author: Robert L. Brown, Justice. Robert H. Dudley, Justice,

text:
    Edward WALKER and Ortha Walker v. GRANT COUNTY SAVINGS AND LOAN ASSOCIATION
    90-124
    803 S.W.2d 913
    Supreme Court of Arkansas
    Opinion delivered February 18, 1991.

      David J. Manley, for appellant.

      David E. Smith, for appellee.
   Robert L. Brown, Justice.

This appeal concerns the notice procedures a lender must follow under the Uniform Commercial Code in order to claim a deficiency judgment against the debtor following the sale of collateral. The facts in this case are not disputed.

On May 24, 1985, appellants Edward Walker and his wife, Ortha Walker, signed a promissory note in favor of appellee Grant County Savings and Loan Association in the amount of $59,134.39, which was secured by thirty head of cattle and various pieces of logging equipment including a John Deere skidder, two Ford trucks, a Prentice loader, a Massey Ferguson tractor, and an International tractor, the back of the note contained the terms of the security agreement which included notice to the Walkers in the event of default and sale of collateral:

I also agree that if any notice is required to be given to me of your intended sale or disposition of the property, notice will be considered commercially reasonable if provided by first class mail addressed to me at the address listed on the front side of this form mailed 10 days before the date of intended disposition. [Emphasis ours.]

The Walkers subsequently defaulted on their note payments, and the savings and loan commenced the process for repossessing the equipment and selling the same. On September 8,1988, the Walkers and representatives of the savings and loan signed their names to a handwritten list of the Walkers’ collateral equipment and prices:

Loader 7,500
Skidder 12,000
Int’l Tractor 5.000
Ford Truck 4.000
Massey Ferguson 4.000

These figures represented amounts the Walkers considered acceptable for the items.

On September 27, 1988, Frank Springer, on behalf of the savings and loan, wrote Edward Walker a handwritten message on the bottom of a statement of account for the defaulted note which read:

Mr. Walker, This is to advise you that we will pick up the equipment pledged on the above contract no later than the 3rd day of October, 1988, unless you have been successful in selling the equipment before that time. The equipment will be included in our auction sale on October 8, 1988 at Sheridan. Should it fail to bring as much as the balance on the loan account you will then be responsible to us for the deficency [sic].

Springer hand-delivered the message to the Walkers on September 27, 1988.

The savings and loan caused an auction flyer to be printed which advertised the sale of multiple items, including the Walkers’ equipment, for 10:00 a.m. on October 8,1988, at a designated site in Sheridan, Arkansas. According to Springer, this flyer was mailed to the Walkers on October 3, 1988. Two pieces of the Walkers’ equipment were sold at the auction, but the Prentice loader and the 1976 Ford truck with the skidder mounted on it were not sold because the prices offered were inadequate.

Following the October 8,1988 auction, Springer did receive an offer on the Prentice loader from Alvin Rogers and conveyed that offer by telephone to Edward Walker. Springer testified that Walker agreed to this sale. Springer also testified that he contacted Edward Walker about selling the 1976 Ford truck with the skidder to Billy Wilson and that he and Walker had three separate telephone conversations about it. According to Springer, Edward Walker first refused to sell at the offered price but then relented in late December, 1988. Ortha Walker testified that her husband “told me that Mr. Lamb [of the savings and loan] had called him and told him that they were getting ready to sell this equipment. . . .” She added that “the next day I got this letter that it was sold.”

In answering a series of questions about his understanding of what was to happen to unsold equipment after the auction, Edward Walker said:

Well, that was kind of an agreement that they was gonna sell it after, you know, that, uh, if somebody come by they were gonna agree they would sell it, get all we could out of it to pay on that note.

A deficiency resulted after sale of all the Walkers’ collateral, and on April 10, 1989, the savings and loan filed suit against the Walkers in the amount of $30,865.04. A trial was held before the circuit court, and, following the savings and loan’s case, the Walkers moved for a directed verdict on grounds that the sale of equipment was not conducted in a commercially reasonable manner and that reasonable notice of the sale was not given as required by the Commercial Code. The trial court denied the motion and the Walkers rested their case, whereupon judgment was entered in favor of the savings and loan. In his judgment the trial court specifically found that a post-default agreement existed between the parties which was reasonable and which rendered the issues of notice of sale and commercial reasonableness “immaterial.”

We do not agree and reverse the trial court’s decision.

The savings and loan’s primary argument before the trial court and on appeal is that it had an oral post-default agreement with the Walkers and that the oral agreement controlled the sale of the collateral equipment and eliminated the necessity for notice under the Code. As evidence of this agreement the savings and loan points to statements made by Edward Walker in a deposition taken in a related case concerning arrangements he had made with Mr. Lamb of the savings and loan:

Q. Okay. Did you make an agreement with Mr. Lamb that your equipment would be sold?
A. Yeah, we made an agreement that he was gonna sell it.
Q. Was the agreement ever put in writing?
A. On selling it?
Q. Yes, sir.
A. Well, now we did put in writing, but the price, he told me about what it would bring.
Q. So the writing was what his estimate was as to what he thought the equipment could bring?
A. Uh-huh.
4* 4* 4*
Q. Okay? Was — now, I realize, and you stop me if I’m wrong, Mr. Walker, but in your own mind, what did you think the Savings and Loan was going to do with the equipment that didn’t sell at the auction that Saturday?
A. Well, they was gonna wait for another — I mean, they were supposed to maybe have another auction or maybe somebody would come by and buy it before, you know, they had another auction.
Q. All right. Now, was that just something that was in your mind or was that part of an agreement that you had with Mr. Lamb and Mr. Easley?
A. Well, that was kind of an agreement that they was gonna sell it after, you know, that, uh, if somebody come by, they were gonna - agree they would sell it, get all we could out of it to pay on that note.
Q. Okay. To get all they could?
A. Yeah, what I said, they were gonna sell it — they were waiting to get a big price for it while we were trying to get the note paid off.

In probing Ortha Walker for her understanding of any post-default agreement, she testified the savings and loan told the Walkers it would try to sell the equipment “for as much as they could get out of 'em.”

We find no law in Arkansas to support the savings and loan’s argument that an oral post-default agreement suffices to render Code notice requirements and commercial reasonableness immaterial. On the contrary, the one Arkansas case that deals with post-default agreements and waiver of notice requirements involved a written agreement signed by the parties which specifically waived all notices of sale. Teeter Motor Co. v. First National Bank of Hot Springs, 260 Ark. 764, 543 S.W.2d 938 (1976).

Under the Commercial Code the debtor has specific rights after default which are enumerated:

1. The debtor has those rights and remedies provided in the security agreement. Ark. Code Ann. § 4-9-501(2) (1987).

2. The sale of the debtor’s collateral must be commercially reasonable as to method, time, place, and terms. Ark. Code Ann. § 4-9-504(3) (1987).

3. The secured party must send the debtor reasonable notice of the time and place of public sale of collateral and reasonable notice of the time after which private sales will be made, unless the debtor has signed a statement renouncing or modifying that right. Ark. Code Ann. § 4-9-504(3) (1987).

4. The debtor has the right to redeem the collateral by full payment of the debt before sale, unless otherwise agreed in writing. Ark. Code Ann. § 4-9-506 (1987).

The Code further provides that “the parties may by agree- merit determine the standards by which the fulfillment of these rights and duties is to be measured if such standards are not manifestly unreasonable.” [Emphasis ours.] Ark. Code Ann. § 4-9-501(3) (1987). The only reasonable interpretation of the “agreement” contemplated by this section is an agreement in writing. Indeed, at least one appellate court, in another jurisdiction, has interpreted the agreement reference in this section to be the original security agreement which outlined procedures for notice and sale in the event of default. Chapman v. Field, 124 Ariz. 100, 602 P.2d 481 (1979).

Any other interpretation does not withstand scrutiny. It would be radically inconsistent for the Code to underscore the debtor’s security agreement rights and rights to written notice of sale on the one hand and then permit the erosion of those rights by imprecise oral understandings on the other. One clear policy reason underlying Article 9 default provisions is the protection of post default debtors from the potential of overbearing tactics and intimidation by secured parties. After default the secured party is unquestionably in a position of control and even dominance. To insure that the debtor is fully apprised of his rights and fully aware of the process for the disposition of his property, the Code contemplates that agreements and notices and modifications relating to the sale be in writing.

It should also be noted that the Walkers are not as sophisticated in default procedures as the savings and loan. Edward Walker is visually impaired and has been totally disabled since 1987. Under such circumstances the Code places the responsibility of compliance with its default provisions squarely on the secured party, and evidence of this compliance must be in writing.

