text:
    J. M. MULLIGAN’S GRILLE, INC. v. Yana L. AULTMAN
    89-134
    780 S.W.2d 554
    Supreme Court of Arkansas
    Opinion delivered December 11, 1989
    [Rehearing denied January 8, 1990.]

      Huckaby, Munson, Rowlett and Tilley, P.A., by: Beverly A. Rowlett, for appellant.

      Gary Eubanks & Associates, by: James Gerard Schulze, for appellee.

      Turner, J., not participating.

   Darrell Hickman, Justice.

This is what is commonly known in legal circles as a slip and fall case. The appellee, Yana L. Aultman, went to Mulligan’s Grille, owned by the appellant, to apply for a job as a waitress. The Grille had only been opened for about a month. After her interview, on her way out of the restaurant, she reached a place where a tile floor met a wooden stairway and slipped and fell. Her case was based solely on her testimony that the floor was slippery. She offered no proof that the materials used for the floor were defective or that there was a foreign substance on the floor. The trial judge refused to direct a verdict in favor of the appellant. He should have. The appellee failed to make a case, and therefore we reverse and dismiss.

We need not consider another issue raised, whether the testimony of two other witnesses was properly admitted. One was the testimony of a bartender that he had seen a busboy carrying a tray of water glasses slip or fall at about the same place. He could not say whether the busboy tripped or slipped. The other witness, a waitress, said she once slipped on another part of the floor. She said the floor “appeared slippery.” She did not know why she slipped. Both incidents occurred after the appellee’s fall.

The appellee said “the floor was very slippery, the coating was very slick, it was very noticeable. There was some kind of coating on the whole floor, the entire floor... it was like a plastic coating of some kind.”

The appellee did not contend that there was a foreign substance on the floor which caused her fall. Her theory of recovery was that the floor itself was so “inherently slippery” that even a person of ordinary care would be likely to slip on its surface.

The mere fact that a person slips and falls does not give rise to an inference of negligence. Dye v. Wal-Mart Stores, Inc., 300 Ark. 197, 777 S.W.2d 861 (1989). Possible causes of a fall, as opposed to probable causes, do not constitute substantial evidence of negligence. Safeway Stores, Inc. v. Willmon, 289 Ark. 14, 708 S.W.2d 623 (1986). In virtually every case involving a fall, the plaintiff will describe a floor as slick or slippery. That is not enough to make a case for negligence. Alterman Foods, Inc. v. Ligon, 246 Ga. 620, 272 S.E.2d 327 (1980); J. C. Penney Co. v. Hoover, 414 P.2d 293 (Okla. 1966).

The appellee relies on the case of National Credit v. Ritchey, 252 Ark. 106, 477 S.W.2d 488 (1972). Ritchey slipped and fell on a terrazzo floor. He said the floor was slick as ice. He also said the manager of National Credit told him that they had recently changed the wax, and they knew it was too slick. The manager acknowledged it was likely that someone could be hurt. In our opinion, we quoted from Nicola v. Pacific Gas and Electric Co., 50 Cal. App. 2d 612, 123 P.2d 529 (1942):

‘If wax, or, as in the present case, both wax and soft soap, are applied to the floor, it must be in such manner as to afford reasonably safe conditions for the proprietor’s invitees, and if such compounds cannot be used on a particular type of floor material without violation of the duty to exercise ordinary care for the safety of invitees, by reason of the dangerous conditions they create, they should not be used at all. Of course slipperiness is an elastic term. From the fact that a floor is slippery it does not necessarily result that it is dangerous to walk upon. It is the degree of slipperiness that determines whether the condition is reasonably safe. This is a question of fact.’

The appellee contends that we held that if one testifies a floor is slippery, it is sufficient to sustain a verdict in such a case. We neither said that nor held that.

In Ritchey there was evidence of use of wax and soapy water on the floor, plus evidence that the floor had been buffed. There was no such evidence in this case. Douglas Needham, who had the janitorial contract for the Grille, testified that the floors were cleaned only with a wet or dry mop. No wax or coating was used on the floor. A coating that was originally put on the wood was a lacquer-type finish. In response to a question, he testified that it was possible that the floor would be a little more slick when brand new than when it was older. He also said that, while the floor may have appeared shiny, it does not mean it was slippery.

The appellant was under no duty to use a particular type of flooring, so long as the materials employed were reasonably safe for the purpose intended. See 62 Am. Jur. 2d Premises Liability, § 212; Gibson v. Consolidated Credit Corp., 110 Ga. App. 170, 138 S.E.2d 77 (1964). No evidence was presented to show the materials used here — lacquer coated wood and tile — were improper. The appellant also has the right to clean and treat his floors with proper substances, so long as it is not negligently done. J. C. Penney Co. v. Hoover, supra. Again, the appellee failed to make a case.

Reversed and dismissed.


source: Caselaw Access Project

author: John I. Purtle, Justice. Steele Hays, Justice,

license: Public Domain

text:
    The AMERICAN INSURANCE COMPANY and T.M.J. Builders, Inc. v. MOUNTAIN HOME SCHOOL DISTRICT NO. 9
    89-46
    780 S.W.2d 557
    Supreme Court of Arkansas
    Opinion delivered December 11, 1989

      Hardin & Grace, for appellant.

      H. David Blair, for appellee.
   John I. Purtle, Justice.

The Baxter County Circuit Court entered a judgment against the appellants, the American Insurance Company and T.M.J. Builders, Inc., jointly and severally, in the amount of $85,728.00, to which the court added prejudgment interest totaling $12,105.03. The court also entered a 12 percent penalty in the amount of $10,287.36, together with an attorney’s fee of $15,000.00 against appellant American Insurance Company only. Appellant T.M.J. Builders argues that: (1) the trial court erred in not transferring the case to the chancery court, and (2) the verdict was clearly against the preponderance of the evidence. We agree that the circuit court erred in not transferring the case to equity. We must, therefore, reverse and remand.

The appellee, Mountain Home School District No. 9, advertised for bids for construction of a new junior high school building. The bids were opened on September 19, 1985, in Mountain Home. Appellant T.M.J. discovered a clerical error while reviewing its bid on the evening of September 19,1985, and at that time made an unsuccessful attempt to contact its representative in Mountain Home. Chuck Kline attended the bid opening on behalf of T.M.J. Prior to the opening, Kline was informed by Jack Slate, an estimator for T.M.J., that the bid contained an error concerning the amount estimated for roofing. Slate instructed Kline to substitute a figure for the erroneous one in the sealed bid, but he was unable to do so. On the next day, T.M.J. notified the appellant’s architect of the error and stated it would be necessary either to withdraw the bid or to amend it.

On September 26, 1985, the appellee voted to accept appellant T.M.J.’s bid. At the time of acceptance, it was known that T.M.J. had claimed an error in the bid, concerning the cost of roofing. A figure of $15.00 per square, instead of the intended $ 115.00, had been quoted. The bid amount was projected for 804 squares of roofing.

Shortly after acceptance of the bid, T.M.J. informed the appellee that it would not enter into a contract to build the junior high school. Instead, it attempted to withdraw its bid unless an amendment were allowed reflecting the real price of the roofing. The appellee refused to make an adjustment and subsequently entered into a negotiated contract with another builder for the construction of the school.

On June 19,1986, the Mountain Home School District filed suit in the Baxter County Circuit Court against appellants T.M.J. Builders and American Insurance Company (as surety). The complaint sought to recover damages in the sum of $85,728.00 plus prejudgment interest, penalty, and attorney’s fees.

On July 17, 1986, T.M.J. filed its answer denying all liability, and American filed its answer on July 23, 1986, acknowledging its responsibility to pay all proper claims against the bond, but at the same time emphasizing its responsibility to T.M.J. to withhold payment until there had been an opportunity for the principal to present good faith defenses.

The parties submitted the case to the court upon a stipulation of facts on September 24,1987, with the understanding that briefs would be submitted later. The briefs were completed by November 3,1987. On November 9,1987, T.M.J. filed its motion to transfer the case to equity. The motion to transfer stated:

Defendant is seeking relief which can only be granted in equity and for which no adequate remedy exists at law, said relief being as follows: Defendant, T.M.J. BUILDERS, INC., seeks, in the alternative, the equitable relief of recision of contract on the grounds of unconscionability should the Court find that a valid contract was formed between Plaintiff and T.M.J. at the time the bids were opened.

No further action was taken in the case until September 8, 1988, when the trial court denied the motion to transfer to equity. Judgment was entered for appellee on October 21, 1988.

We first consider the argument that the trial court erred in refusing to transfer the case to the Baxter County Chancery Court.

The motion to transfer to equity, in the present case, was made ten months before judgment was entered in favor of the school district. This is not a case where the motion was just thrown in for purposes of inconveniencing the opposing party or for unnecessary delay. The trial court, after considering the motion and response, overruled the motion before entering the judgment for the appellee.

Rescission or cancellation of instruments or agreements to prevent inequitable or unjust results has long been recognized as cognizable in equity. In the early case of McCracken v. McBee, 96 Ark. 251, 131 S.W. 450 (1910), this court stated:

Cancellation of instruments is one of the well-recognized grounds of equity jurisdiction. It operates indirectly to establish or protect primary rights. It is often granted as ancillary and “preliminary to the final relief by which a party’s primary right, estate or interest is established and enforced.” It is a remedy which belongs exclusively to the equity jurisdiction, and is exercised in order to remove the obstacle which stands in the way of the enjoyment of one’s right, interest or estate. “The occasions giving rise to the jurisdiction are mistake, fraud and other instances where enforcing instruments or agreements would be inequitable or unjust.”

We had occasion to rule on an issue concerning a unilateral mistake by a bidder on a highway construction project in Arkansas State Highway Department v. Ottinger, 232 Ark. 35, 334 S.W.2d 694 (1960). The contractor noticed his unilateral mistake a few hours after the announcement was made that his bid was the lowest for the project. He went immediately to the Highway Commission and requested permission to withdraw the bid. Ottinger followed up his request to withdraw his bid by telephone communication and letter. Five days after bid opening the Commission notified Ottinger his bid had been accepted. Upon his refusal to perform the Commission awarded the contract to the second lowest bidder. Ottinger filed suit in chancery court to cancel his bid because he had quoted 43 cents per yard for excavation work rather than the intended 83 cents.

