Lead Opinion
Appellant, Michael Paine, appeals from the chancellor's decree settling the accounts of appellant and appellee Timothy Walker, after the parties dissolved their partnership, WP. Farms. Mr. Paine argues that the chancellor erred in determining that an intervenor to the lawsuit, appellee Rose Walker, held a life estate in certain property that she deeded to the partnership. Further, he argues that the chancellor erred in permitting Mr. Walker to introduce hearsay testimony regarding their respective cash capital contributions to the partnership. Finally, he generally argues that the chancellor failed to follow the dictates of the Uniform Partnership Act in winding up the partnership. We reverse on the first two issues and remand for a new trial without addressing Mr. Paine’s final point.
According to the chancellor’s order, in 1991 Mr. Paine and Mr. Walker entered into a partnership under the name of WP. Farms for the purpose of engaging in farming operations, with the parties agreeing to share profits and losses equally. In mid-September of 1998, the parties agreed to dissolve the partnership but failed to reach an enforceable agreement as to how the parties would settle their accounts. In settling the accounts, the chancellor made several dispositions regarding property in the partnership.
In particular, in December of 1994, the intervenor, appellee Rose Walker, deeded to the partnership approximately seventy acres, further providing as follows:
The right to live in the dwelling located on the NWfrl/4 pf (sic) tje (sic) NWfrll/4 Section 5, Township 19 North, Range 24 West is hereby reserved by Grantor, Rose Walker, for as long as she desires to live there.
In settling accounts, the chancellor concluded that Ms. Walker conveyed by general warranty deed a gift to the partnership. Further, the chancellor determined that she reserved a life estate in the 29.92 acres described above and the home located there.
On appeal, Mr. Paine argues that the chancellor erred in finding that Ms. Walker held a life estate in the entire 29.92 acres. We agree. The above-quoted language closely resembles that in Middleton v. Lockhart,
In his order, the chancellor further concluded that Mr. Paine provided cash contributions of $46,628.42 and Mr. Walker provided cash contributions of $126,849.18, the same figures that Mr. Walker presented in his testimony. On direct examination, Mr. Walker testified that money was placed in various accounts for partnership business. Mr. Walker was asked whether “based on your looking at those accounts and adding up the figures,” how much both he and Mr. Paine had put into the partnership, and Mr. Walker provided the above-referenced figures without further elaboration.
On cross examination, however, Mr. Walker admitted that he did not have any records and that he relied on what he was told by the bank. Mr. Paine objected, arguing that the testimony was hearsay. In the decree, the chancellor noted that evidence of these totals came from Mr. Walker’s testimony that was admitted over Mr. Paine’s hearsay objection and that Mr. Walker testified that the totals were “compiled by the First National Bank of Berryville, Arkansas.” The chancellor found that Mr. Walker’s testimony was admissible under the business-records exception to the hearsay rule.
On appeal, Mr. Paine argues that the court’s ruling was error. We agree. As an exception to the hearsay rule, Rule 803(6) of the Arkansas Rules of Evidence permits the admission of business records.
In the decree, the chancellor specifically noted that the cash-contribution figures were “derived from [Mr. Walker’s] testimony that these totals were compiled by the First National Bank of Berryville, Arkansas.” Thus, Mr. Walker presented only bald figures that were derived from bank records by someone at the bank. Even if we assume that Mr. Walker’s testimony was a “compilation,” he failed to present any evidence that his “compilation,” which was made by someone at the bank, was “made ... by, or from information transmitted by, a person with knowledge.” See Ark. R. Evid. 803(6). As we have previously noted, “the party offering
Finally, Mr. Paine argues that the chancellor erred in not according him his rights under the Uniform Partnership Act. Specifically, he argues that the chancellor erred by failing to order an accounting and by failing to allow him to manage partnership assets. Mr. Paine, however, failed to show this court where he made related requests for relief that were adversely ruled upon by the chancellor. Nevertheless, we do not doubt that on retrial the chancellor will accord Mr. Paine whatever rights he may have under the Uniform Partnership Act. Mr. Paine further argues, as he stressed to the chancellor in his motion for a new trial, that his and Mr. Walker’s contributions to the partnership were not properly accounted for by the chancellor. On remand, Mr. Paine and Mr. Walker will undoubtedly readdress, with greater specificity, the issue of their respective contributions to the partnership. Because of the considerable likelihood that the evidence presented at the new trial will be substantially different than the evidence presented here, we do not address Mr. Paine’s argument at this time. Finally, on remand the chancellor should determine how much land is reasonably necessary to accompany the residence reserved by Ms. Walker and provide for legal access to a public road from the residential tract.
Reversed and remanded.
Notes
The exclusion from the hearsay rule provided in Rule 803(6) is as follows:
(6) Records of Regularly Conducted Business Activity. A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses [sic], made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness. The term “business” as used in this paragraph includes business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.
Dissenting Opinion
dissenting. I agree that this case must be reversed and remanded on the first point because of the chancellor’s error in concluding that Rose Walker owned a life estate in 29.92 acres. However, I do not agree that the case must also be reversed on the second point because I believe that it is within the chancellor’s discretion to determine whether a sufficient foundation had been laid to admit Timothy Walker’s testimony about the partnership’s bank-account records under the business-records exception to the hearsay rule.
From the abstract, it appears that Walker testified as follows on direct examination:
We have gone back and looked at the accounts to see how much money I put in as compared to how much money the Paines put in. The Paines put in $46,628.42. I put in $126,849.18, so I put in approximately $80,000 more than they did.
Then, on cross-examination, Walker testified:
I figured out how much each of us put into the partnership whenever we pulled all of the receipts. First National Bank did that for me. I’d put a bunch in and they had put a bunch in too. I didn’t know how much. I didn’t have those —. So far as whether I relied on what somebody told me from the bank, they have the records.
The majority has concluded that Walker’s testimony was inadmissable as hearsay, and not subject to the business-records exception, because he “presented only bald figures that were derived from the bank records by someone at the bank.” I believe the majority has misread or erroneously interpreted Walker’s testimony. During direct examination, Walker clearly stated that “[w]e have gone back and looked at the accounts. . . .” Then, on cross-examination, he testified that “I figured out how much each of us put into the partnership whenever we pulled all the receipts. First National Bank did that for me.” To me, this testimony is more reasonably interpreted to mean that Walker went back and looked at the bank account records that the Bank “pulled” from the records it had, and that, from those records, Walker determined the capital contributions of each of the partners. For the majority to conclude that Walker meant that “the figures were derived from bank records by someone at the bank,” disregards Walker’s statements that “we have gone back and looked at the accounts” and “I figured out how much each of us put into the partnership.” The majority has also concluded that by his statement, “First National Bank did that for me,” Walker must have meant that someone at the bank looked at the account records and made the calculations, completely disregarding Walker’s testimony that he looked at the accounts and he figured the amounts of the partners’ contributions.
Given what I believe to be the more reasonable interpretation of Walker’s testimony, I am unwilling to say that the chancellor erred in concluding that Walker’s testimony about his calculations of the amounts of the partners’ capital contributions to the partnership was within the business-records exception to the hearsay rule.
For the foregoing reasons, I dissent to the reversal as to Paine’s second point.