The savings and loan places great weight on a case which held that Code notices are immaterial where the debtor either agreed to the sale of collateral or actually made the sale himself. Pine Bluff Production Credit Ass’n v. Lloyd, 252 Ark. 682, 480 S.W.2d 578 (1972). That case is distinguishable on its facts because it dealt with perishable collateral which is specifically excepted from the notice requirements of § 4-9-504(3).

We, therefore, hold today that in order for a post-default agreement to establish the commercial reasonableness of a sale of collateral and to govern the notices relating to such sales as required by § 4-9-504 (3), it must be in writing. This holding certainly comports with our earlier decision considering such an agreement. See Teeter Motor Company, Inc. v. First National Bank of Hot Springs, 260 Ark. 764, 543 S.W.2d 938 (1976).

In the various dealings between the Walkers and the savings and loan, there is no writing that rises to the level of a post-default agreement. The only writing that even arguably could qualify is a list of equipment and prices signed by the parties on September 8, 1988. This casual list falls far short of a document establishing the commercial reasonableness of the sale.

A closer question is whether the savings and loan gave reasonable notice of sale to the Walkers as required under § 4-9-504(3). The savings and loan does not argue this point but prefers to rest its case on the existence of an oral post-default agreement. Nevertheless, the savings and loan clearly discussed the sale of collateral with the Walkers. The parties then signed the property list containing prices on September 8, 1988, and on September 27, 1988, Frank Springer at the savings and loan gave the Walkers notice of repossession, stating, “The equipment will be included in our auction sale on October 8, 1988 at Sheridan.” Springer says he personally gave this memorandum to Edward Walker.

The Code is precise about what is required of the secured party in terms of notice:

Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms, but every aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, if he has not signed after default a statement renouncing or modifying his right to notification of sale.

Ark. Code Ann. § 4-9-504(3) (1987). We have held that the notice requirements of § 4-9-504(3) must be consistently adhered to. First State Bank of Morrilton v. Hallett, 291 Ark. 37, 722 S.W.2d 555 (1987). We have further held that a debtor’s prior knowledge of the sale of collateral is not sufficient to satisfy this section in the absence of written notice:

Knowledge of repossession does not equate with notice of sale, nor does knowledge that an automobile [the collateral] will be sold. The debtor is entitled to notification of a specific date after which the creditor intends to dispose of the property. This would provide the debtor a fixed period within which to protect himself from an inadequate sale price in any manner he saw fit.

Wheeless v. Eudora Bank, 256 Ark. 644, 648, 509 S.W.2d 532, 534-535 (1974).

The handwritten message from Springer to Edward Walker does refer to a date and town. It was also hand-delivered, according to Springer, eleven days before sale, thus complying with the ten day notice-of-sale requirement contained in the security agreement signed by the parties. But there is no reference in the message to time of sale, or to specific location of sale, or to the method, manner, and terms of the sale other than the fact it was to be an auction. Any reference to private sales to be held after the auction was also omitted, and no subsequent written notice was given to either Walker about private sales.

Nor does the auction flyer mailed to the Walkers on October 3,1988, satisfy the Code requirements. It did not meet the test of commercial reasonableness under the security agreement because it did not comply with the ten day notice requirement.

We have previously held that the debtor is entitled to notice of the time and place of a public sale and notice of the date after which a private sale will be made as the Commercial Code provides. See Barker v. Horn, 245 Ark. 315, 432 S.W.2d 21 (1968). We have further held that “[w]hen a creditor repossesses chattels and sells them without sending the debtor notice as to the time and date of sale, or as to a date after which the collateral will be sold, he is not entitled to a deficiency judgment, unless the debtor has specifically waived his rights to such notice.” Rhodes v. Oakland Bank, 279 Ark. 51, 55, 648 S.W.2d 470, 471-472 (1983). Hence, the failure of the secured party to give written notice under § 4-9-503(4) of the Commercial Code or otherwise to establish the commercial reasonableness of the sale by written agreement with the debtor will bar the secured party from any right to a deficiency. See Bank of Dover v. Shipley, 299 Ark. 451, 773 S.W.2d 825 (1989). As we observed recently, “The rule and requirement are simple. If the secured party wishes a deficiency judgment, he must obey the law. If he does not obey the law, he may not have his deficiency judgment.” First State Bank of Morrilton v. Hallett, 291 Ark. 37, 41, 722 S.W.2d 555, 557 (1987); quoting Atlas Thrift Co. v. Horan, 27 Cal. App. 3d 999, 104 Cal. Rptr. 315 (1972).

There is, finally, the issue of whether the Walkers waived notice requirements under the Commercial Code by their actions or whether the doctrine of estoppel applies. The Code specifies that any modification or renunciation of notice must be a “statement” signed by the debtor. Ark. Code Ann. § 4-9-504(3) (1987). No such statement was signed by the Walkers in this case about either the public auction or the later private sales. Because a statement in writing signed by the debtors does not exist, waiver cannot be established by the savings and loan, and the debtors are not estopped to raise failure to give adequate notice as a bar to the deficiency judgment. To the extent that Pollack v. Pulaski Bank & Trust Co., 30 Ark. App. 20, 781 S.W.2d 497 (1989) stands for the proposition that written notice of sale is not required, we override that decision.

Again, we are mindful that the savings and loan relied solely on the theory of an oral post-default agreement between the parties which obviated the need for written notices or compliance with the commercial reasonableness requirements of the Code. The trial court adopted that theory as its conclusion of law. Though the Walkers argued before the trial court and on appeal that failure to give written notice and failure to sell the collateral in a commercially reasonable manner were defenses, this argument was not countered by the savings and loan. Indeed, the savings and loan did not present evidence that it had complied with § 4-9-504(3) because compliance, according to its theory, was immaterial. Nevertheless, the record appears complete on what was done by the savings and loan in the way of contacts with the Walkers following default on their loan.

The decision of the trial court is reversed and the case dismissed.

Dudley, Hays, and Glaze, JJ., dissent.

Robert H. Dudley, Justice,

dissenting. I wholly agree with the recitation of facts set out in the majority opinion, but I dissent from that opinion because I draw different legal conclusions from those facts.

First, it is my opinion that the notice requirements were satisfied with respect to the public sale of collateral, and thus, on that basis, I would affirm that portion of the judgment with respect to both Mr. and Mrs. Walker. Second, with respect to the private sales following the auction, I think the result reached by the trial court concerning Mr. Walker was correct, but should have been addressed in terms of estoppel rather than a “post-default agreement” between the parties. Third, I do not think Mrs. Walker received adequate notice of the private sales, nor do I think that she is estopped from asserting lack of notice. Consequently, appellee should not be permitted to obtain a deficiency judgment against Mrs. Walker with respect to the items sold at private sales.

I.

Notice Public Sale

The Code provides that “reasonable notification of the time and place of any public sale. . . shall be sent by the secured party to the debtor,. . . .” Ark. Code Ann. § 4-9-504(3) (1987). In addition, the parties had previously agreed that “notice will be considered commercially reasonable if provided by first class mail . . . [and] mailed ten (10) days before the date of the intended disposition.” As set out in the majority opinion, appellee hand-delivered a document to the appellants on September 27, 1988, eleven (11) days before the auction. It provided, “The equipment will be included in our auction sale on October 8th, 1988 at Sheridan.” The hand-delivery of that document, informing appellants of the date and town where the auction would be held, constituted reasonable notification of the “time” and “place” of the public sale. If appellants wanted a more specific time and location of the sale, they could have asked appellee’s representative at that time or at any time before the October 8 sale date. Additionally, appellee mailed the printed auction announcement on October 3, 1988, five days prior to the auction, which established the more precise time and location for the auction. Finding that the notice requirements were satisfied with respect to the public sale, I would affirm the trial court on that basis, and not on the basis of a “post-default agreement.”

II.

Notice Private Sales

With respect to the two private sales occurring after the auction, the Code provides, “reasonable notification of the time after which any private sale. . . is to be made shall be sent by the secured party to the debtor, if he has not signed after default a statement renouncing or modifying his right to notification of sale.” Ark. Code Ann. § 4-9-504(3) (1987). There is nothing in the record which would constitute a post-default statement, signed by the appellants, renouncing or modifying their right to notification of sale; and that is the only type of “post-default” agreement contemplated by § 4-9-504(3) (1987), and therefore allowed by § 4-9-501(3) (1987), which provides in pertinent part:

(3) To the extent that they give rights to the debtor and impose duties on the secured party, the rules stated in the subsections referred to below may not be waived or varied except as provided with respect to compulsory disposition of collateral (§ 4-9-504 ...),...:
(b) Section 4-9-504(3) . . . which deal with disposition of collateral;

Further, I agree with the majority that the September 27, 1988, notice to appellants omitted any reference to private sales to be held after the auction, and no subsequent written notice was given to appellants concerning the private sales.