The Ottinger opinion stated:

The rule granting relief to a contractor for a unilateral mistake, in circumstances similar to what we have here, is announced by the annotator in 52 A.L.R. 2d at page 796. After reviewing a number of cases, he summarizes his findings in this language: “In the typical situation here presented, so firmly has the rule favoring equitable relief against unilateral mistake become established that no case has been discovered in which it has not been granted, by way of rescission or similar or appropriate relief, where there is proof of a combination of circumstances establishing remedial mistake and timely communication of knowledge to and assertion of the right to relief against the other party.”

The facts in Ottinger are strikingly similar to those in the present case. We see no need to distinguish between a local school district and the state highway department in matters concerning bids on public projects. The facts in this case as alleged, together with the timely motion to transfer to equity, clearly indicate that the circuit court erred in not granting the motion to transfer. Therefore, it will be unnecessary to consider other arguments for reversal.

The case is remanded to the trial court with directions to transfer the case to chancery for trial. The conditions for equitable relief are controlled by the rule stated in Ottinger:

The essential conditions to such relief by way of rescission for mistake are (1) the mistake must be of so great a consequence that to enforce the contract as actually made would be unconscionable; (2) the matter as to which the mistake was made must relate to the material feature of the contract; (3) the mistake must have occurred notwithstanding the exercise of reasonable care by the party making the mistake, and (4) it must be able to get relief by way of rescission without serious prejudice to the other party, except for loss of his bargain.

This rule should be applied by the chancery court.

Reversed and remanded.

Hickman and Hays, JJ., dissent.

Steele Hays, Justice,

dissenting. The majority proceeds to reverse this case on the assumption that the appellants, who were the defendants below, had an absolute right to divest the circuit court of jurisdiction over the appellee’s cause of action for breach of contract, merely by filing a motion to transfer to chancery court prior to a decision on the merits. I respectfully disagree. Rescission is an affirmative defense which must be pled [ARCP Rule 12(b) and 8(c)] and appellants did not plead rescission. Moreover, it is well settled that it is not error to deny a motion to transfer that is untimely. Whitten Developments, Inc. v. Agee, 256 Ark. 968, 511 S.W.2d 466 (1974); Reid v. Karoley, 232 Ark. 261, 337 S.W.2d 648 (1960); Gray v. Malone, 142 Ark. 609, 219 S.W. 742 (1920); Crawford County Bank v. Bolton, 87 Ark. 142, 112 S.W. 398 (1908); Cockrell v. Warner, 14 Ark. 345 (1853); Jamison v. May, 13 Ark. 600 (1853).

The majority ignores the absence of an affirmative pleading and declares this motion was timely because it was filed ten months before the case was decided. But the fact is, at the time the motion was filed the pleadings had been joined for sixteen months, a jury had been waived, the case had been submitted to the circuit judge upon a stipulation of facts and briefs had been submitted. Thus, this case had proceeded at law without protest from the appellants for almost a year and a half and was awaiting final decision when the motion to transfer was filed. In Whitten v. Agee, supra (dealing with a belated motion to transfer from equity to law), this court remarked:

We have also held that by failure to make a timely motion to transfer, in a case of this kind, a party waives the right unless the equity court is wholly incompetent to grant the relief sought.

More recently, in McCune v. Brown, 8 Ark. App. 51, 648 S.W.2d 811 (1983), the Court of Appeals refused to consider the merits of a motion to transfer (which the trial court had denied) filed five months after the answer:

We do not reach this issue, since we find that appellant did not timely file her motion to transfer . . . Approximately five months have transpired between the time of the original answer and the filing of the motion to transfer.

By this decision it appears no longer necessary that a motion to transfer be timely or that it be based upon a pleading asserting an equitable defense. I would affirm the judgment.

Hickman, J., joins this dissent.


author: John I. Purtle, Justice. Tom Glaze, Justice,

text:
    CITY OF FORDYCE, Arkansas, et al. v. Gary VAUGHN, et al.
    89-251
    781 S.W.2d 6
    Supreme Court of Arkansas
    Opinion delivered December 11, 1989

      Thomas L. Mays, for appellant.

      Robert, Harrell & Lindsey, P.A., by: Allen P. Roberts, for appellee.
   John I. Purtle, Justice.

This is an appeal from the chancellor’s decree voiding a rezoning ordinance by the City of Fordyce because the city failed to comply procedurally with the zoning ordinance it had adopted earlier. The city argues that the court erred in declaring the ordinance invalid. The appellees dispute the appellants’ argument for reversal, and, by way of counter-appeal insist that Alderman Marvin O’Mary should have refrained from voting because of a conflict of interest and that the action by the City Council was arbitrary and capricious. We hold that the chancellor correctly determined that the city did not substantially comply with its own ordinance regarding amendments to the zoning code.

In 1956, the City of Fordyce enacted Ordinance No. 609, which established a city planning commission. The commission was charged with establishing an overall street and property zoning plan. The ordinance provided that: “On acceptance of a plan or plans by the City Council of the City of Fordyce, they shall be and become in full force and effect binding upon all persons with the force of law.” The ordinance further provided:

Whenever a plan has been adopted by the City Planning Commission, filed for record and accepted by the City Council, the same shall not be changed, altered or amended except by the procedure required by said Act 108 of 1929 as amended by said Act 295 of 1937 for the adoption of a plan as specified above.
Whenever a plan or plans have been so adopted, filed and become effective, no new street, square, park or other public way, ground or open space or any public building or structure or public utility, whether publicly or privately owned, shall be constructed or authorized to be constructed in any section or district of the planning jurisdiction embraced within a plan or plans until the location, character, and extent thereof shall have been submitted to the City Planning Commission in the manner prescribed in said Act 108 of 1929, as amended by said Act 295 of 1937.
In 1957, the City of Fordyce enacted Ordinance No. 624, which regulated amendments to the zoning ordinance. Chapter 6 of Ordinance No. 624 concerned initiation of changes to the zoning plan. It provided that the City Council, the Planning Commission, or one or more individuals owning property in the area affected, could initiate changes to the zoning regulations and maps. However, the procedure for handling the amendments to the zoning ordinance is stated in Section 2 of Chapter 6 as follows: “The Planning Commission shall set hearing [s] on all proposed changes to the Zoning Map. . . .” The ordinance also provides that the Planning Commission will notify all persons within affected areas of the “time and place of the public hearing on the proposed change.” Section 2(e) states:
No application for a change of the Zoning Ordinance may be resubmitted within 12 months from the date of action by the City Council unless the Planning Commission finds that a substantial change in conditions has occurred.

The facts reveal that Dennis Bailey purchased land from the Fordyce Public School District which had formerly been used as a school site. When he purchased the property, he knew that it was zoned residential, R-l. He understood that he would have to get the property rezoned in order to use it for a planned convenience store. The use he intended required commercial zoning, C-l.

Bailey initiated the proposed zoning amendment to the Planning Commission in June 1987. The Commission recommended to the City Council on July 9, 1987, that the zoning request be denied. Nevertheless, on November 16,1987, the City Council rezoned the property from R-1 to C-1 through enactment of Ordinance No. 879. On December 8, 1987, the City Council repealed Ordinance No. 879 by enactment of Ordinance No. 880, which reestablished the zoning of the property as R-l. On February 9,1988, the City Council enacted Ordinance No. 881, which rezoned the property in question as C-l.

The appellees filed suit on February 29, 1988, challenging the validity of Ordinance No. 881. On August 1, 1988, the chancellor entered a decree holding Ordinance No. 881 to be null and void. The court, moreover, enjoined enforcement of Ordinance No. 881 and declared the property to be zoned R-l.

The city enacted Ordinances No. 609 and No. 624 pursuant to the provisions of Ark. Code Ann. § 14-56-420 and § 14-56-422 (1987). The former section provides:

Any of the recommended ordinances and regulations that may be prepared by the commission shall be adopted or amended only in conformance with procedures specified in § 14-56-422.

The latter section provides, in pertinent part:

All plans, recommended ordinances, and regulations shall be adopted through the following procedure:
(1) (A) The planning commission shall hold a public hearing on the plans, ordinances, and regulations proposed under this subchapter.
(B) Notice of public hearing shall be published in a newspaper of general circulation in the city, at least one (1) time fifteen (15) days prior to the hearing.
(2) Following the public hearing, proposed plans may be adopted and proposed ordinances and regulations may be recommended as presented, or in modified form, by a majority vote of the entire commission.
(3) Following its adoption of plans and recommendation of ordinances and regulations, the commission shall certify adopted plans or recommended ordinances and regulations to the legislative body of the city for its adoption.

The appellants rely primarily upon the case of Mings v. City of Fort Smith, 288 Ark. 42, 701 S.W.2d 705 (1986). The Mings case involved a proposal by a hospital to rezone property from R-2 (residential) to T-l (transitional). The change was granted, conditioned on the hospital maintaining a buffer zone between the residential and transitional property. A dispute over the use of the property arose when the hospital developed a nine-car parking lot in the area set aside as a buffer zone. Although the mini-parking lot did not violate the R-2 zoning ordinance, the hospital had agreed not to construct it. After objections were raised, the hospital shut the lot down and sought permission, through the Planning Commission, to reopen the lot. The Planning Commission denied the request. No appeal was had at the time, but subsequently the parking lot question appeared on the agenda for the Fort Smith Board of Directors, which resubmitted the matter to the Commission for reconsideration. The Planning Commission sent out notices, established a hearing date, and generally followed the procedures set out for initiating changes in the zoning plan. Although the Planning Commission again denied the request for the parking lot, the Board of Directors overrode or ignored the recommendation and permitted use of the parking lot. Factually and procedurally, the Mings case is clearly distinguishable from the present case.

