in the case.

If appellees had sought and been granted specific per-

formance, they would have had a firm basis for asking that

they recover interest from the original closing date. Speci-

fic performance is an equitable remedy which compels the

performance of a contract on the precise terms agreed upon

or such a substantial performance as will do justice be-

tween the parties under the circumstances. It is a means of

compelling a contracting party to do precisely what he

should have done without being coerced by a court. 81

CJS 701; Specific Performance, § 2; 71 Am.Jur.2d 10, Spe-

cific Performance, §1; Restatement of the Law, Contracts

§ 358, Comment a, § 359(2), § 360(b), § 326(c). The object

in such cases is to place the party without fault in as nearly

' the same position as he would have been had there been no

default by the other party. Pillsbury v. J. B. Streeter, Jr.

Co., 15 N.D. 174, 107 N.W. 40 (1906). The guiding principle

in such cases is to relate the contract back to the date set

therein. Ellis v. Mihelis, 60 Cal.2d 206, 32 Cal.Rptr. 415,

384 P.2d 7 (1963); Meyer v. Benko, 55 Cal.App.3d 937, 127

Cal.Rptr. 846 (1976). Although, strictly speaking, legal

damages are not awarded when specific performance is de-

creed, a decree should, as nearly as possible, require per-

formance in accordance with the terms of the contract, one

of which is the date fixed by it for completion; and, when

that date is past, the court, in order to relate the perform-

ance back to it, gives the complainant credit for any losses

occasioned by the delay. Ellis v. Michelis, supra.

The contract in this case called for closing on February

1. It provided for interest on the deferred purchase price

from the date of closing. As a general rule, in a specific

performance case where the purchaser of land is in de-

fault, he is to be charged with interest from the time the

purchase price should have been paid under the contract.

lla

Kirkland v. O’Kelly, 218 Ala. 68, 117 So. 420 (1928). The

allowance of interest during a period of default is a

proper and equitable adjustment in arriving at justice

between the parties to a specific performance suit. Pills-

bury v. J. B. Streeter, Jr. Co., supra. See also, Ellis v.

Mthelts, supra; Meyer v. Benko, supra; Loveless v. Diehl,

236 Ark. 129, 364 S.W.2d 317.

It is the policy of the law to encourage settlement of

litigation and to uphold and enforce contracts of settle-

ment if they are fairly arrived at and not in contraven-

tion of law or public policy. St. Paul Fire & Marine In-

surance Co. v. Wood, 242 Ark. 879, 416 S.W.2d 322;

Burke v. Downing Co., 198 Ark. 405, 129 S.W.2d 946;

Jacobs v. American Bank & Trust Co., 175 Ark. 507, 299

S.W. 749. There is no contention that the stipulation for

settlement was not arrived at in good faith or that there

was no consideration for the settlement. Certainly the

stipulation could not be said to be illegal for usury, if the

equity court could have awarded the interest of which

appellants complain. The only question before us is the

interpretation of the contract. In view of the italicized

parts of the stipulation, we interpret it to call for the

execution of the note, exactly as it would have been exe-

cuted if the transaction had been closed on February 1,

1976. The parties had a right to make any settlement sat-

isfactory to themselves. Burke v. Downing Co., supra.

Appellants seem to imply that they executed the note

under some sort of duress because appellees demanded

that it be dated as it was. Although we feel that appellees

properly made such a demand, it is difficult to see how

appellants can claim that they were coerced when the law-

suit that was settled was still pending and was not to be

dismissed until the stipulation for settlement had been

carried into effect. Certainly they could have resorted to

the trial court to enforce the stipulation for settlement

and resolve disputes about its terms. Jannarone v. W. T.

12a

Co., 65 N.J. Super. 472, 168 A.2d 72 (1961); Goltl v. Cum-

mings, 152 Colo. 57, 380 P.2d 556 (1963); Bankers Fidel-

ity Life Ins. Co. v. O’Barr, 108 Ga.App. 220, 132 8.E.2d

546 (1963); Autera v. Robinson, 136 U.S.App.D.C. 216,

419 F.2d 1197 (1969); All States Investors, Inc. v. Bank-

ers Bond Co., 343 F.2d 618 (6 Cir., 1965), cert. den. 382

U.S. 830, 86 S.Ct. 69, 15 L.Ed.2d 74.

Appellants complain that they were wrongfully evicted

from the property after they went into possession to make

improvements and after the dispute had arisen, and, this

being so, they could not be required to pay interest until

possession was restored after the closing which took place

on August 30. A complete answer to this question is that

both parties claimed that the other had breached the con-

tract and this dispute was resolved by the settlement.

The judgment is affirmed.

Harris, C. J., and Hickman and Howarp, JJ., dissent.

Harris, Chief Justice, dissenting.