I depart from the majority opinion, however, concerning the applicability of the doctrine of estoppel in this case. The majority addresses the doctrines of waiver and estoppel as if they were entirely interchangeable. While I agree that the distinctions between an implied waiver and equitable estoppel are sometimes blurred, I think it is important to preserve the distinctions. Waiver involves a voluntary and intentional abandonment or relinquishment of a known right. Worth v. Civil Serv. Comm’n, 294 Ark. 643, 746 S.W.2d 364 (1988); 28 Am. Jur. 2d, Estoppel & Waiver § 30 (1966). I agree that there was no express waiver here because, as just discussed, § 4-9-504(3) requires such a waiver of notice to be a written renunciation or modification.

Equitable estoppel, however, is a term applied to á situation where, because of something which he has done or omitted to do, a party is denied the right to plead or prove an otherwise important fact. It involves both, not just one, of the parties, and the party claiming it must show that it detrimentally changed its position based upon the other party’s conduct. Worth, supra; 28 Am. Jur. 2d, Estoppel & Waiver § 27 (1966). The Code recognizes and permits the application of the doctrine of estoppel. See Ark. Code Ann. § 4-1-103 (1987) which provides, “Unless displaced by the particular provisions of this subtitle, the principles of law and equity, including. . . the law relative to. . .estoppel. . .shall supplement its provisions.” (Emphasis added.) Further, in Wheeless v. Eudora Bank, 256 Ark. 644, 509 S.W.2d 532 (1974), we recognized the applicability of the doctrine of estoppel even though it was not called for in that case:

We are committed to the doctrine that, since estoppel bars the truth to the contrary, the party asserting it must prove it strictly, there must be certainty to every intent, the facts constituting it must not be taken by argument or inference and nothing can be supplied by intendment.

Further, while we discussed the issue in terms of notice being “immaterial” in Pine Bluff PCA v. Lloyd, 252 Ark. 682, 480 S.W.2d 578 (1972), it seems to me the real basis for that opinion lies in the doctrine of equitable estoppel. If Lloyd could be distinguished solely on the basis that it involved perishable collateral, it would not have been necessary for this Court to have relied so heavily on the finding of fact that H.G. Lloyd had made the sale. See also., Ralston-Purina Co. v. Bertie, 541 F.2d 1363 (9th Cir. 1976); Appleton State Bank v. Van Dyke Ford, Inc., 90 Wes. 2d 200, 279 N.W.2d 443 (1979); Umbaugh Pole Bldg. Co., Inc. v. Scott, 58 Ohio 2d 282, 12 Ohio Ops 3d 279, 390 N.E.2d 320 (1979); Commercial Credit Corp. v. Wollgast, 521 P.2d 1191 (Wash. App. 1974); and Nelson v. Monarch Inv. Plan, Inc., 452 S.W.2d 375 (Ky. 1970). Finally, although not controlling, I find the case of Pollack v. Pulaski Bank & Trust Co., 30 Ark. App. 20, 781 S.W.2d 497 (1989) persuasive. Consequently, I would adopt the reasoning of Pollack on the issue of estoppel, rather than overruling it as the majority has done.

Accordingly, because it is undisputed that Mr. Walker engaged in discussions with appellee concerning the two private sales, even refusing one offered price for some time; Mr. Walker agreed to the sales; and appellee relied on those agreements and changed its position to its detriment with respect to that collateral, I conclude that Mr. Walker should be estopped to assert any defense concerning lack of notice.

III.

Notice Mrs. Walker

The only evidence concerning Mrs. Walker’s knowledge of the private sales was that her husband “told me that Mr. Lamb [appellee’s representative] had called him and told him that they were getting ready to sell this equipment. . . .’’The next day she received a letter informing her that the equipment was sold. For all of the reasons previously discussed it is clear that Mrs. Walker neither received nor waived notice under the applicable code provisions. Further, while it is true that inaction will sometimes serve as the basis for equitable estoppel, the facts do not support application of that doctrine to Mrs. Walker. In short, she did not engage in the discussions concerning the private sales; she did not agree to them; and one day’s inactivity in objecting to the agreed upon sales does not provide the strict proof required for appellee to be able to assert the doctrine with respect to Mrs. Walker.

In sum, I would affirm the trial court’s ruling that Mr. Walker is liable for the entire deficiency, but I would reverse the ruling to the extent that it also found Mrs. Walker liable for the entire deficiency. Her liability should be reduced by the sums received at the two private sales, $6,885 and $8,000, for a total reduction of $14,885.

Hays and Glaze, JJ., join in this dissent.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Joe A. BARKER and Leo E. Barker v. Albert E. BATES and Shirley Bates
    RC 90-68
    803 S.W.2d 554
    Supreme Court of Arkansas
    Opinion delivered February 18, 1991.

      Westphal & Steenken, by: F. Lewis Steenken, for appellant.

      Ralph C. Williams, for appellee.
   Per Curiam.

In this civil case, we denied the petitioners’ motion for rule on the clerk to lodge the transcript because the attempt to lodge it with this Court was untimely. The petitioners ask that we reconsider our ruling, stating that we “routinely grant a rule on the clerk when counsel freely admits his negligence in tendering the record on appeal in . . . [an untimely] manner.” The case cited in support of that statement is Shuffield v. State, 292 Ark. 185, 729 S.W.2d 11 (1987).

It is correct to say that we routinely grant such motions in criminal cases. The reason is as follows:

The authorities, Blanchard v. Brewer, 429 F.2d 89 (8th Cir. 1970), hold that the denial of an appeal for such causes amounts to a denial of a constitutional right, on the theory that such a miscalculation, although honestly made, amounts to ineffective assistance of counsel.
Since to deny the Motion for a Rule on the Clerk would furnish grounds for Petitioner to obtain a new trial in a post-conviction proceeding, we as a pragmatical matter must grant the motion to docket the record as a belated appeal.

Harkness v. State, 264 Ark. 561, 572 S.W.2d 835 (1978).

The “pragmatical” basis of the Harkness case rule does not apply in civil cases, so we do not grant such petitions except in criminal cases.

Petition denied.


text:
    Albert and Ruby MITCHELL v. CITY OF MOUNTAIN VIEW
    91-9
    803 S.W.2d 556
    Supreme Court of Arkansas
    Opinion delivered February 18, 1991.

      Appellant, pro se.

      Jeff Dobbins, for appellee.
   Per Curiam.

The City of Mountain View (City) has moved to dismiss the appeal of Albert and Ruby Mitchell because the time for filing the record on appeal has expired. Notice of appeal was filed on September 19, 1990, and the Mitchells have neither filed the record with the Clerk nor responded to the motion to dismiss the appeal.

Ark. R. App. P. 5(a) provides that, “[t]he record on appeal shall be filed with the clerk of the Arkansas Supreme Court and docketed therein within 90 days from the filing of the first notice of appeal, unless the time is extended by order of the trial court as hereinafter provided. . . .” The Mitchells have not filed a request for an extension in which to file the record and none has been granted. Consequently, the Mitchells are procedurally precluded from pursuing their appeal, and the City’s motion to dismiss the appeal must be granted.

This procedure is unusual in that no appeal is pending in this court and were the Mitchells to attempt to perfect an appeal the record would be refused by the Clerk as untimely. However, since the trial court has no power to dismiss an appeal [except as provided in Ark. R. App. P. 3(b)], Johnson v. Carpenter, 290 Ark. 255, 718 S.W.2d 434 (1986), there is some uncertainty as to how a stale appeal may be dismissed. We think the procedure followed by the City in this case is proper, that is, if the time for appeal has expired and the prevailing party prefers to formalize that fact without waiting for seven months to elapse, such party may file with the Clerk a partial record and move for a dismissal. Where the partial record demonstrates that the appeal is barred that motion will be granted.

The City also requests that it be reimbursed for its costs. We grant that motion, pointing out that if a would-be appellant, after filing notice of appeal, permits- the appeal to become stale, it can avoid incurring further costs by seeking a dismissal in the trial court pursuant to Ark. R. App. P. Rule 3(b).

Motion for dismissal of appeal and recovery of costs granted.


text:
    Jimmy Don MONTGOMERY v. STATE of Arkansas
    RC 91-9
    802 S.W.2d 472
    Supreme Court of Arkansas
    Opinion delivered February 18, 1991

      C.D. Mitchell, for movant.
    No response.
   Per Curiam.