After the City of Fordyce repealed the first ordinance rezoning the property, there was nothing left for the City Council to do concerning this particular matter. The property had been restored to its original R-l zoning. The net effect of Ordinance No. 880 was to nullify Ordinance No. 879. In the words of the state law, the ordinance had been recalled. The zoning request was not again referred to the Planning Commission before the enactment of Ordinance No. 881 some two months later. Although the city was granted the right in its zoning ordinance to initiate hearings or changes, it was not empowered to make zoning changes without first having the Planning Commission consider the request. Ordinance No. 624 expressly states: “The Planning Commission shall set hearings on all proposed changes to the zoning map . . . .” [Emphasis added.]

The Mings case relied upon Potocki v. City of Fort Smith, 279 Ark. 19, 648 S.W.2d 462 (1983), and Taggart and Taggart Seed Co. v. City of Augusta, in Ark. 570, 647 S.W.2d 458 (1983). The Mings opinion alluded to Taggart in the following terms: “[W]e struck down a city’s attempt to bypass completely its planning commission in the face of its ordinance requiring that zoning matters be presented first to the planning commission and then to the board. There, again, was a flagrant abuse and no hint of substantial compliance.”

The Mings opinion also relied upon Potocki, noting that: “In that case the city flagrantly ignored its own requirement that zoning petitions not be resubmitted until one year after denial. In contrast, we find no mandate in this case [Mings] saying the board may not suggest reconsideration by the planning commission.” In Potocki we held that there was no substantial compliance with the germane ordinance.

It is fundamental that cities do not have inherent authority to enact legislation. Such authority is dependent upon the authority granted by the Constitution and the General Assembly. City of Little Rock v. Raines, 241 Ark. 1071, 411 S.W.2d 486 (1967). The cities have been granted the authority by the General Assembly to establish zoning commissions and to provide for amendments to zoning ordinances. The City of Fordyce took advantage of that grant of power through its enactment of Ordinances No. 609 and No. 624. The ordinances do not provide for the city government to change an ordinance without a public hearing called by the Planning Commission. The same situation existed in Taggart, where we stated:

The ordinance adopted does not provide for the alternative method of amendment of boundaries, but, instead, provides for amendment only through the complete planning procedure. That choice of procedures does not conflict with the enabling statute for it simply continues to authorize the more extensive planning procedure.

The facts in the Potocki case were quite similar to those in the case now before us. The question in Potocki was whether the Board of Directors could rezone lots within a year from the time of the rejection of the first petition for rezoning of the same two lots. We upheld the chancellor’s decision that rezoning could not be considered within a year following rejection, stating:

Cities possess only the powers granted to them. They have no inherent powers and must act only with powers delegated by the Arkansas Constitution or statutes. City of Little Rock v. Raines, 241 Ark. 1071, 411 S.W.2d 486 (1967). Zoning powers exercised by the city of Fort Smith during the proceedings involved herein are derived from Act 186 of 1957, codified in Ark. Stat. Ann. §§ 19-2825 et seq. (Repl. 1980). Act 186 of 1957 requires the planning commission to review a petition for rezoning prior to the legislative body of the city considering the matter. Ark. Stat. Ann. § 19-2827(f) states in part:
After adoption and filing as hereinafter provided, of a plan or plans, no public way, ground, or open space . . . shall be acquired, constructed, or authorized, unless such a project, proposal or development has been submitted to the planning commission for review, recommendation and approval as to its conformity with the plan or plans ....

Nothing required the City of Fordyce to create a planning commission or to delegate authority to it as was done in Ordinance No. 624. However, having chosen to do so, the city must abide by its own decisions until such time as the ordinance is legally altered or repealed in accordance with the law. We have many times held that a city’s failure to substantially comply with the procedural requirements of enabling legislation rendered a subsequent ordinance invalid. See Potocki, Taggart, and Mings. See also City of Searcy v. Roberson, 224 Ark. 344, 273 S.W.2d 26 (1954). As we stated in Potocki: “A city simply cannot pass procedural ordinances they expect to be followed by their residents and then conveniently ignore them themselves. A legislative body must substantially comply with its own procedural policies.” See Maxwell v. Southside School Dist., 273 Ark. 89, 618 S.W.2d 148 (1981).

We take note of the appellants’ argument that this rezoning proposal was continuously before the City Council from July 1987 until enactment of Ordinance No. 881 in February 1988. The record does not reveal that the subject was carried over from 1987 until the council acted upon it in 1988. Although the city had the right to initiate zoning changes, it did not have the right to rezone the property until the Planning Commission acted upon it. The appellant argues that the subject of Ordinance No. 881 was previously considered by the Commission. It would require conjecture and speculation to hold that this matter was continuously before the board from July 1987 until February 1988. Ordinance No. 880 put an end to the request for rezoning by the landowner. Any subsequent action by the city government must be in compliance with the procedures established by Ordinance No. 624 and the state laws.

There was no substantial compliance with its own zoning ordinance by the City of Fordyce in the enactment of Ordinance No. 881. Therefore, the chancellor’s ruling was correct. However, the court does not have the authority to rezone the property. City of Conway v. Conway Housing Authority, 266 Ark. 404, 584 S.W.2d 10 (1979).

We do not reach the appellee’s counterclaim concerning the arbitrariness of the ordinance. Neither do we reach the argument that Alderman Marvin O’Mary had a financial conflict of interest and should have refrained from voting on the ordinance. While there may be merit in the argument, it was not considered by the trial court. Further, it is not likely to arise again if the ordinance is reconsidered.

Affirmed.

Dudley and Glaze, JJ., concur.

Tom Glaze, Justice,

concurring. While I concur with its conclusion, I believe the majority opinion’s logic is flawed. The following chronology of events is important:

June 15, 1987 Landowner, Bailey, applied to rezone his property from Residential 1 to Commercial 1.
July 9, 1987 Fordyce Zoning and Planning Commission denied Bailey’s application.
November 16, 1987 Fordyce City Council overturned its Planning Commission’s decision by passing Ordinance No. 879, which rezoned the Bailey property to Commercial 1.
December 8, 1987 — Fordyce City Council changed its prior decision by passing Ordinance No. 880, which repealed Ordinance No. 879. If effective, this council action would revert property to Residential 1.
February 9, 1988 — Fordyce City Council again changed its collective mind by passing Ordinance No. 881, which rezoned the Bailey property to Commercial 1.

The majority court holds that, because the City Council failed to refer the Bailey zoning matter back to the Planning and Zoning Commission before passing Ordinance No. 881 on February 9, the council had not substantially complied with its own zoning code; thus, its passage of Ordinance No. 881 was vitiated. If the majority is correct, the City Council action in enacting Ordinance No. 880 is likewise invalid, since the Council also failed to return this same matter to the Planning and Zoning Commission before Ordinance No. 880’s passage. Conversely, if the Council enactment of Ordinance No. 880 was valid without the Council having returned the Bailey zoning matter to the Commission for its reconsideration, the Council’s enactment of Ordinance No. 881 under the same circumstances must also be valid. That being so, the Council’s action on December 8, 1987, and February 9, 1988, would both be either valid or invalid, depending on this court’s construction of the relevant Municipal Planning Laws (Ark. Code Ann. §§ 14-56-401 to -425 (1987)) and Fordyce’s own zoning code ordinances.

My view is that the City Council had ample authority to take the action it did when passing both Ordinance 880 and 881. Among other things, § 14-56-422, which provides for the adoption of plans, ordinances and regulations regarding zoning matters, provides in relevant part as follows:

(4) The legislative body of the city may return the plans and recommended ordinances and regulations to the commission for further study or recertification or, by a majority vote of the entire membership, may, by ordinance or resolution, adopt the plans and recommended ordinances or regulations submitted by the commission. However, nothing in this subchapter shall be construed to limit the city council’s authority to recall the ordinances and resolutions by a vote of a majority of the council. (Emphasis added.)

Clearly, § 14-56-422(4) authorized the Fordyce City Council to reconsider its earlier ordinances and actions pertaining to the Bailey zoning matter. While Fordyce’s own planning ordinance, Ordinance No. 624, provides “no application for a change of the zoning ordinance may be resubmitted within 12 months [from the Council’s denial]. . . ,” such limitation pertains to the applicant’s action, not that of the Council’s. This is as it should be. A city council should not be bound only to one consideration or vote on a controversial zoning proposal. If the council decides later that it made an error, it should not be required to return the matter to its Planning and Zoning Commission before being able to correct the council’s mistake. By the same token, an applicant should not be in a position to force the council to continue to reconsider his or her zoning application if the council determines any such reconsideration would be a waste of time; thus, the one-year limitation upon the applicant’s right to such a reconsideration. In this way, § 14-56-422(4) is in harmony with the city’s one-year limitation ordinance provision.

I should add that this case is unlike the cases cited by the majority, Potocki v. City of Ft. Smith, 279 Ark. 19, 648 S.W.2d 462 (1983) and Taggart and Taggart Seed Co. v. City of Augusta, 278 Ark. 570, 647 S.W.2d 458 (1983). In Taggart, Augusta’s City Council ignored its planning commission and zoning code ordinance altogether, by passing a zoning ordinance without the zoning request ever having been considered by Augusta’s Commission. The Potocki case involved an applicant-landowner’s second application to Ft. Smith’s Planning Commission within one year of the city and board’s action rejecting the applicant’s first application. This court held the applicant’s second petition was premature since it violated the city’s zoning code ordinance, which limited an applicant’s resubmission until at least one year after the board’s denial of his first application.

While I disagree with the majority court’s reasoning on this point, I would still affirm the chancellor’s decision. The chancellor concluded, correctly I believe, that one of the councilmen, Mr. Marvin O’Mary, had a conflict of interest when voting on Ordinance No. 881. Mr. O’Mary is a public accountant, and Mr. Bailey, the applicant in this case, was a client of O’Mary’s when Bailey’s zoning request came before the council. O’Mary candidly conceded that had he taken a position contrary to Bailey’s request, O’Mary would not have received $6,500 a year from Bailey. Unquestionably, O’Mary had an economic stake in rezoning Bailey’s property at the time he cast his vote in Bailey’s favor. He also testified he gave no weight to the Commission’s decision denying Bailey’s request. Had O’Mary not voted, Bailey’s application would have received two votes with three council members voting against rezoning. Because O’Mary’s vote caused a tie vote (3-3), the mayor was called upon to cast the deciding vote, which he cast in favor of the rezoning requested by Bailey.

