Court Opinion

ID: 7823842
Source: CourtListenerOpinion
Date Created: 2022-09-07 18:02:28.782693+00
Date Added: 2024-06-11T16:30:48.538111
License: Public Domain

Tom Glaze, Justice, concurring. I fully agree with the majority’s decision on direct appeal, but concur as to that portion of the court’s holding on cross appeal allowing Wills to offset punitive damages against Union National Bank. First, whether the circuit court had authority to subrogate Wills’ promissory note (held by Hooper Bond Co.) to the Bank was never questioned below. Yet, from my examination of the documents, I find nothing that provides for subrogation rights. Because no contractual agreement provided the remedy of subrogation, the parties should have tried the issues of subrogation and set off in chancery instead of circuit court. In Southern Cotton Oil Co. v. Napoleon Hill Cotton Co., 108 Ark. 555, 158 S.W. 1082 (1913), the court explained that the doctrine of subrogation is a creature of equity, “having for its basis the doing of complete and perfect justice between the parties, without regard to form, and its purpose and object is the prevention of injustice.” See also Baker, Adm’r v. Leigh, 238 Ark. 918, 385 S.W.2d 790 (1965); Webster v. Horton, 188 Ark. 610, 67 S.W.2d 200 (1934). Likewise, the doctrine of equitable setoff is available in equity although the remedy for setoff of contract and tort claims is also provided by statute. See Ark. Code Ann. § 16-63-206(a) (1987). In any event, the Bank waived all equitable remedies it may have had by failing to move that the subrogation matter be transferred to chancery court. On appeal, this court then is left with the circuit court’s subrogation of the Wills’ note to the Bank as not having been challenged; however, Wills’ attempt to setoff his punitive damages award against that note was argued below and is now in issue and must be decided. As the majority court suggests, the subrogee (Bank) must operate under the same conditions and limitations as the creditor (Hooper Bond) whose rights he inherits. 83 C. J.S. Subrogation § 14 (1953). Although Union National Bank argues that it is being forced to pay for the wrong of another, it is not without recourse. In Home Insurance Co. v. Lack, 196 Ark. 888, 120 S.W.2d 355 (1938), citing from 60 C.J. 728, we said, “As a general rule any person who, pursuant to a legal obligation to do so, has paid even indirectly for a loss or injury resulting from the wrong or default of another, will be subrogated to the rights of the creditor or injured person against the wrongdoer or defaulter.” In sum, after the setoff is permitted against the Wills’ note, the Bank will be entitled to seek its cause of action against Hooper Bond (and its principals) for the punitive damages which were awarded Wills on his fraud claim against Hooper Bond. In this respect, Hooper Bond and its principals are not absolved of their wrongdoing and remain liable for it.