Appellant Jimmy Don Montgomery, by his attorney, has filed a motion for a rule on the clerk.

His attorney, C.D. Mitchell, admits by motion and brief that the record was tendered late due to a mistake on his part.

We find that such an error, admittedly made by the attorney for a criminal defendant, is good cause to grant the motion. See our Per Curiam opinion dated February 5, 1979, In Re: Belated Appeals in Criminal Cases, 265 Ark. 964.

The motion is therefore granted. A copy of this opinion will be forwarded to the Committee on Professional Conduct.


author: Robert H. Dudley, Justice.

text:
    Glen COLLINS v. STATE of Arkansas
    CR 90-23
    804 S.W.2d 680
    Supreme Court of Arkansas
    Opinion delivered February 25, 1991.

      John H. Bradley, for appellant.

      Steve Clark, Att’y Gen., by: J. Brent Standridge, Asst. Att’y Gen., for appellee.
   Robert H. Dudley, Justice.

Appellant, Glen Collins, was found guilty of first degree murder and sentenced to life in prison. We affirm the judgment of conviction.

For his first point of appeal, appellant argues that his right to a speedy trial was violated. The time for appellant’s trial began running on the date of his arrest, July 24,1988. A.R.Cr.P. Rule 28.2(a). A defendant is entitled to have the charges against him dismissed with an absolute bar to prosecution if not brought to trial within twelve (12) months from the date of his arrest, A.R.Cr.P. Rule 28.1(b), unless the period of delay is excluded under A.R.Cr.P. Rule 28.3. Appellant was not tried until September 14, 1989, approximately one and one-half months beyond the twelve-month limit.

Once appellant established that he was not tried within the twelve-month period, the burden shifted to the State to show that any delay was the result of appellant’s conduct, or was otherwise justified. Nelson v. State, 297 Ark. 58, 759 S.W.2d 215 (1988). A.R.Cr.P. Rule 28.3 provides in pertinent part, “The following periods shall be excluded in computing the time for trial: (a) The period of delay resulting from other proceedings concerning the defendant, including but not limited to an examination and hearing on the competency of the defendant. . . .” On September 27, 1988, appellant presented a petition for psychiatric evaluation which was granted by the trial court.. He was not transported to the hospital, however, until February 28, 1989, because, as noted by the trial court in its order denying the motion to dismiss, there were reported renovations and overcrowding of the facilities. On March 20, 1989, the State mental hospital mailed its psychiatric report which found that appellant was fit to stand trial. On March 21,1989, appellant was returned to jail to await trial. In computing the time for speedy trial, the lower court excluded the approximate six-month period from September 27, 1988, until March 21, 1989, based upon the portion of Rule 28.3(a) quoted above. The trial court was correct in doing so.

The gist of appellant’s argument is that it was not his fault that the State mental hospital would not take him for such a long period of time. As analogous support for his argument, appellant cites Novak v. State, 294 Ark. 120, 741 S.W.2d 243 (1987), in which we reversed and dismissed a conviction for violation of speedy trial rights. There, the period of delay was caused by the judge’s illness. Novak is clearly distinguishable from the instant case. First, periods of delay resulting from competency examinations are specifically excluded by A.R.Cr.P. Rule 28.3(a); those resulting from a judge’s illness are not. Second, a trial judge is an integral part of the criminal justice system, and thus it is reasonable to scrutinize the efficiency with which that system operates most carefully. The state hospital, on the other hand, is not an integral part of the criminal justice system. It is wholly independent of the judiciary or prosecuting attorney’s office. Accordingly, delays caused by its operations would not be subject to the same level of scrutiny as delays caused by the criminal justice system itself. Finally, in Novak, the State did nothing in an effort to get a substitute for the judge who was ill. Here, however, in addition to the initial order granting appellant’s request for a competency examination, on January 20, 1989, the trial court also issued an Emergency Commitment Order when appellant became somewhat uncontrollable. Even with the emergency order, it still took another month to get appellant into the State mental hospital.

In short, appellant requested the competency examination. The fact that the hospital was undergoing renovations and was not able to examine appellant for five months is regrettable, but does not make the period of delay nonexcludable. There is no allegation that there was a deliberate attempt by the State to delay the trial in order to bolster the State’s case or to hamper the defense. Under the facts of this case, the delay occasioned by renovations and overcrowding was reasonable and unavoidable. The trial court was correct in excluding the six-month period of delay under A.R.Cr.P. Rule 28.3.

For his second point of appeal, appellant argues that the trial court erred in admitting photographs of the victim’s body. He contends they were inflammatory, prejudicial, and repetitious. The argument can be addressed summarily. We have reviewed the photographs to which appellant raised objections and hold that none of them are unfairly prejudicial or unnecessarily repetitious. The trial court did not err in admitting them.

Appellant’s third point of appeal is that the testimony of Gina and Robert Jones should have been excluded under A.R.E. Rules 404(b) and 403. After appellant stabbed the victim and left him on the side of a road, he drove his van to a convenience store. The trial court allowed Gina Jones to testify that at the convenience store appellant “harassed me for a little while;” that she also had difficulties with him later at a place named Couch’s; that after she saw blood in his van, appellant pulled out a knife; that she then called the police; and that appellant went to a car wash close by and began washing out the front of the van. Further, Gina’s brother Robert was allowed to testify that he, Gina, and Gina’s boyfriend started talking to appellant; that appellant “just started getting braver or something;” that appellant stated “he didn’t mess around and he pulled this sheet up;” that the sheet was in the van along with some blood; that they went to call the sheriff and when they got back, appellant was washing the inside of the van with a high pressured hose; they stayed until the police arrived.

Appellant argues that evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. A.R.E. Rule 404(b). Such evidence may be admissible, however, for other purposes. Id. We have long held that all of the circumstances connected with a particular crime may be shown, even if those circumstances would constitute a separate crime. Thomas v. State, 273 Ark. 50, 615 S.W.2d 361 (1981). Here, the events about which Gina and Robert Jones testified were merely further circumstances connected with the victim’s death. They completed the picture and explained the subsequent involvement of the police at the car wash. Here, appellant admitted killing the victim. It would make no sense for the prosecution to have introduced the testimony to show that appellant acted in conformity with other crimes. There was no issue in that regard. The trial court was not obligated to exclude the testimony under A.R.E. Rule 404(b). Neither was the probative value of the evidence outweighed by the danger of unfair prejudice under A.R.E. Rule 403.

Appellant’s final point of appeal is that the trial court erred in refusing to exclude evidence obtained as a result of his arrest because neither arresting officer met the minimum qualifications established by the Commission on Law Enforcement Standards.

At the time of appellant’s arrest, Ark. Code Ann. § 12-9-108(a) (1987) provided:

(a) A person who does not meet the standards and qualifications set forth in this subchapter or any made by the Arkansas Commission on Law Enforcement Standards and Training shall not take any official action as a police officer, and any action taken shall be held as invalid.

Appellant was charged by information, not an officer’s citation; consequently, we are not concerned with the validity of the charging instrument. Rather, appellant argues that any evidence obtained as the result of an arrest by unqualified officers should be suppressed as “fruit of the poisonous tree,” an exclusionary rule argument. We rejected an identical argument in Moore v. State, 303 Ark. 514, 798 S.W.2d 87 (1990), and Henry v. State, 304 Ark. 339, 802 S.W.2d 920 (1991). We explained in Moore that the exclusionary rule is designed to deter unlawful police conduct by removing the incentive to disregard the fourth amendment to the United States Constitution. As in Moore, we are not dealing with police conduct which constitutes a violation of the fourth amendment; accordingly, federal law does not compel us to apply the rule. Neither does State law. The statute at issue deals with standards for employment, not police conduct. Thus, the goal of the statute differs from that of the exclusionary rule. Accordingly, we decline to apply the exclusionary rule on State grounds.

In accordance with our Rule 11 (f) we have examined the record and determined that there were no adverse rulings which resulted in prejudicial error to appellant.

Affirmed.


text:
    Joe W. KING v. STATE of Arkansas
    CR 90-282
    804 S.W.2d 360
    Supreme Court of Arkansas
    Opinion delivered February 25, 1991.

      Robert Meurer, for appellant.

      Ron Fields, Att’y Gen., by: J. Brent Standridge, Asst. Att’y Gen., for appellee.
   Robert H. Dudley, Justice.

The appellant was driving his car in the City of Beebe when an auxiliary officer stopped him for a traffic violation. The auxiliary policeman saw that appellant appeared to be intoxicated, so he radioed his supervising officer and administered a field sobriety test. The supervising officer arrived, arrested appellant, and took him to the police station. There, he observed appellant for the required twenty minutes, and gave him a breathalyzer test. The result was a blood alcohol content of .22 %.