Arkansas prohibits council members from being directly, or indirectly, interested in the profits of any contract for the furnishing of supplies, equipment, or services to the municipality unless the governing body of the city shall have enacted an ordinance permitting the members to do so and prescribing the extent of this authority. See Ark. Code Ann. § 14-42-107(b)(1) (1987). Although § 14-42-107(b)(1) is not exactly on point, this court, in considering that provision in Price v. Edmonds, 232 Ark. 381, 337 S.W.2d 658 (1960), recognized as still viable the common law rule which prohibits municipal officers from self-dealing in regard to the sale of materials as well as in contracts or jobs for work or services. The general rule relating to personal interests retained by a voting council member as set out in 56 Am. Jur. 2d Municipal Corporations § 142 (1971) is as follows:

It is thoroughly established that a member of a municipal council who has a direct personal interest in a matter coming before the council is not eligible to vote thereon. Some jurisdictions have adopted the view that the fact that a member is disqualified by interest does not necessarily invalidate the action of the council if his vote is not necessary to a majority. On the other hand, it has been held that if his vote is determinative in favor of action in his interest, such action is void.

Here, O’Mary’s vote was dispositive of the rezoning request made by Bailey, and I would hold O’Mary’s action was void. As previously discussed, the chancellor held Ordinance No. 881 invalid because the Council did not first return the rezoning matter to the City’s Commission. While the chancellor was wrong in his reasoning, I would affirm his decision in this de novo review on the basis Ordinance No. 881 failed to receive the necessary majority vote, since O’Mary’s vote was invalid.

For the above reasons, I would affirm.

Dudley, J., joins this concurrence.


author: John I. Purtle, Justice.

text:
    Earlie James JONES v. STATE of Arkansas
    CR 89-103
    780 S.W.2d 556
    Supreme Court of Arkansas
    Opinion delivered December 11, 1989

      James P. Massie, for appellant.

      Steve Clark, Att’y Gen., by; 01 an W. Reeves, Asst. Att’y Gen., for appellee.
   John I. Purtle, Justice.

The appellant was found guilty of the crime of rape and was sentenced to 35 years in the Arkansas Department of Correction. For reversal, he argues that the trial court erred in holding that the child witness, who was also the victim, was competent to testify and that the evidence was insufficient to sustain a conviction. Neither argument is persuasive, and the judgment of the trial court is accordingly affirmed.

The appellant was 17 years old at the time of the rape, while the victim was 9 years of age. The victim clearly identified the appellant and testified that he raped her. Such testimony standing alone is sufficient to sustain a conviction if the witness is competent. Sales v. State, 291 Ark. 338, 724 S.W.2d 469 (1987).

We have held that so long as the record reveals evidence and testimony upon which the trial judge could find that the witness was aware of a moral obligation to tell the truth and had the ability to observe and remember as well as to relate the facts, we will not hold that there has been a manifest abuse of discretion. Clifton v. State, 289 Ark. 63, 709 S.W.2d 63 (1986).

In the present case, the trial court found the child competent to testify on the basis of her demeanor and the following responses given at an omnibus hearing: The victim knew the names of her teachers and the school she attended; she went to church and learned about the truth in Sunday School; she stated that she would get a spanking if she did not tell the truth and that she was always caught when she lied; although she did not know what the judge would do, she did not think he would give her a spanking; she admitted that she did not know what would happen if she told a lie in court, but she knew that she was supposed to tell the truth, and she promised to tell the truth.

Certainly, the child’s answers to the questions in this case were clearer and more detailed than those in Jackson v. State, 290 Ark. 375, 720 S.W.2d 282 (1986), where we upheld the trial court’s decision allowing the child witness to testify. The standard test applied in such cases was stated in Jackson-, the guidelines for determining the competency of a witness entail the following considerations:

[t]he ability to understand the obligation of an oath and to comprehend the obligation imposed by it; an understanding of the consequences of false swearing; and the ability to receive accurate impressions and to retain them, to the extent that the capacity exists to transmit to the fact finder a reasonable statement of what was seen, felt or heard.

290 Ark. at 379, 720 S.W.2d at 284. Although there were many substantiating factors presented here in evidence, it is not necessary to enumerate them because the word of the victim alone is sufficient to sustain the conviction. Sales, supra.

Affirmed.


author: Robert H. Dudley, Justice.

text:
    Deborah BROWN v. Monica Diane CONWAY
    89-215
    781 S.W.2d 12
    Supreme Court of Arkansas
    Opinion delivered December 11, 1989

      Dabbs, Dabbs & Graham, by: Jeffrey M. Graham, for appellant,

      Wright, Lindsey & Jennings, for appellee.
   Robert H. Dudley, Justice.

The appellant, Deborah Brown, and the appellee, Monica Conway, were involved in a fracas at their place of work. During the melee the appellee bit the appellant’s forehead causing the loss of part of her forehead and left eyebrow. Appellant filed a civil suit against the appellee for assault and battery. The jury returned a verdict for the appellee. We reverse and remand for a new trial because of an erroneous evidentiary ruling.

At trial, appellant’s evidence tended to show that she was the victim of an unprovoked attack by appellee. On the other hand, the appellee called witnesses in an effort to show that she had acted only in self-defense. Appellee called Tony Clark who testified over appellant’s objection that on another occasion, unknown to appellee, appellant had gotten mad at Clark and loudly cursed him in a crowded restaurant. The ruling allowing the testimony was in error and was prejudicial.

This evidence of the character trait of aggressiveness was offered as circumstantial evidence to show that appellant was likely to have been the aggressor in the affray. A.R.E. Rule 404 deals with the basic question of whether evidence of character or traits of character should be admitted. Subdivision (a) of the rule is as follows:

Rule 404. Character evidence not admissible to prove conduct, exceptions — Other crimes. — (a) Character Evidence Generally. Evidence of a person’s character or a trait of his character is not admissible for the purpose of proving that he acted in conformity therewith on a particular occasion, except:
(1) Character of accused. Evidence of a pertinent trait of his character offered by an accused, or by the prosecution to rebut the same;
(2) Character of victim. Evidence of a pertinent trait of character of the victim of the crime offered by an accused, or by the prosecution to rebut the same, or evidence of a character trait of peacefulness of the victim offered by the prosecution in a homicide case to rebut evidence that the victim was the first aggressor.

The subsection means that, in civil cases, the general rule is that neither party may offer evidence that the other had a trait of character which made it likely that he acted in conformity therewith on the occasion which gave rise to the lawsuit. The exceptions to the general rule which are set out in (1) and (2) above are not applicable to civil cases. Use of the words “accused” and “prosecution” means that these two exceptions should be applied only in criminal cases. Weinstein & Berger, Weinstein’s Evidence, 404-22 (1988). This is true even if the conduct in the civil case could constitute a crime, as in the case at bar. Weinstein, supra, 404-25. Thus, the trial court erred in admitting the evidence showing a character trait in this civil case.

The general rule does not prohibit the introduction of evidence of character or traits of character in a civil case where (1) trait of character is in issue, for example, the competency of a driver in an action for negligently entrusting a motor vehicle to an incompetent driver, see McClellan v. State, 264 Ark. 233, 570 S.W.2d 278 (1978), or (2) the evidence is being offered to reflect upon the credibility of the witness, that is, showing the witness’s character for veracity under Rules 608 and 609, or (3) proving something other than that the defendant acted in conformity with his character. See Weinstein, supra, 404-22. Further, it does not prevent a plaintiff in a civil assault action from showing in rebuttal that the defendant had a trait of violence in cases where the defendant first put his own traits of character in evidence by testifying to his peacefulness. Pursley v. Price, 283 Ark. 33, 670 S.W.2d 448 (1984).

Reversed and remanded.


author: Steele Hays, Justice. John I. Purtle, Justice, David Newbern, Justice,

text:
    Alton CAMPBELL v. STATE of Arkansas
    89-25
    781 S.W.2d 14
    Supreme Court of Arkansas
    Opinion delivered December 11, 1989
    [Rehearing denied January 29, 1990.]

      Martin Law Firm, by: Thomas A. Martin, for appellant.

      Steve Clark, Att’y Gen., by: Theodore Holder, Asst. Att’y Gen., for appellee.
   Steele Hays, Justice.

Alton Campbell appeals from an order of the circuit court removing him from the office of county Judge of Newton County. He contends the court erred by giving him insufficient notice of a final hearing and by ordering his removal on the basis of a federal court conviction before the decision became final. While this appeal was pending the issues have become moot.

Campbell was convicted in a United States district court on two counts of vote buying. He was sentenced to imprisonment for a term of three years and fined $5,000. The United States Court of Appeals for the Eighth Circuit stayed execution of Campbell’s sentence pending appeal. During the course of the appeal the prosecutor for Newton County filed a petition to remove Campbell from the office of county judge, citing as authority, Ark. Const. art. 3, § 6, and art. 5, § 9, as well as Ark. Stat. Ann. §§ 12-2102, 43-2318, and 34-2201 through 2209. The cited statutes are now codified as Ark Code Ann. §§ 21-12-302, 16-90-112(b), and 16-118-105 (1987).

The circuit court held a hearing and entered an order on August 5, 1987, finding the action was premature and that it would be held in abeyance “until rendering of a final judgment by the Eighth Circuit Court of Appeals or other courts of proper jurisdiction.” Thereafter, the United States Court of Appeals affirmed the conviction, denied rehearing, and its mandate was received by the United States District Court on July 22, 1988.

On July 27,1988, Campbell was notified to attend a hearing in the Newton County Circuit Court the following day. On October 5,1988, that court entered its order declaring Campbell ineligible to hold public office.