My dissent is based on the fact that the trial court ex-

cluded appellants’ Arkansas attorney from the courtroom

on motion of appellees’ attorney, and, further, excluded

relevant evidence. These two matters will be discussed to-

gether. Indeed, the majority itself finds both rulings to

be erroneous.

There is no point in my setting out why the former

ruling was an abuse of discretion since the majority con-

cede that this action by the court constituted error; how-

ever, the majority go on to say that the error was not

prejudicial, and I suppose this is based on the fact that

out of state counsel, T. H. Freeland, ITI, of Oxford, Mis-

sissippi, proceeded with the case. I do not see how this

finding of no prejudice is so clear. Case after case holds

that where this court finds error, unless such error is

clearly not prejudicial, we reverse; or to state it another

13a

way, where error is shown, it is presumed that such is

prejudicial unless it affirmatively appears otherwise. Ark.

State Highway Commission v. Spence, 254 Ark. 423, 494

S.W.2d 469. There are dozens of cases to the same effect.

Of course, the word “affirmatively” means that the bur-

den is on the party, who benefited from the error, to

establish clearly that there was no prejudice. I cannot

agree that this has been done.

In the first place, there is no way of knowing how the

Arkansas attorney would have handled matters had he

been participating. For instance, he might have been able

to persuade the court that the evidence heretofore men-

tioned, consisting of documents and testimony offered by

appellants to show facts and circumstances relating to

the note and mortgage and their execution, was pertinent

and relevant'—a fact which the majority concede, This

testimony was excluded by the trial court, but the ma-

jority say, in effect, that that really makes no difference

since “we consider all such proffered evidence on trial de

novo.” While this has been done in the majority of cases,

I think it is also true that in most of these cases the trial

court heard the proffer and simply held such evidence in-

admissible. In the instant case, according to the record,

the chancellor left the courtroom and returned to cham-

bers,’ appellants making their proffer in his absence, and

he did not return to the courtroom until the proffer of

evidence had been concluded. Accordingly, he did not

know what specific evidence was being tendered. I cer-

tainly cannot say that his decision would have been ex-

actly the same had this evidence been accepted—perhaps

* Another of the justices has pointed out in a dissent a couple of

instances where the Mississippi attorney needed advice on proce-

dural points,

*The court had excluded the evidence on the basis that any

occurrences prior to the compromise settlement were irrelevant and

not material to the cause of action.

l4a

so—perhaps not, but at any rate, the trial court should

have, in my view, the opportunity to hear, and consider,

the evidence which the majority admit was entirely ad-

missible.

This lawsuit involved quite a bit of money and appel-

lants had employed an Arkansas attorney to assist in their

representation;* yet, this attorney, for no valid legal

reason, was prohibited from rendering the service for

which he had been employed. The Mississippi counsel then

immediately moved for a continuance in order that he

might employ some other member of the Arkansas Bar,

but this was refused. Since I consider the exclusion of

Mr. Gaughan to have constituted prejudicial error, cer-

tainly I also consider it prejudicial error to refuse to

grant the continuance. There was no reason in advance

for out of state counsel to feel that Mr. Gaughan would

not be able to participate, since the latter attorney would

not be called for appellants, and Freeland was thus left

helpless other than to proceed with the trial himself. I

know that I would personally dislike going to a sister

state, where rules of procedure and evidence may well

differ from that in Arkansas, to try a case without the

help of an attorney of that locality.

Let us remember that a trial should not only be fair

(and I do not question the fair-mindedness of the chan-

cellor whom I consider to be a conscientious jurist), but

the trial should also have every appearance of fairness,

and I can certainly see where appellants could feel that

they were mistreated when the Arkansas attorney that

had been employed was prohibited from engaging in the

trial, and they were further denied the opportunity to ob-

tain other counsel licensed in this state.

*Some trial courts even require that a non-resident attorney

associate a lawyer residing and admitted to practice in the State of

Arkansas with him in the litigation.

l5a

It is my view that this court, having found that the

exclusion of the testimony herein mentioned was error,

and having found that the Arkansas attorney was im-

properly excluded, should remand this case for further

proceedings.

Hicuman, J., joins in this dissent.

Howarp, Justice, dissenting.

The majority concedes that the chancellor erred in ex-

cluding appellants’ Arkansas attorney from the courtroom

on motion of appellees’ attorney under the pretext that

appellees’ attorney might find it necessary to call appel-

lants’ Arkansas attorney as a witness.' Thus, leaving

appellants without the aid and assistance of their Ar-

kansas attorney who was well versed in Arkansas law and

trial procedure. Appellants had only their Mississippi

attorney who stated that his familiarity with Arkansas

law and trial procedure, at best, was limited.? However,

the majority goes on to affirm the ruling of the trial court

*Rule 615 of the Uniform Rules of Evidence, which became

effective July 1, 1976, and, consequently, in force during the trial

of this case, provides: At the request of a party the court shall

order witnesses excluded so that they cannot hear the testimony of

other witnesses, and it may make the order of its own motion. This

rule does not authorize exclusion of (1) a party who is a natural

person, or (2) an officer or employee of a party that is not a natural

person designated as its representative by its attorney, or (3) a

person whose presence is shown by a party to be essential to the

presentation of his cause. (Emphasis added)

During oral argument, counsel stated that this rule wag not

called to the attention of the trial court, consequently it seems that

both counsel and the court were unaware of the existence of this

rule.