The appellant moved to suppress the results of the field sobriety test and breathalyzer test because, he alleged, the supervising officer did not meet the minimum standards set by the Commission on Law Enforcement Standards and Training. The trial court refused to suppress the evidence. We affirm that ruling.

Ark. Code Ann. § 12-9-303 (a) and (b) (1987) provides that the authority of an auxiliary police officer is derived from his supervision by a certified officer, but if the supervising officer does not meet the standards for a certified officer, the auxiliary officer shall have no authority except that of a private citizen. Ark. Code Ann. § 12-9-108 (1987) provides that the failure of a regular police officer to meet the qualifications set by the Commission on Law Enforcement Standards and Training requires that his official actions “be held as invalid.”

Appellant argues that section 1002 (1), (2), and (4) of the Standards requires that a police officer’s personnel file contain, among other things, a high school diploma or a G.E.D. certificate and a report from a physician stating that the officer is in good physical health. He then contends that the trial court erred in holding that the supervising officer’s personnel file contained these documents, and that the trial court erred in refusing to suppress the evidence.

We need not determine whether the trial court was clearly erroneous in his finding of fact that the supervising officer’s personnel file contained a diploma and physical report, because, even if it did not, the supervising officer was grandfathered in by statute. Ark. Code Ann. § 12-9-106(e)(l) (1987) provides that law enforcement officers serving under full-time permanent appointment on December 31, 1977, are not required to meet the standards as long as they are continuously employed. The supervising officer in this case testified he had been employed continuously as a full-time police officer for the past fourteen years, or since 1976, at various police departments. On cross-examination he did state there had been one interval of three weeks between the time he worked for the Cities of Stuttgart and England, but he was not asked whether he was on some type of leave during this period. Thus, it cannot be said that his testimony that he had been continuously employed as a policeman was in error. See Kittler v. State, 304 Ark. 344, 802 S.W.2d 925 (1991). In addition, even if appellant were not grandfathered in, we would not reverse for refusal to apply the exclusionary rule under those circumstances. State v. Henry, 304 Ark. 339, 802 S.W.2d 448 (1991).

Appellant next argues that a prior conviction for driving while under the influence should not have been used to enhance his sentence. He contends that the certified copy of the prior conviction does not show a knowing and intelligent waiver of his right to assistance of counsel. The docket sheet contains the following: “On 11/11/87, after waiving his right to consult with an attorney, Mr. King plead guilty to DWI first offense.” The authenticity of the certified copy of the docket sheet is not questioned.

The appellant cites a number of cases which stand for the proposition that an accused must make a voluntary, knowing, and intelligent waiver of his right to counsel. The minimum for determining whether a waiver was knowing and intelligent is a record which shows that the accused was made aware of the dangers and disadvantages of self-representation, and that he understood the consequences of his choice. The general statement is applicable to matters on direct appeal or post-conviction proceedings, but the issue here is, must we apply the same standard to collateral proceedings? We think not.

The overwhelming majority of DWI misdemeanor cases are disposed of in municipal courts. The usual “record” from such courts is the docket sheet. Such a limited record usually is not going to be detailed enough to show a voluntary, knowing, and intelligent waiver such as we require on direct appeal. As a practical matter, if the appellant were successful in his argument, it would wholly frustrate the intended effect of the enhancement concept of the Omnibus DWI Act. Even so, if the record were not sufficient to create a reliable presumption that the guiding hand of counsel was available, his argument would prevail. Here, however, the record is sufficient to create a presumption of regularity.

The constitutionally protected right to counsel will not be presumed from a silent record, Baldasar v. Illinois, 446 U.S. 222 (1980), but here the record is not silent. Instead, it reflects that he waived “his right to consult with an attorney. . . .” Such language is sufficient to create a presumption that the guiding hand of counsel was available in order to withstand collateral attack.

There must be a finality to all litigation, criminal as well as civil. The general rule is that a defendant who does not appeal a criminal conviction must be barred from collaterally attacking a judgment. There are exceptions to the general rule, but none of them are applicable to the facts of this case. Accordingly, we affirm the ruling that the judgment in this case is regular on its face and not subject to collateral attack.

Affirmed.


text:
    Howard SMITH III v. AMERICAN GREETINGS CORPORATION, an Ohio Corporation
    90-261
    804 S.W.2d 683
    Supreme Court of Arkansas
    Opinion delivered February 25, 1991.

      W. Hunter Williams Jr., for appellant.

      Moore, Moore-Hart & Barton, by Tom A. Bennett and Janice Levin, for appellee.
   Robert H. Dudley, Justice.

The plaintiff, Howard Smith III, was hired in 1980 by the defendant, American Greetings Corporation, as a materials handler at defendant’s plant in Osceola. He was subsequently promoted to forklift driver and held that job until he was fired in 1989. After being fired, he filed a complaint in circuit court in which he alleged that he was wrongfully discharged and that the defendant was guilty of the tort of outrage. The defendant filed an ARCP Rule 12(b)(6) motion to dismiss for failure to state facts upon which relief can be granted. The trial court granted the motion. The plaintiff appeals. We affirm the ruling.

Arkansas has long adhered to the employment-at-will doctrine which provides that a contract of employment for an indefinite term is terminable at the will of either party. Griffin v. Erickson, 277 Ark. 433, 642 S.W.2d 308 (1982). Under this doctrine an at-will employee may be discharged for good cause, no cause, or even a morally wrong cause. J.T. Youngdahl, The Erosion of the Employment-at-Will Doctrine in Arkansas, 40 Ark. L. Rev. 545, 546 (1987). In Lucas v. Brown & Root, Inc., 736 F.2d 1202 (8th Cir. 1984), the Eighth Circuit Court of Appeals assumed that, under Arkansas case law, every employment relationship, even one terminable at will, contains “an implied covenant of good faith and fair dealing, which under limited circumstances may make discharge actionable.” Id. at 1203. This covenant prohibits discharge for a reason which contravenes public policy. Public policy has been contravened “when the reason alleged to be the basis for a discharge is so repugnant to the general good as to deserve the label ‘against public policy.’ ” Id. at 1204-05.

In Sterling Drug, Inc. v. Oxford, 294 Ark. 239, 743 S.W.2d 380, reh’g denied, 743 S.W.2d 579 (1988), we verified the Eighth Circuit’s assumption about Arkansas law. In that case, we recognized an action for wrongful discharge when an employee is discharged in violation of the public policy of this state. In reaching our conclusion, we quoted from Sholtes v. Signal Delivery Serv., Inc., 548 F. Supp. 487 (W.D.Ark. 1982) in which the federal district court concluded that:

Arkansas law would recognize at least four exceptions to the at-will doctrine, excluding implied contracts and estoppel. These are: (1) cases in which the employee is discharged for refusing to violate a criminal statute; (2) cases in which the employee is discharged for exercising a statutory right; (3) cases in which the employee is discharged for complying with a statutory duty; and (4) cases in which employees are discharged in violation of the general public policy of the state.

Id. at 494.

The Sterling Drug, Inc. decision then noted cases acknowledging the public policy exception to employment-at-will where employees were discharged for refusing to violate a specific statute, for complying with a statutory duty, and for protesting their employer’s or other’s violation of state or federal law. After this survey of law in other jurisdictions, we held:

[A]n employer should not have an absolute and unfettered right to terminate an employee for an act done for the good of the public. Therefore, we hold that an at-will employee has a cause of action for wrongful discharge if he or she is fired in violation of a well-established public policy of the state. This is a limited exception to the employment-at-will doctrine. It is not meant to protect merely private or proprietary interests. Wagner, supra.

Id. at 249, 743 S.W.2d at 385 (1988).

The case cited at the end of the above quotation was decided by the Supreme Court of Arizona, Wagner v. City of Globe, 150 Ariz. 82, 722 P.2d 250 (1986). That case involved a policeman who had refused to conceal the illegal arrest and detention of a prisoner and was instrumental in having him brought before a magistrate. After characterizing the policeman’s conduct as “whistleblowing” activity, the court concluded that such activity serves a public purpose and should be protected, so long as the employee’s activity is not merely private or proprietary but seeks to further the public good.

In considering a motion for a judgment on the pleadings for failure to state facts upon which relief can be granted, the facts alleged in the complaint must be treated as true and viewed in the light most favorable to the party seeking relief. Battle v. Harris, 298 Ark. 241, 766 S.W.2d 431 (1989).