On November 28, 1988, the United States Supreme Court denied Campbell’s petition for certiorari. United States v. Campbell, _U.S--, 109 S. Ct. 490, 102 L.Ed.2d 527 (1988). Moreover, the records of the Arkansas Secretary of State, of which we take judicial notice, Norris v. State, 262 Ark. 188, 555 S.W.2d 560 (1977), show that Clinton Daniels was commissioned to serve as County Judge of Newton County, Arkansas, for the period, January 1, 1989, to December 31, 1990. The state’s brief notes that this commission was the result of an election in which Campbell ran for the office of county judge and was defeated. That statement is not contested in Campbell’s reply brief.

We have said we do not ordinarily decide issues which are moot. However, when the case involves the public interest, or tends to become moot before litigation can run its course, or a decision might avert future litigation, we have, with some regularity, refused to permit mootness to become the determinant. See Cummings v. Washington County Election Commission, 291 Ark. 354, 724 S.W.2d 489 (1987); Robinson v. Shock, 282 Ark. 262, 667 S.W.2d 956 (1984); Arkansas Television Co. v. Tedder, 281 Ark. 152, 669 S.W.2d 174 (1983); Shiras v. Britt, 267 Ark. 97, 589 S.W.2d 18 (1979); Anderson v. State, 266 Ark. 192, 583 S.W.2d 14 (1979); Robinson v. Arkansas Game & Fish Commission, 263 Ark. 462, 565 S.W.2d 433 (1978); Commercial Printing Co. v. Lee, 262 Ark. 87, 553 S.W.2d 270 (1977); Dotson v. Ritchie, 211 Ark. 789, 202 S.W.2d 603 (1947). In Dotson, Justice Frank G. Smith wrote on behalf of the majority.

This case is somewhat similar to the recent case of Carroll v. Schneider, ante, p. 538, 201 S.W.2d 221, in that we are deciding a question which has become moot. In that case it was said: ‘It is urged, however, that the case is now moot, and should be dismissed for that reason. It is moot in the sense that we cannot now afford appellant petitioner any relief, but is not moot in the sense that it is important to decide a practical question of great public interest, which may arise in any future election.’ For the reason stated we there decided the question presented, although the case was moot, and for the same reason we now decide the question here involved.

See also, Nebraska Press Association v. Stuart, Judge, 477 U.S. 539 (1976); Roe v. Wade, 410 U.S. 113 (1972).

Here, the trial court determined that appellant had been convicted of a felony and was disqualified from holding public office in Arkansas. That ruling has not been shown to be erroneous. Dale v. Sutton, 273 Ark. 396, 620 S.W.2d 293 (1981); Poindexter v. Cole, 239 Ark. 471, 389 S.W.2d 839 (1965).

We find no merit in Campbell’s argument that he was denied due process in that he had less than twenty-four hours notice to appear before the Newton County Circuit Court prior to the order of removal. Although there was objection to the adequacy of the notice, when the trial court made direct inquiry as to whether the defense was prepared to proceed, counsel spurned any claim of inadequate preparation. We are not persuaded that the timing resulted in a denial of due process.

Article 5, § 9 provides that no person “hereafter convicted” of an infamous crime shall be capable of holding “any office of trust or profit in this state.” Since our precedents constrain us to interpret language of the constitution according to its plain and common meaning, Gipson v. Manor, 225 Ark. 975, 287 S.W.2d 467 (1956); Morley v. Remmel, 215 Ark. 434, 221 S.W.2d 51 (1949), we deem it necessary to determine in what sense the framers of the Arkansas Constitution used the word “convicted” in this article.

Appellant relies on May v. Edwards, 258 Ark. 871, 529 S.W.2d 647 (1975), for the premise that a judgment of conviction must not be subject to reversal. But a number of factors distinguish this case from May. For one thing, May was challenging his removal from office, not by a court of law, but by the North Little Rock City Council, and this court noted that art. 5, § 9 was not self-executing and no enabling legislation existed. Too, in May the trial court had sustained a demurrer by summarily dismissing May’s complaint against Edwards for usurpation of office. Since the complaint alleged that May’s conviction had been reversed and the charges dismissed, this court was required to treat those allegations as true and, hence, a reversal was mandated.

Nor do we think the cases cited in May bind us to the position that one is “convicted” only when all avenues of recourse to the courts have been exhausted. The cited cases contain extenuating considerations. In Owens v. State, 86 Ark. 317, 111 S.W. 466 (1908), the trial court permitted a witness to testify over the appellant’s objection that the witness had been convicted of grand larceny some years previously. This court rejected the argument, noting that the judgment itself, entered on a plea of guilty, recited that the sentence “be withheld herein during good behavior of the defendant.” In Huddleston v. Craighead County, 128 Ark. 287, 194 S. W. 17(1917), the prosecuting attorney was suing to recover his statutory fee for obtaining a felony conviction. Under applicable statutes the fee was payable “upon conviction,” but the same statutes twice made reference to “such convict.” Laying particular emphasis on the word “convict,” the court held that the language of the statutes raised a doubt that any fee was payable before a final judgment was entered. In Tucker v. State, 248 Ark. 979, 455 S.W.2d 888 (1970), the appellant appealed from the denial of a new trial on his conviction of four counts of grand larceny. His contentions were based in part on the allegation that one of the jurors which found him guilty had been convicted of burglary and grand larceny some fourteen years earlier. Noting that the juror was not a “convicted felon” because the circuit court had suspended the sentence, we rejected the contention. In Southerland v. Arkansas Department of Insurance, 250 Ark. 903, 467 S.W.2d 724 (1971), this court interpreted the wording of an Arkansas statute providing that the license of an insurance agent was subject to revocation upon “conviction by final judgment of a felony involving moral turpitude.” This court sustained Southerland’s argument that although he had been convicted of embezzlement in California, because he had appealed, the judgment was not “final.”

This court in May also relied on State Medical Board v. Rodgers, 190 Ark. 266, 79 S.W.2d 83 (1935), which we consider an aberration. The appellee, a practicing physician, was convicted in federal court of possession of counterfeit money and sentenced to three years imprisonment. The judgment on the sentence gave Dr. Rodgers two weeks in which to close his practice and prepare for imprisonment. That two weeks was then extended by four months and on the final day of the extension an order was entered placing the defendant on probation for a term of five years. The State Medical Board revoked Dr. Rodgers’ license to practice medicine in Arkansas based upon his conviction of a crime involving moral turpitude as provided by its regulation. Rodgers appealed to the Pulaski County Circuit Court and the order of revocation was vacated. On appeal, this court affirmed, Justice Frank G. Smith dissenting. We think the holding of this court in Rodgers cannot be reconciled with the law or with reason. Dr. Rodgers was undeniably guilty of a crime involving moral turpitude and was convicted and sentenced. On that basis his license to practice medicine was subject to forfeiture and the fact that the sentencing court, for reasons that are not apparent, recoiled from ordering execution of the sentence originally imposed, lessens neither the crime nor the conviction. We overrule the decision without hesitation.

We do not regard the foregoing cases as governing the outcome of the case now before us. If our constitution, for example, used the language “convicted by a final judgment,” as in the Southerland case, or contained the word “convict” so as to suggest that actual incarceration was contemplated, as in Huddleston, or if the judgment failed to actually impose a sentence, as occurred in the Owens case, a different situation would be presented and a different result might be required. But those factors are not present, and there is no hint the framers meant conviction by a judgment which was in no sense subject to review.

Turning to other cases which interpret the use of the words “convicted” or “conviction,” it is apparent that the more nearly the dates of the decisions coincide with the date of the constitution, the stronger the inference that by contemporary usage one was “convicted” of a crime when the trial was concluded and the judgment entered. “Conviction is the finding of a person guilty of an offense.” Hempstead County v. McCollum, 58 Ark. 149, 24 S.W. 9 (1893). “Conviction is defined as that legal proceeding of record which ascertains the guilt of the party, and upon which the judgment or sentence is founded.” Fanning v. State, 47 Ark. 442, 2 S.W. 70 (1886). “Conviction means after the verdict of the jury.” United States v. Hudson, 65 F. 68 (W.D. of Ark. 1894). More recently, in Barnes v. Cooper, 204 Ark. 118, 161 S.W.2d 8 (1942), a unanimous court interpreted the word “convicted” (as used in Pope’s Digest § 4397, disqualifying one who has been convicted of murder of benefitting from the estate of the victim) as follows: “We are of the opinion that the word ‘convicted,’ as used in the statute, means convicted and sentenced in a court of competent jurisdiction, the circuit court of the proper county.”

Decisions from elsewhere are in accord: “In common parlance a person has been ‘convicted’ when he has been found guilty by court or jury.” Martin v. Delaware, 116 A.2d 685 (Del. 1955). In Egan v. Jones, 32 P. 929 (Nev. 1893), the Supreme Court of Nevada considered the word “convicted”:

Under our system of government, and the statute of this state and the constitutional provision referred to, “convicted” means when a person has been indicted by a grand jury, tried by a court and jury, and found guilty of the offense charged in the indictment; and it was the intention of the framers of the constitution that no person should be ousted from an office, when charged with the crime of bribery, until after such trial and conviction upon a verdict of guilty.

In Martin v. State, 234 P. 795 (Okla. Crim. App. 1925), the court stated that “the term ‘conviction’ in art. 6, § 10 of the Constitution, relating to pardons and paroles, denotes the final judgment of the trial court upon a plea of or verdict of guilty.”

Several of the cases cited in May v. Edwards, supra, subscribe to the same usage of the word “conviction”: See Attorney General v. Montgomery, 275 Mich. 504, 267 N.W. 550, 554 (1936); State v. Levi, 153 S.E. 587 (W.Va. 1930); State v. Jurgensen, 280 N.W. 886 (Neb. 1938):

After verdict of guilty and sentence by trial court, the presumption of innocence ceases, and the law then presumes that the proceedings were regular and conviction just.