? On one occasion, the Mississippi attorney solicited advice from

the trial court on a point of procedure; and on another occasion,

counsel for appellees volunteered advice to the Mississippi counsel

on a point of procedure during the course of the trial.

16a

by finding that appellants have not been prejudiced by the

exclusion of its only Arkansas attorney from the proceed-

ings, the position taken by the majority is untenable for

two major reasons and consequently for two major rea-

sons and consequently, I must dissent from the holding

of the majority.

First, the right of a litigant to counsel of his choice is

so fundamental and basic under American Jurisprudence

that prejudice is presumed to have resulted without the

Court having to indulge in nice and dainty calculations

as to the amount of prejudice arising from its deniel.’

In Powell v. Alabama, 287 U.S. 45, 53 S.Ct. 55, 77 L.Ed.

158 (1932), the United States Supreme Court, in empha-

sizing the right of a party to be heard by a counsel of his

choice and that that choice may not be diminished by ne-

farious platitudes, made the following observation:

“Tf in any case, civil or criminal, a state of fed-

eral court were arbitrarily to refuse to hear a party

by counsel, employed by and appearing for him, it

reasonably may not be doubted that such a refusal

would be a denial of a hearing, and, therefore, of due

process in the constitutional sense.” (Emphasis

added)

The majority has further found that even though ap-

pellants’ Arkansas attorney was excluded from the pro-

ceedings, “(t]he legal question seems to have been ade-

quately presented.” But under the instructions of Powell

v. Alabama, supra, appellants were not even afforded a

legitimate hearing. In other words, the proceedings below

were a mere formality.

® See: People v. Bryant (1969) 275 Cal.App.2d 215, 79 Cal.Rptr.

549 [although a criminal case] the court held that the deprivation

of effective counsel is of sufficient constitutional significance to

merit reversal even without actual prejudice.

17a

In Reynolds v. Cochran, 365 U.S. 525, 81 S.Ct. 723, 5

L.Ed.2d 754, which involved a habeas corpus proceed-

ing, the trial court proceeded with the hearing in the ab-

sence of petitioner’s retained counsel; petitioner advised

the court that his counsel was on the way and was due to

arrive on the date of the trial, and asked that the trial

be postponed until his counsel arrived; the court denied

a continuance and concluded, as the majority has con-

cluded in this action, that if it was error to proceed with-

out petitioner’s counsel, it was harmless error in that the

only fact at issue in the proceeding had been admitted

by the petitioner. The Supreme Court in reversing the

trial court concluded that a party has a constitutional

right to be heard by counsel of his choice and a failure

to hear a party by counsel, employed by and appearing

for him, in any civil or criminal case, denies a party a

hearing and therefore denies him due process of law in

the constitutional sense.

In Prudential Ins. Co. of America v. Small Claims

Court of City and County of San Francisco, et al, 7€ Cal.

App.2d 379, 173 P.2d38 (1946), the court made the follow-

ing statement:

“... There can be little doubt but that in both civil

and criminal cases the right to a hearing includes the

right to appear by counsel, and that the arbitrary

refusal of such right constitutes a deprivation of due

process.” (Emphasis added)

Secondly, the majority takes the position that inasmuch

as the proceedings in this case are reviewed de novo,

there has been an independent review and consideration

of all of the evidence in the record, consequently, there is

no merit to appellants’ contention that he has been pre-

judiced one way or the other in the trial court. Thus, the

majority found that the transaction is not usurious and

therefore, the trial court should be affirmed. But it must

be remembered that during oral argument, and indeed

18a

this is to be gleaned from the record, counsel for appel-

lants stated that because of the trial court’s ruling in ex-

cluding certain evidence, but proffered by the counsel for

appellants, all of the evidence available to appellants to

support its defense of usury was not introduced. Hence,

the majority in order to defend the posture which it has

assumed in this case has had to speculate on the weight,

materiality and authenticity of the evidence that is not in

the record. Indeed, the majority has exceeded the scope

and latitude of appellate review.

Finally, the ‘following from 16 Am.Jur.2d p. 973, Sec-

tion 569, sums up succintly the thread intended to be

woven in this dissent:

“... no one may be legally divested of his prop-

erty unless he is allowed a hearing before an impar-

tial tribunal, where he may contest the claim set up

against him, and be allowed to meet it on the law and

facts and show if he can that it is wnfounded, He

must be given his day in court.” (Emphasis added)

Harnis, C. J., and Hichman and Howarp, JJ., would

grant the rehearing.