Here, plaintiff alleged that he had a dispute with his shift leader while at work, and after work he tried to discuss the matter, but the shift leader hit him. He alleged that he was fired the next day “because the management of defendant’s corporation found that he had provoked management personnel into a fight.” Plaintiff does not allege that he was pursuing some matter in the public interest and, that as a result, the defendant fired him. Instead, he merely alleges the redress of a private wrong. The trial court was correct in ruling that the complaint does not state facts upon which relief can be granted.

Plaintiff next argues that the defendant’s handbook for employees constitutes an express contract prohibiting termination except for cause, and he was fired in violation of that contract.

In St. Louis Iron Mtn. & So. Rwy. Co. v. Matthews, 64 Ark. 398, 42 S.W.902 (1897), we extended the employment-at-will doctrine to allow discharge for any reason, even if a contract stated the employee could be discharged only for cause. In Jackson v. Kinark Corp., 282 Ark. 548, 669 S.W.2d 898 (1984), we impliedly modified the rule by reversing the granting of summary judgment because the employer’s handbook provided for a three-month probationary period which was at least an implication that an employee could be dismissed for cause only. In Gladden v. Arkansas Children’s Hospital, 293 Ark. 130, 728 S.W.2d 501 (1987), we clarified our position stating:

[W]here an employee relies upon a personnel manual that contains an express provision against termination except for cause he may not be arbitrarily discharged in violation of such a provision. Moreover, we reject as outmoded and untenable the premise announced in St. Louis Iron Mt. Ry. Co. v. Matthews, 64 Ark. 398, 42 S.W.902 (1897), that the at will rule applies even where the employment agreement contains a provision that the employee will not be discharged except for cause, unless it is for a definite term. With those two modifications we reaffirm the at will doctrine.
We recognize that these cases bear some resemblance to Jackson v. Kinark Corp., supra, where we reversed the granting of summary judgment for a fuller development of the factual issues, noting a “possible implication” from Kinark’s manual that once probation was ended, an employee could be discharged only for cause. But we have considered several employment cases since Jackson and we realize Jackson may have given the impression that an implied provision would suffice. We have come to the conclusion that an implied provision against the right to discharge is not enough. . . .

Id. at 136, 728 S.W.2d at 505.

In Gladden, supra, we considered the employment manuals of two employer hospitals. Neither employee claimed she was employed for a definite length of time. The manuals contained provisions describing methods for dismissal under certain circumstances and specifying kinds of conduct which could result in summary dismissal. We held that since neither manual contained an express provision that discharge would be for cause only, there was no error in disposing of the cases for summary judgment.

Here, the plaintiff contends that one sentence in the employee’s handbook provides that discharge would be for cause only. The trial judge reviewed the sentence in context and correctly held that it did not expressly so provide. As previously discussed, in Gladden, supra, we said “an implied provision against the right to discharge is not enough.” Even taken out of context, the sentence does not rise to the level required to state a cause of action. The sentence is: “We believe in working and thinking and planning to provide a stable and growing business, to give such service to our customers that we may provide maximum job security for our employees.” In sum, the employment manual did not expressly provide that plaintiffs could be discharged only for cause, and therefore, the plaintiff failed to state a cause of action on this count.

Plaintiff additionally contends that his complaint alleges sufficient facts to state a cause of action for the tort of outrage or intentional infliction of emotional distress. We first recognized this cause of action in an employment setting in M.B.M. Co. v. Counce, 268 Ark. 269, 596 S.W.2d 681 (1980). Certain principles have emerged from this and subsequent cases in which we have considered claims for the tort of outrage in employment situations. The conduct giving rise to the cause of action must be extreme and outrageous, that is, “conduct that is so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized society.” Id. at 280, 596 S.W.2d at 687. Initially, the trial court must determine whether conduct may reasonably be regarded as so outrageous as to permit recovery. Givens v. Hixson, 275 Ark. 370, 361 S.W.2d 263 (1982).

Because of the employer’s right to discharge an at-will employee, a claim of outrage by an at-will employee cannot be predicated upon fact of discharge alone. However, the manner in which the discharge is accomplished or the circumstances under which it occurs may render the employer liable.

Harris v. Arkansas Book Co., 287 Ark. 353, 356, 700 S.W.2d 41, 43 (1985). The type of conduct that meets the standard for an outrage cause of action must be determined on a case-by-case basis. We have taken a strict view in recognizing such a claim, especially in employment relationship situations. Webb v. Pirelli Cable Corp. of Midwest, Inc., 300 Ark. 613, 780 S.W.2d 571 (1989); Ingram v. Pirelli Cable Corp., 295 Ark. 154, 747 S.W.2d 103 (1988).

The extreme and outrageous character of the conduct may arise from the employer’s knowledge that the employee is peculiarly susceptible to emotional distress by reason of some physical or mental peculiarity. The conduct may become outrageous if the employer continues it in the face of such knowledge, where it would not be so if he did not know. Ingram, supra; Sterling Drug, Inc. v. Oxford, 294 Ark. 239, 743 S.W.2d 380 (1988). The fact that an employer continues unjustifiable conduct over a long period of time can be an important factor weighing in favor of a finding that the employer’s conduct towards an employee was outrageous. Sterling Drug, Inc. v. Oxford, supra.

Here the employer’s conduct did not come close to meeting the above standards. The trial court correctly ruled that the complaint did not allege a cause of action for the tort of outrage.

Affirmed.


author:
Steele Hays, Justice.
      Robert L. Brown, Justice,

text:
    ARKANSAS STATE BANK COMMISSIONER and Merchants and Farmers Bank, West Helena, Arkansas v. BANK OF MARVELL
    90-106
    804 S.W.2d 692
    Supreme Court of Arkansas
    Opinion delivered February 25, 1991

      Steve Clark, Att’y Gen., by; J. Denhammcclendon, Asst. Att’y Gen., for appellant Arkansas State Bank Commissioner.

      Mitchell & Roachell, by: David E. Simmons, for Merchants and Farmers Bank.

      Stephen E. Safly, and Roscopf & Higgins, by: Charles B. Roscopf, for appellee Bank of Marvell.
   Steele Hays, Justice.

The Arkansas State Bank Commission approved an application of Merchants and Farmers Bank of West Helena, pursuant to Ark. Code Ann. § 23-32-1203 (Supp. 1989), to open a branch bank in Marvell, Arkansas, over the protest of the Bank of Marvell. Bank of Marvell appealed to the Circuit Court of Pulaski County where the order was reversed and the Commissioner was directed to deny the application.

The Bank Commissioner and Merchants and Farmers have now appealed from the circuit court, charging the circuit court with error in holding, first, there was no substantial evidence to support the findings of fact of the Commissioner that the public convenience and necessity would be promoted by the approval of the application and, second, in exceeding its authority. In the alternative, appellants ask that the case be remanded to the Commissioner for further proceedings.

We agree with the appellants that there was substantial evidence to support the findings of the Bank Commissioner and, accordingly, we reverse the judgment of the circuit court and remand to the Bank Commissioner for the entry of an order consistent with this opinion.

The applicable standard of review has been often stated. The rules governing judicial review of decisions of administrative agencies are the same for both the circuit and appellate courts. This review is limited in scope and such decisions will be upheld if supported by substantial evidence and not arbitrary, capricious or characterized by an abuse of discretion. Arkansas Alcoholic Beverage Control Board v. King, 275 Ark. 308, 629 S.W.2d 288 (1982); Arkansas Real Estate Commission v. Harrison, 266 Ark. 339, 585 S.W.2d 34 (1979). Administrative action may be regarded as arbitrary and capricious only where it is not supportable on any rational basis. Partlow v. Arkansas State Police Commissioner, 271 Ark. 351, 609 S.W.2d 23 (1980). It has been said that the appellate court’s review is directed, not toward the circuit court, but toward the decision of the agency. Green House, Inc. v. Arkansas Alcoholic Beverage Control Division, 29 Ark. App. 229, 780 S.W.2d 347 (1989). This is so because administrative agencies are better equipped by specialization, insight through experience, and more flexible procedures than courts, to determine and analyze legal issues affecting their agencies. First National Bank v. Arkansas State Bank Commissioner, 301 Ark. 1, 781 S.W.2d 744 (1989). Finally, the interpretation of statutes by an administrative agency, while not conclusive, is highly persuasive. Arkansas Contractor’s Licensing Board v. Butler Construction Co., 295 Ark. 223, 748 S.W.2d 129 (1988).