In McKannay v. Horton, 91 P. 598 (Cal. 1907), the court held that the right to hold public office was forfeited upon conviction of a felony, even though the judgment had been appealed. The court noted that the pendency of the appeal does not affect the presumption of guilt, which arises immediately upon the rendition of the verdict:

It is said — arguendo — that an appeal to the Supreme Court operates a suspension of the judgment of the lower court for all purposes. This, as every lawyer knows, is not true. If, in a civil cause, the appellant does not file upon the judgment, execution will issue, notwithstanding the pendency of the appeal, and may be levied upon the property of the judgment debtor, and the property may be sold, and an indefeasible title vested in the purchaser at the execution sale, notwithstanding the result of the appeal may be a complete and final reversal of the judgment of the trial court; and, as in civil cases, so in criminal cases, a judgment not final may be proved for every purpose for which it is effectual. It may be proved for the purpose of showing a vacancy in office, just as in a civil case it may be proved to justify the levy of an execution, or to establish the title of the purchaser at the execution sale; and this, even after it has been reversed on appeal.

In conclusion, we interpret art. 5, § 9 to mean that a public official becomes subject to removal when convicted by a plea of guilty or a verdict of guilty in circuit court of a crime defined by the article. Anything less, we believe, effectively nullifies the provision. We recognize the potential for harm to which this interpretation gives sufferance. However, the risk of harm to an individual must be balanced against the alternative— the loss of public confidence in those who govern which inevitably accompanies the spectacle of officeholders who have been found guilty of an offense which disqualifies them for public trust, yet continue to hold the office by resorting to the endless delays to which the criminal justice system is now susceptible.

Affirmed.

Purtle, J., Newbern, J., and Glaze, J., dissenting.

John I. Purtle, Justice,

dissenting. The majority has again decided to dabble in some social legislation formerly considered prohibited by the separation of powers provisions of the federal and state constitutions. Moreover, the majority opinion ignores this court’s precedent and establishes the law on this subject arbitrarily and without deliberation from a detached and neutral position. The majority opinion appears, however, to recognize the portents of possible future injustice in its candid admission: “We recognize the potential for harm to which this interpretation gives sufferance.” It appears that the opinion has become the vehicle by which the majority vents its frustration with the criminal justice system in general.

My greatest fear concerning its opinion is that it will serve as an invitation for disgruntled politicians and well-meaning citizens to proceed with haste to obtain the conviction of their opponents and unpopular officials. The election process is the proper and natural means of redress in such cases. On the other hand, the criminal justice system is the proper and necessary vehicle for bringing corrupt office-holders to the bar of justice. By these statements I do not mean to imply that a duly-convicted felon should not be removed from office.

In my opinion, we have not been granted any greater degree of knowledge or wisdom than our predecessors on this court who have ruled on this issue. I am not prepared to say that there is no basis for the earlier opinions of the Arkansas Supreme Court holding that a “conviction” used to oust a public official must be a “final” one. To read these opinions in any other way would, at least partially, deny the right of appeal to the person removed from office. I am not aware of large numbers of elected public officials presently serving in positions of trust while appealing felony convictions. The appellant is the only example that comes to mind.

This is not a judicial question — it is, rather, a legislative one. It certainly does not involve rules of procedure or other matters normally subject to the powers of the judiciary. Even if the correction of what we perceive to be a social ill were within our power, we should proceed, as we have failed to do in the present case, with greater deliberation.

Henceforth, timely notice of intention to remove a public official from office will apparently not be required, nor, evidently, will due process. The appellant was given less than 24 hours notice of the hearing to remove him from office. In such circumstances, why not allow the trial judge, or a municipal judge, or even a lawyer pulled off the street to immediately remove an officer who has been found guilty? This expeditious procedure would have the advantage of avoiding another hearing. Better still, why don’t we proclaim a law providing that, upon conviction, the official shall automatically be removed from office? If that proves too cumbersome, we could decree that any public official arrested and charged with a felony shall at once be removed from office. After all, anyone who finds himself charged must surely be guilty.

A reasonable interpretation of Article 5, Section 9, of the Arkansas Constitution gives the word “final” the meaning our predecessors have given it on many occasions. It would certainly be in keeping with the spirit of the law to interpret final judgment to mean exhaustion of the process of direct appeal — that is, when the appellate court affirms the conviction. Post-judgment motions and appeals would be rendered meaningless if we attach a literal construction to the word “conviction.”

David Newbern, Justice,

dissenting. As the majority opinion points out, the trial court declined to consider removing Campbell from office “until rendering of a final judgment by the Eighth Circuit Court of Appeals or other courts of proper jurisdiction.” Among the ways we can treat this appeal are the following: First, we can dismiss the appeal for mootness. Second, we can affirm the trial court’s holding that the “conviction” formed the basis for ouster from office upon final judgment by an appellate court. Third, we can ignore the mootness of the issue and go far beyond the holding of the trial court stating a new rule of law not supported by our cases or even argued in the parties’ briefs.

The majority has made the third choice. It is wrong in doing so for two reasons. This is not the sort of moot case which requires resolution in the public interest and because otherwise the issue might never be decided. The court has no business going beyond the issues presented by the trial court’s judgment and the briefs of the parties.

1. Mootness

Ordinarily we do not decide cases that are moot. Logan v. State, 299 Ark. 550, 776 S.W.2d 327 (1989). Campbell contends we should decide this case even if it is moot because of the public interest in the outcome, as we did in Cummings v. Washington County Election Comm., 291 Ark. 354, 724, S.W.2d 489 (1987). We chose to decide that case on its merits, despite its mootness, because it involved the qualifications of a candidate. The judicial process cannot run its course to finality when the issue is the qualifications of a candidate, and the election in question is immediately in prospect. We found it to be the type of case we should decide because otherwise the issue might never be decided, as every case in which it might arise would tend to be moot before a decision could be reached. This is not such a case. The conviction of a public official of an offense for which he or she might be removed from office may come late or early in the term of office being served. There is nothing about the situation which would tend to make it moot in every instance.

In Anderson v. State, 266 Ark. 192, 583 S.W.2d 14 (1979), we chose to review a moot issue, pointing out that we made the choice because the matter was sufficiently important to warrant a decision on the merits. In that case, a county judge had been removed from office by a circuit court with no notice whatever. He was, in effect, invited by the court, and given six days, to prove he should not have been removed. We stated no reason for holding the matter was one “of sufficient importance” to rule on the merits despite mootness. Presumably it was done because of the egregious nature of the violation of the rights of the official who had been removed.

While the issue of when a conviction becomes final for purposes of deciding a collateral matter, such as removal from office, is an important one, this case does not present circumstances which should move us to decide it in the absence of an actual controversy.

2. Eclipsing the trial court

All judges suffer frustration with the delays which can occur in the criminal justice system. We should not, however, allow that frustration to overcome our usual judicious caution in deciding only that which is presented to us for decision.

The trial court followed our decision in May v. Edwards, 258 Ark. 871, 529 S.W.2d 647 (1975). In that case, we considered the collateral effect of conviction of a public official. An alderman had been replaced as a city council member after having been convicted of an offense. The alderman who had been ousted, and whose conviction had subsequently been reversed, brought suit, claiming the person who had replaced him was usurping his office. The trial court sustained a demurrer to his complaint. We reversed that part of the trial court’s decision and held a cause of action had been stated. In doing so, we were required to decide whether the provision of Ark. Const. art. 5, § 9, that “No person hereafter convicted of . . . [an] infamous crime shall be . . . capable of holding any office or trust or profit in this State” required the plaintiffs ouster from public office. Justice Fogleman wrote for the court:

We have, on previous occasions, decided what constituted conviction of a felony insofar as enforcement of collateral effects [is] concerned. We have consistently held that, before such effects are enforced, the judgment must not only not be subject to reversal, but it must also have been carried into effect by actual imposition of sentence. See Owen v. State, 86 Ark. 317, 111 S.W. 466; Huddleston v. Craighead County, 128 Ark. 287, 194 S.W. 17; State Medical Board v. Rogers, 190 Ark. 266, 79 S.W.2d 83; Tucker v. State, 248 Ark. 979, 455 S.W.2d 888; Sutherland v. Arkansas Department of Insurance, 250 Ark. 903, 467 S.W.2d 724. There is no reason why the word “convicted” should be taken to mean something different, even if Art. 5 § 9 be taken to be self-executing, so that an incumbent must be ousted from office upon being found guilty of an infamous crime, without awaiting the final disposition of the case. A judicial definition of the word “convicted” different from any we have previously given it should not be the basis of the highly penal effect of removal of an incumbent when the legislature has not provided either for removal or suspension before the conviction has become final. Other jurisdictions have held that the word “convicted”, in the same or a similar constitutional provision, is to be given the strict legal meaning we have accorded it in the cases above cited and not its popular meaning, so that a conviction must be based upon a final judgment not subject to review. Summerour v. Cartrett, [220 Ga. 31, 136 S.E.2d 724 (1964)] supra[;] Common-wealth v. Reading, 336 Pa. 165, 6 A.2d 776 (1939); People v. Fabian, 192 N.Y. 443, 85 N.E. 672, 18 LRA (ns) 684 (1908). Cases based upon constitutional provisions or statutes which expressly declare that an office becomes vacant when the holder is convicted of a felony or infamous crime, such as State v. Sullivan, 66 Ariz. 348, 188 P.2d 592; McKannay v. Horton, 151 Cal. 711, 91 P. 598; State v. Jurgensen, 135 Neb. 136, 280 N.W. 886; re Obergfell, 239 N.Y. 48, 145 N.E. 323; State v. Vogel, 65 N.D. 137, 256 N.W. 404; State v. Levi, 109 W.Va. 277, 153 S.E. 587; People v. Enlow, 135 Col. 249, 310 P.2d 539; Bell v. Treasurer of Cambridge, 310 Mass. 484, 38 N.E.2d 660; Atty. Gen. v. Montgomery, 275 Mich. 504, 267 N.W. 550 are neither controlling nor persuasive. We would have an entirely different situation if our constitutional provision so read or if we had such a statute.

The court’s opinion attempts to get around May v. Edwards by remarking that Justice Fogleman noted there was no statute implementing the constitutional provision. The opinion neglects to mention, however, that there still is no such statute. That is no distinction whatever. The court also mentions that there were “extenuating circumstances” in May v. Edwards. No matter how the circumstances may have differed, there is no doubt the opinion laid out this court’s interpretation of “conviction” as used in the constitutional provision based on facts which placed that question at issue. The court is now overruling May v. Edwards without saying it and doing so in a case where it is not only unnecessary but improper. If the court is determined to affirm the judgment in this admittedly moot case, the most it should say is that Campbell stood convicted under the law of this state because his conviction was not subject to further review and the possibility of reversal.