With those principles in mind, we turn to the evidence presented to the Commissioner. The Commissioner heard testimony on both sides of the question. Witnesses on behalf of Merchants and Farmers included Marvell Mayor Alma Norton, Thomas R. Hill, William B. Simmons, Gordon White and Jerry Kelley and on behalf of the Bank of Marvell, Dr. Charles Venus and Gibson Turley.

Mr. Hill, a CPA and bank consultant, testified that Merchants and Farmers had $6.4 million in loans and $6 million in deposits in the Marvell, Poplar Grove and Turner area — a clear indication that banking services were not available in Marvell because people do not travel fifteen or more miles for basic banking services unless forced to. He characterized as “astonishing” and “shocking” the Bank of Marvell’s failure to meet the credit needs of the trading area of Marvell, noting that the bank’s loans equaled only eight or nine percent of its total assets, placing the bank in the zero percentile, in contrast to an average loan-to-deposit ratio of forty-five percent for banks of like size. Hill said he had seen banks the size of the Bank of Marvell in the third or fourth percentile, but never “dead last in the whole country in the category of performance.” He testified that at the end of 1987 the Bank of Marvell had a total of $114,000 in agricultural loans, not enough for a single farmer to plant, which he called “incredible.” He said from 1983 to 1987 the bank’s loans shrank by $5,000 at the same time its total deposits increased by $3.4 million; that the bank had had no loan losses for the past five years. Hill stated that when a bank has no loan losses and a zero loan-to-deposit ratio, it means the bank is lending money only to those customers who do not need to borrow.

There was much additional testimony pro and con, that Marvell’s 1,650 residents have 461 checking accounts and 184 savings accounts with Merchants and Farmers Bank, that economic conditions in Marvell were stagnant and depressed and an additional bank would lead to destructive competition.

The appellee submits that the findings of the Commissioner recite merely that the convenience and necessity of Farmers and Merchants’ existing customers would be served by the opening of a branch in Marvell, whereas the law requires a showing that the convenience and necessity of the general public will be served. Granted, the language of the Commissioner’s order ostensibly supports that inference. But that particular wording does not imply that only the existing customers would benefit. The testimony of Thomas R. Hill refutes argument to the contrary. Asked on cross-examination if his testimony referred specifically to the convenience of existing customers, he answered:

No, I would disagree with that. . . .When you have the only bank physically located in Marvell, clearly unwilling to make loans to anybody except the most creditworthy people, the highest two or three percent creditworthy people in the area, then when you build another branch there, you clearly have increased the convenience and needs of the whole community. Some of the demographic data we have seen, an enormous percentage of the people in this part of — in Phillips County don’t even have a vehicle. Imagine the inconvenience to somebody that doesn’t have a car to try to get 15 miles east to West Helena to borrow money or cash a check. The convenience and needs of this entire community will clearly be enhanced one minute after this branch opens. [Our emphasis.]

Even the order itself, examined in its entirety, demonstrates the finding was not meant to be limited to existing customers. The Commissioner found, for example, that many people in the Marvell trade area have to travel to Helena or West Helena for banking services and that local conditions in the Marvell trade area provide reasonable promise of successful operation of the branch. The findings refer to letters from interested parties, several of which assert that the granting of the application would be in the best interest of all the residents of Marvell and the surrounding area. The conclusions set out in the order include a provision that the public convenience and necessity will be promoted by the establishment of the proposed branch. Finally, the order specifically refers to Ark. Code Ann. § 23-32-1203(f) (1987), which makes theapprovalofabranchbank dependent on a finding by the Arkansas Bank Commissioner that the convenience and necessity of the public would thereby be served and we are unwilling to conclude that the Bank Commissioner failed to understand this fundamental statutory responsibility when the law requires to the contrary that we defer to his discretion in a specialized field of regulation. Arkansas State Highway Commission v. White Advertising International, 273 Ark. 364, 620 S.W.2d 280 (1981). While we look to the language in which his order is couched, we also look to whether the evidence supports his ruling, and of that there can be no doubt. Nakdimen v. Brazil, 137 Ark. 188, 208 S.W. 431 (1919); Little Rock Traction Co. v. Kimbro, 75 Ark. 211, 87 S.W. 121 (1905).

Mr. Simmons, president of Merchants and Farmers, testified that the bank planned to offer all services in Marvell that were offered to its West Helena and Helena customers except safe deposit boxes. Those services include student loans, Farmers Home Administration guaranteed farm loans, home mortgage financing, home improvement loans, agricultural loans, FHA and VA loans, SBA loans and consumer loans of all types. In contrast, witnesses for the Bank of Marvell testified that the bank had stopped making Farmers Home Administration loans two or three years earlier and preferred not to make SBA, FHA, VA or student loans. Thomas R. Hill’s testimony included the observation that the Bank of Marvell would not be adversely affected because a branch bank in Marvell would draw business which the Bank of Marvell had made a conscious decision to forego by credit policies adopted years earlier. The Commissioner conducted a hearing, observed the witnesses and determined the proper weight to be accorded their testimony, and he concluded from the evidence that the application should be granted. White County Guaranty Savings & Loan Association v. Farmers & Merchants Bank, 262 Ark. 893, 562 S.W.2d 582 (1978). When the evidence in its entirety is given its strongest probative force consistent with the Commissioner’s actions, we consider the evidence to be both substantial and compelling in support of the Commissioner’s approval of the application. No other conclusion is possible.

Reversed and remanded to the Arkansas Bank Commissioner to enter an order approving the application consistent with this opinion.

Brown, J., dissents.

Robert L. Brown, Justice,

dissenting. In this case it was clear from the outset that Merchants and Farmers Bank applied for the branch bank in Marvell to benefit existing customers. The bank’s amendment to its application dated December 29, 1988, states as much:

Our bank has a substantial customer base in this area (we have used the zip codes for Marvell (72366), Poplar Grove (72374) and Turner (72383) to approximate the area) as depicted in the following table:

Type of Account Number of Accounts or Total Dollars of Accounts
Checking 461 accounts
Savings 184 accounts
Certificates of Deposit $3,237,540
Loans $6,401,617
It is presently very inconvenient for these customers to travel to our west — West Helena branch as driving time from Turner (one of the farthest points) is 35 minutes while driving time from Kindall (one of the closest points) is 15 minutes. We are not locating the branch in Marvell to capture a share of new business, as we agree the area is stagnant or losing population, but to serve our existing customer base. (Emphasis added.)

Serving existing customers was a primary focus of the applicant during the hearing before the Bank Commissioner, and the Bank Commissioner’s findings of fact evidence that emphasis:

22. Based upon the Application, the testimony of Bill Simmons, Jerry Kelley, Gordan White and Alma Norton, it is found that the Applicant has a substantial number of existing deposit and loan customers in the Marvell trade area, who will be better served by the Applicant through a branch in Marvell. The Applicant has approximately 461 checking accounts, 184 savings accounts, $3,237,540 deposited in certificates of deposit and $6,401,617 in loans with existing customers living in the Marvell trade area. A substantial amount of the loans are made for agriculture purposes. Applicant’s customers living in Marvell have to drive approximately 15 miles to the nearest branch and customers living in other areas have to drive even farther.
25. Based upon the testimony of Bill Simmons, Thomas N. Hill, Jerry Kelley, Gordan White and Alma Norton, the Application and other evidence, it is found that the public convenience and necessity of the Appli- - cant’s existing customers will be promoted by the establishment of the branch.
26. Based upon the Application, the testimony of Bill Simmons, Gordan White and Thomas N. Hill, it is found that local conditions in the Marvell trade area assure reasonable promise of successful operation of the branch. The projected income statements of the proposed branch appear conservative and indicate that the branch would be operated profitably with existing customers. (Emphasis added.)

State law confirms that in order to approve a new full service branch office, the Bank Commissioner must find that the branch “will serve the public convenience and necessity:”

(a) The Bank Commissioner shall have the authority to approve the application for a state-chartered bank to establish a full service branch, if he shall find upon investigation that the establishment of the branch is economically feasible and will serve the public convenience and necessity.
(f) The commissioner’s decision on a branch bank application will be in the form of final findings of fact, conclusions of law, and an order given by the commissioner within a reasonable time period following the expiration of the fifteen (15) calendar day formal protest period. The findings of fact shall include findings that:
(1) Public convenience and necessity will be promoted by the establishment of the proposed full service branch ....

Ark. Code Ann. § 23-32-1203 (Supp. 1989).

Other jurisdictions have made it clear under comparable language that the entire public is what is meant by such statutes and not the customers of any one bank, which could be better served by a new branch. See Bank of New Bern v. Wachovia Bank & Trust Company, N.A., 353 F. Supp. 643, (E.D. N.C. 1972); Citizens National Bank of Southern Maryland v. Camp, 317 F. Supp. 1389 (D. Md. 1970).