Would today’s court have held the ousted alderman in May v. Anderson had been “convicted” and thus could not state a claim against an alleged usurper despite the reversal of his conviction? Will we someday have to hold, as the result of the decision the court makes today, that an elected official must give up his or her office despite our decision that a “conviction” must be reversed because of insufficiency of evidence to support it? Surely that cannot be the law. While the court’s opinion recognizes “the potential for harm to which [its] interpretation gives sufferance,” it does not say how we will deal with that harm. Will we just let it go for the sake of rigidity, or will we “distinguish” Campbell v. State by saying there were “extenuating circumstances” which required us to hold that a public official was subject to ouster despite the fact that his conviction was still subject to reversal? Not only are there no circumstances in this case which require such a decision, it was not even the decision of the trial court which we purport to affirm.

I respectfully dissent.

Purtle and Glaze, JJ., join this dissent.

       This abbreviated scheduling appears to have been the result of a sudden docket change and the trial judge, assigned from another circuit, sought to take advantage of the unexpected opening on his calendar.


author: Steele Hays, Justice. Tom Glaze, Justice, John I. Purtle, Justice,

text:
    Carol Ann LAYMAN v. William Joseph LAYMAN
    89-81
    780 S.W.2d 560
    Supreme Court of Arkansas
    Opinion delivered December 11, 1989

      Roy & Lambert, by: David E. Morris, for appellant.

      Davis & Associates, P.A., by: Jeff H. Watson, for appellee.
   Steele Hays, Justice.

The only issue before us is whether the chancellor’s approval of a report by a special master fixing the value of a partial interest in stock is clearly erroneous.

This is the second appeal by Carol Ann Layman. The facts are more fully stated in Layman v. Layman, 292 Ark. 539, 731 S.W.2d 771 (1987). In the first appeal we reversed the chancellor’s finding that the appreciated value of stock in Layman’s, Incorporated, attributable to the time, effort and skill of Joe Layman, appellee, was not marital property within the meaning of Ark. Code Ann. § 9-12-315 (1987). We remanded with instructions to the chancellor to “determine the present fair market value of the stock in Layman’s, Incorporated, reduced by the fair market value of the stock at the time of acquisition. The difference should be treated as marital property.” Layman v. Layman, 292 Ark. 539, 543, 731 S.W.2d 771, pg. 774 (1987).

On remand, Mrs. Layman offered expert testimony that the enhanced value of the stock was $521,000, whereas an expert called by Mr. Layman testified to an enhanced value of $15,360. Confronted with that disparity, the chancellor appointed a special master, who submitted a report valuing the appreciation at $25,760, an amount the chancellor subsequently accepted. On appeal, the appellant argues that the chancellor erred in accepting the special master’s appraisal. We cannot sustain the contention.

I

The difficulty in calculating the “fair market” value of the appellee’s stock is that the stock is issued by a closely held family corporation. The chancellor found that the value of the entire corporation had increased $800,000 in net value. The articles of incorporation specifically state that the increased value of the corporation should be shared by those holding the common stock. The special master included in his report that “the $800,000 increase in value of the corporation, as determined by the court would, absent special considerations, be completely allocable to the common shares.” Joe Layman owns 100, or one-half, of the common shares, and his brother Gene Layman owns the remaining 100 shares of common stock. The appellant argues that the increased fair market value of Joe Layman’s stock should be one-half of $800,000, or $400,000. Furthermore, the appellant claims at least $200,000 as marital property.

In assessing the fair market value of the shares, the special master considered the nature of the corporation, namely, a closely held family corporation. To receive value from their stockholdings, the shareholders may either upon liquidation receive proceeds, or alternatively, the stockholders may sell their stock. The special master noted that the difference in these two options focuses on control of the corporation; a vote to liquidate by the corporate board must precede the act of distributing the assets. And because Mr. W. L. Layman, father of the appellee, retains voting control of 93.57 % of all stock entitled to vote, he alone can prevent the common stock from receiving the benefits of any increase in the value to the corporation.

The special master recognized the significance of W.L. Layman’s voting control on the fair market value of the stock in estimating the value of Joe Layman’s 100 shares of common stock. Therefore, the master attempted to establish a value for the appellee’s stock based upon a sale of the stock. The master then concluded that a willing buyer of the stock of the corporation must purchase both the common stock and Class A preferred stock in order to obtain effective control of the corporation. Hence, the net increase in value of the corporation, $800,000, must be apportioned between the Class A preferred shares and the common stock, pro rata. The appellee’s stock then increased by the fair market value of 3.22 % of $800,000, or $25,760. Of this $25,760 increase, the appellant receives $12,880 as marital property. It should be noted that even Mrs. Layman’s expert conceded that because of the way the corporation was structured, there was no market for the stock because, “You are not going to find a willing buyer. I don’t think you could sell it for the true definition of fair market value.” Under the facts of this case we cannot say the report of the special master or the chancellor’s findings were erroneous.

While we note the dissent’s reference to authority outside our jurisdiction, we are not persuaded by their reasoning. Stewart v. D.J. Stewart & Company, 36 Ill. App. 3rd 848, 346 N.E.2d 475 (1976), involves a dissenting minority shareholder’s appraisal action and sheds no light on the valuation of stock in closely held corporations for marital property distribution purposes. Likewise, Palmer v. Chamberlin, 191 F.2d 532 (5th Cir. 1951), concerns the legality of a bylaw restricting the transfer of corporate shares. In Palmer, the price of shares was determined according to a formula prescribed in a company bylaw and the issue of valuation is not discussed.

The dissent focuses entirely upon the fact that the common shares are supposed to receive all the benefits from the growth of the corporation, yet overlooks the fact that the common shares exercise only 6.4% of voting control. The dissent states that the case of Olsher v. Olsher, 78 Ill. App. 3d 627, 397 N.E.2d 488 (1979), was decided under a marital property law similar to ours. Despite the similarity in marital property laws, the issues on appeal are quite different. The Illinois court held that without evidence of the respective values of the various items of marital property, including the four shares of Foremost Sales Promotion, Inc., it was impossible to divide the marital property in “just proportion.” The court recognized that the shareholders of a closely held corporation do realize value from stock ownership in that they have certain rights of control or future profits. The Illinois court, just as the special master, recognized that the value of the shares in a closely held corporation would be a balance between these two elements.

II

Appellee maintains the case must be affirmed under ARCP Rule 53(e)(2), and while we have chosen to deal with the merits of appellant’s argument, we concede that the failure to comply with Rule 53 is an additional ground for affirmance. Rule 53(e)(2) reads in part:

The court shall accept the master’s findings of fact unless clearly erroneous. Within 20 days after being served with notice of the filing of the report, any party may serve written objections thereto upon the other parties. Application to the court for action upon the report and upon objections thereto shall be by motion and upon notice as prescribed in Rule 6(c).

This provision makes acceptance of the master’s report mandatory unless clearly erroneous. Moreover, the rule provides the parties with the opportunity to present objections. Here, the special master presented his report to the court on September 26, 1988, and on the same day the chancellor granted approval. Linder the rule the parties may object to the report within twenty days after being served with notice of the filing. Since the appellant received no notice of the filing of the master’s report, nor any opportunity to object, the appellant properly filed a motion to set aside the report because it failed to comply with ARCP Rule 53.

On October 11, 1988, the chancellor set aside the September 26, 1988, order approving the special master’s report and gave the parties twenty days to file written objections or exceptions to the report. On November 23,1988, no objections or exceptions having been filed, the chancellor approved and accepted the special master’s report. On appeal, the appellant presents substantive objections to the special master’s report for the first time. In Dashko v. Oil Fields Corp., 174 Ark. 1067, 298 S.W. 351 (1927), this court interpreted statutes similar to Rule 53 [Ark. Stat. Ann. § 27-1812 and § 27-1814 (Repl. 1962)] to mean that exceptions to the report of a master made for the first time on appeal will not be considered. Patterson Dental Co. v. Brazil, 14 Ark. App. 291, 688 S.W.2d 310 (1985). We have long held that the appellate court will not review the ruling or order of the trial court unless the party makes known to the trial court the action he desires the court to take or his objection to the action of the court and his grounds therefor. Daniels v. Cravens, 297 Ark. 388, 761 S.W.2d 942 (1988). Hence, the appellant should have filed written exceptions to the master’s report in compliance with Rule 53 in order to preserve the argument on appeal.

AFFIRMED.

Glaze, J., concurs.

Purtle, J., and Newbern, J., dissent.

Tom Glaze, Justice,

concurring. I believe this court was wrong in the original appeal when we adopted the rule that the increase in value of nonmarital property is marital property when that value is attributable in part to the time, effort and skill of a spouse during the parties’ marriage. See Layman v. Layman, 292 Ark. 539, 731 S.W.2d 771 (1987). In adopting that rule, we remanded the case so the trial court could determine the present fair market value of the nonmarital property as well as its fair market value at the time it was acquired. The difference, we said, should be treated as marital property. Although I have problems with the rule we adopted in the prior Layman decision, I must follow the law of this case. The parties and trial judge did what we instructed, so we must affirm.

John I. Purtle, Justice,

dissenting. We made a mistake when we sent this case back to the trial court to “determine the present fair market value of the stock in Layman’s, Incorporated, reduced by the fair market value of stock at the time of acquisition.” As we have now discovered, it is not possible for anyone to determine a “fair market value” for this stock, either at the time of acquisition or at the present. We should have instructed the court to determine the “fair value” of the appellee’s stock at the present time and at the time of acquisition. There is a great difference in the result when it comes to determining the interests of the parties in this stock.

It is not disputed that the original plan of W.L. Layman, the appellee’s father, was for all the increase in the value of the company after incorporation to benefit the common stock. In other words, the corporation was set up to enable the senior Mr. Layman to pass the benefit of the corporation and its ownership along to his children during his lifetime. The result would be that no estate tax would fall due at the time of the elder Mr. Layman’s death. This strategy is a bona fide estate planning device, and it continued through the years until property disputes arose between Carol and Joseph Layman in connection with their divorce.

The disputed property at issue here is the common stock owned by Joseph Layman — specifically, the increase in value of the stock during the marriage. I disagree with the method of evaluation endorsed by the majority. A table setting out the pattern of payments upon dissolution of the corporation reveals the following:

OWNER CLASS A CLASS B COMMON PAYABLE

W.L. Layman 2,910 $291,000.00

W.L. Layman 240 24.000. 00

Joseph Layman 680 68.000. 00

Gene Layman 680 68,000.00

Other Family 400 40,000.00

TOTAL Preferred 2,910 2,000 $491,000.00

Joseph Layman 100 '/i Balance

Gene Layman 100 l/i Balance

Total 2,910 2,000 200 5,110 100%

In other words, if the corporation were liquidated, Joseph Layman would receive half of any amount over the $491,000 required to pay the preferred shareholders. As of March 31,1985, the total assets of Layman’s, Inc., were valued at two million, seven hundred forty thousand, five hundred fifty-nine dollars ($2,740,559.00).

Quite apart from any reference to dissolution value, the chancellor determined that the corporation had increased in value by eight hundred thousand dollars ($800,000.00) during Carol and Joseph Layman’s marriage. It is safe to speculate that beyond this $800,000 increase in corporate value, the corporation would be solvent enough to cover the preferred stock liquidation figure of $491,000. The $800,000 increase accrues solely to the common stockholders, and Joseph Layman owns half of the common stock.

In January, 1986, Joseph Layman stated in his deposition that the retained earnings belonged to the common stock and that his accountant valued his stock “between three and four hundred thousand dollars.” However, by the time this case was heard, he had changed his mind. He further admitted then and at the trial that his father set the corporation up in a manner to insure that the father would have total control of the corporation during his lifetime and that he would approve how the money was spent and what happened to the corporation. At his death, the corporation would transfer control to the children, and there would be no increased value, other than par, in the stock which the elder Layman still held.

It may be useful, for an understanding of this case, to set out the ownership and type of shares with the voting rights of the parties as determined by the trial court:

VOTING STOCK #SHARES TYPE % VOTE

W.L. Layman 2,910 (Preferred) 93.57

Joseph Layman 100 (Common) 3.22

Gene Layman 100 (Common) 3.22

TOTAL 3,110 100.00%

Obviously, W.L. Layman knew what he wanted to accomplish when he set up the corporation. He also knew that the growth of the corporation, so far as its earnings were concerned, would inure to the benefit of the owners of the common stock, who are his two sons. Due to the fact that this closely held corporation was established in this manner and has followed this plan since incorporation over a decade ago, we should not now allow the shareholders to effectively transform the corporate structure for the purpose of preventing the appellant from receiving what I consider to be her fair share of the marital property.

I return to the phrase “fair market value” of the stock. In a family-held closed corporation, there is no established market value for the stock. The shares are not listed on any exchange and have no trading value through brokers. Even though there is no determinable market value for such shares, it does not mean that the owners of the stock do not receive benefits from their ownership. Courts have many times recognized that there is an ascertainable value for shares of stock in a close corporation. See Olsher v. Olsher, 397 N.E.2d 488 (Ill. App. 1979). The Olsher case was decided under a statute which was quite similar to the Arkansas statute on the division of marital property, inasmuch as an equal distribution of the property is not required. The trial court should consider all relevant factors before establishing a value of the ownership of stock in a closely held corporation. The Olsher opinion stated:

In the present case we find that in the absence of evidence of the stock’s value, the trial court’s division of the property was an abuse of discretion. Clearly, without evidence of the respective values of the various items of the marital property it was impossible for the court to divide the marital property in “just proportion” as required by the statute.

In Palmer v. Chamberlin, 191 F.2d 532 (5th Cir. 1951), the court held that when there were two or more classes of outstanding stock in a closely held corporation, the first step in evaluating the stock was to set aside an amount to liquidate a preference of preferred stockholders. The balance was then to be divided by the number of common shares outstanding in order to obtain the “book value” of each common share.

In a case somewhat analogous to the present one, an Illinois appellate court was confronted with the problem of establishing the fair value of stock. See Stewart v. D.J.Stewart and Co., 346 N.E.2d 475 (Ill. App. 1976). From different formulas two witnesses concluded that the fair value of the stock was $195 or $600 per share. The trial court established the fair value of the minority stock in that case to be $660 per share. The Stewart opinion quoted with approval the following language from Ahlenius v. Bunn & Humphreys, 192 N.E. 824 (Ill. 1934): “ ‘Every relevant evidential fact and circumstance entering into the value of the corporate property and reflecting itself in the worth of corporate stock’ may be considered in determining the value of the stock.”

In his article, Restrictions on Transfer of Stock in Closely Held Corporations: Planning and Drafting, 65 Harvard Law Review 733 (1952), Professor F. Hodge O’Neal treats this subject in much more detail. He sets forth the proper procedure in establishing evaluation of payment on transfer of restricted shares in a closely held corporation. O’Neal recognizes that no one formula is appropriate for all occasions. However, he does treat the numerous methods that have been used for establishing the value of shares in a closely held corporation. These are: (1) computation of book value; (2) establishment of the price at par or some other aribtrary figure mutually agreed on by the shareholders at the time the restrictions are imposed; (3) ascertainment of the market price of the shares or the highest price that a bona fide prospective purchaser will give; (4) determination of capitalized earnings; (5) analysis of appraisals; (6) authorization of the board of directors or other shareholders to set a value; (7) application of an A.R.M. 34 or “years’ purchase” type formula; (8) employment of the valuation imposed by tax authorities for estate inheritance tax purposes; and (9) adoption of a combination of two or more of these methods.

O’Neal notes that the book value of outstanding stock is a commonly used method for establishing value, but he emphasizes that it is frequently the most unsatisfactory method of determining the value of such stock. Book value, he writes, is an unreliable guide to the true worth of a going business. It is O’Neal’s opinion that a combination of the above-mentioned methods is more suitable than any single formula in determining the value of closely held stock.

Had the court employed a recognized formula, it could not have reached the inequitable result reflected in this case. By using a combination of the methods of valuation — and common sense — it can easily be established that the “fair value” of the appellee’s common stock should be analyzed in the light of the ownership of the common shares. It is, after all, the holders of the common stock who benefit from the growth of the corporation.

The master’s report, which was adopted by the chancellor, found that there was an $800,000 increase in the value of the corporation during the marriage. However, this increase was then apportioned between the class A preferred shares and the common stock, pro rata. The formula employed by the master has no relation to “fair market value.” It was, however, the only way to prevent the appellee from having to pay what I consider to be a fair and just award to his wife.

Moreover, the record reveals that for salary and bonus purposes, the appellee received 50 % of the dividends or payments of the corporation. He received an annual salary of $91,500 and a bonus of $91,500. Only 200 shares of common stock are outstanding. There are, however, 2,910 shares of preferred stock outstanding. In determining the increased value of Joseph Layman’s common stock, the master multiplied the increase in corporate value ($800,000) by Joseph Layman’s percentage of voting control (3.22%) and arrived at the ridiculously low figure of $25,760. This amount was divided equally to award Carol Layman $12,880. (Compare these figures with the $521,000 increase in value of Joseph Layman’s stock estimated by James Sandlin, a certified public accountant with twenty-five years experience.) Such disparity obviously deserves closer examination than the majority opinion has given.

The master has misapplied the meaning of “fair market value,” “fair value,” and even “book value” by creating this method of valuation. While voting control is certainly a crucial aspect in the day-to-day operation of a close corporation, in this situation its sole importance is to show W.L. Layman’s business acumen in setting up the corporation. The bottom line is that the owners of the common stock were supposed to receive the lion’s share of the corporate growth and profit. I am sure Joe Layman will receive what was intended after this opinion is final. The master failed to adequately address or explain the problems involved in valuing the stock of closely held corporations. See O’Neal & Thompson, O’Neal’s Close Corp. § 1.07 (3d Ed.)

Layman’s, Incorporated, is an Arkansas business corporation which was established in 1978. Previously, it had been operated as a sole proprietorship. At the time of incorporation, the parties to this action had been married for many years. Obviously, the stock came to Joseph Layman during the marriage. We have already determined that part of it was by gift and that the wife was not entitled to any part of the gifts.

We did determine, though, that she was entitled to share in the increase in the value of the stock during the 31 years of marriage. Unfortunately, we rather loosely stated that the chancellor should determine the “fair market value” of the property, then and now, instead of specifying “fair value.” The master stated in his report that “It is my determination that a willing buyer of the stock of the corporation must purchase both the common stock and Class A preferred stock in order to obtain effective control of the corporation.” It would be unnecessary, however, to purchase any of the common stock in order for one to gain control of the corporation.

The corporate or business term-of-art, “fair market value,” requires an agreement on price between a willing buyer and a willing seller on the open market. Southern Bus Co. v. Simpson, 214 Ark. 323 at 325, 215 S.W.2d 699 (1948). I question whether Joseph Layman would sell his stock for $25,760, considering the livelihood he derives from his role in the corporation. It was patently unfair to use Joseph Layman’s 3.22 percent of voting to derive the increase in value of his common stock. This method of valuation appears to be an unrealistic effort to achieve a result that will hopefully comply with the impossible mandate of this court. The majority is now telling the wife of 31 years and mother of three grown children that in reality she is going to get exactly 3.22 percent of the increase in value of the stock during the marriage. For other purposes Joseph Layman’s 3.22 percent ownership netted him 50 percent of the corporate growth, which amounts to $400,000.

Further comment serves no purpose. On remand, I would have the chancellor determine the “fair value” of the increase in this property during the marriage. An equitable share of $400,000 is obviously more than $12,880. Certainly, what has been accomplished is far from a division in keeping with the spirit of the Arkansas Marital Distribution Statute. Furthermore, the result in this case is, in my opinion, simply unconscionable.

Newbern, J., joins.

       The 3.22% represents the appellee’s voting stock percentage.