The finding of public convenience and necessity required under Arkansas statues is not limited to existing bank customers but must embrace the public as a whole. Yet it is obvious that the Bank Commissioner’s findings are premised on existing bank customers as opposed to the general public, which renders his order fatally deficient. The majority, however, chooses to deemphasize the language of the Bank Commissioner in his findings as well as the language in the bank’s amended application.

I would affirm the trial court’s judgment.

       Edoe, Inc.; Davidson Farm Products; Marvell Wood Products, Inc.


author: Steele Hays, Justice.

text:
    Marvin STOUT v. STATE of Arkansas
    CR 90-213
    804 S.W.2d 686
    Supreme Court of Arkansas
    Opinion delivered February 25, 1991
    [Rehearing denied March 25, 1991.]

      Terry Crabtree, for appellant.

      Ron Fields, Att’y Gen., by: John D. Harris, Asst. Att’y Gen., for appellee.
   Steele Hays, Justice.

Marvin Stout was arrested at the Spot-Not Car Wash in Rogers, Arkansas. An inventory of his effects led to the discovery of break-ins at two nearby schools. Marvin Stout was charged with breaking or entering, two counts of burglary and theft of property. A charge of second degree escape was later added. Tried as an habitual offender, Stout was convicted and sentenced to fifty-five years in the Arkansas Department of Correction. On appeal, Stout maintains the trial court erred in refusing to grant a motion to suppress evidence and that the state’s proof did not sustain the verdict. We affirm in part and reverse and dismiss in part.

I

MOTION TO SUPPRESS

There are two coin machines at the Spot-Not Car Wash — a coin machine on the south side of the building and a machine for making change located within a locked wooden cabinet. Shortly after 3:00 a.m. on March 9, 1989, a burglar alarm connected to the cabinet began sounding. Officer Helms estimated that he arrived at the scene in less than a minute. Helms observed a white male wearing a brown jacket standing in one of the bays. Helms drove past the car wash, turned off his lights and circled back where he stopped the individual, who was by then walking away from the car wash. The man identified himself as Marvin Stout, and explained that his car had broken down in Eureka Springs and he was walking home to Springdale. Helms noticed that Stout’s jacket pockets were bulging and a pat-down produced a large amount of currency and coin, two screw drivers and a small vise grip.

Another officer had arrived and their investigation revealed that the right side of the coin machine had scratch marks and that the lock on the doors of the cabinet containing the change machine had been pried off, but the machine itself was not disturbed. An assortment of hand tools, a black pouch and flashlight were nearby and shoe prints in the snow around the machines were similar to those worn by Stout.

At headquarters an inventory search produced, in addition to the screw drivers and vise grip, some $25 in quarters, some $ 13 in other coins, fifty one-dollar bills, other bills of larger denomination, a dozen postage stamps, an assortment of coin roll papers, two keys, one of which was labelled “Good Teacher,” and two fudge brownies in wrappers labelled “Little Debbies.” In all, the cash in Stout’s possession totalled $121.76.

The Initial Stop

Appellant maintains that his initial stop at the car wash was not based on a reasonable suspicion, nor were there specific, articulable facts from which Sgt. Helms could reasonably infer • that appellant was armed and, hence, there was no basis for a “pat-down.” Urging that these preliminary steps were improper, Stout insists the items were seized in violation of the Fourth Amendment.

Rule 3.1 of the Arkansas Rules of Criminal Procedure permits an officer to stop and detain any person the officer reasonably suspects may be engaged in criminal conduct either to obtain identification or to determine that the person’s conduct is lawful. A.R.Cr.P. Rule 2.1 defines “reasonable suspicion” as “a suspicion based on facts or circumstances which of themselves do not give rise to the probable cause requisite to justify a lawful arrest, but which give rise to more than a bare suspicion; that is, a suspicion that is reasonable as opposed to an imaginary or purely conjectural suspicion.”

Reasonable suspicion entails a consideration of the total circumstances and the existence of particularized, specific reasons for a belief that the person may be engaged in criminal activity. Hill v. State, 275 Ark. 71, 628 S.W.2d 285 (1982). That standard is easily met in this case: Helms was responding to a burglar alarm at 3:00 a.m. and observed Stout, who had no car, standing in the car wash. Arguably, that alone justifies an investigative stop under the rational of Terry v. Ohio, 392 U.S. 1 (1968). But there were additional factors: Stout’s explanation that he was walking home from Eureka Springs was not merely implausible, it was demonstrably untruthful since he was walking in the opposite direction from Springdale when he was stopped by Sgt. Helms. The other circumstances, already noted, give further emphasis to the grounds for the stop.

The Frisk

When a lawful stop occurs, the police are permitted to search the outer clothing of an individual and the immediate vicinity for weapons if the facts available to an officer would warrant a person of reasonable caution to believe that a limited search was appropriate. Webb v. State, 269 Ark. 415, 601 S.W.2d 848 (1980). A.R.Cr.P. Rule 3.4. If for no other reason, Helms was justified in conducting a limited search to determine that the obvious bulge in Stout’s jacket was not a weapon.

The Warrantless Arrest

A law enforcement officer may arrest a person without a warrant if the officer has reasonable cause to believe that person has committed a felony. A.R.Cr.P. Rule 4.1. A determination of probable cause to arrest exists where a reasonable ground of suspicion is supported by circumstances sufficiently strong to warrant a cautious person to believe the suspect committed a crime yet the degree of proof that would sustain a conviction is not required. Ross v. State, 300 Ark. 369, 779 S.W.2d 161 (1989). The burden of demonstrating error rests on the appellant while all presumptions favor the trial court’s ruling on the legality of the arrest. Id.

In the present case, the search produced two screw drivers, a vise grip, and an abundance of coin and currency. When asked for an explanation, Stout gave an account which was not credible. Officer Helms had reasonable cause to suspect Stout could be involved in criminal conduct based on the facts then available to him and, therefore, had authority to arrest without a warrant. Too, pursuant to A.R.Cr.P. Rule 12.1 (d), a police officer who makes a lawful warrantless arrest is authorized to search the person or property of the accused to look not only for weapons but also for the fruits and instrumentalities of crime. Even if the fruits and instrumentalities of any other crime are found, those are properly seized. Holmes v. State, 262 Ark. 683, 561 S.W.2d 56 (1987). Thus, all evidence collected at the scene was also admissible.

The Inventory Search

“It is now beyond serious dispute that inventory searches are recognized as an appropriate and necessary exception to the warrant requirement of the Fourth Amendment.” Thomas v. State, 303 Ark. 210, 214-215, 795 S.W.2d 917, 918 (1990) [citing Colorado v. Bertine, 479 U.S. 367 (1987)]. The inventory is for the mutual protection of the suspect and the police. Id.

Here, where both the investigative stop and frisk, plus the warrantless arrest, were reasonable, it was entirely proper for police officers to inventory Stout’s personal property. The evidence procured from this well established procedure was properly admitted.

II

THE SUFFICIENCY OF THE EVIDENCE

Stout was convicted of breaking or entering the Spot-Not Car Wash, two counts of burglary of the Southside Kindergarten Center and of Rogers High School, escape in the second degree and violation of the Habitual Offenders Act. Stout maintains there was insufficient evidence produced to support his convictions because there was no evidence that entry had been gained into either of the coin machines and the only connection between Stout and the burglar alarm was his presence at the car wash.

Breaking or Entering

Appellant argues, first, that entry was never achieved into the coin machine at the south automatic car wash bay and was never even attempted into the change machine inside the cabinet and, second, the circumstances did not establish by substantial evidence that it was the appellant who had been tampering with the machines at the car wash.

Taking the arguments in reverse order, the appellant was discovered at 3:05 a.m. at the Spot-Not Car Wash within sixty seconds of the sounding of a burglar alarm triggered by the entry into the wooden cabinet. Appellant gave no explanation for his presence at the car wash without a car at that unusual hour, except that his car had broken down in Eureka Springs and he was walking home. Tools useable for burglary were found on the ground and shoe prints similar to the shoes worn by appellant were found in the snow near the tools and by the money machines. Appellant had some $38 in nickels, dimes and quarters in his pockets, as well as two screw drivers and other articles shown to have been stolen earlier at nearby schools. Finally, appellant gave the police an implausible explanation for his presence at the car wash. We regard these circumstances as sufficient, to support an inference that the appellant was engaged in breaking into the machines when apprehended by the police.

Turning to the issue of entry, Ark. Code Ann. § 5-39-202(a) (1987) provides:

A person commits the offense of breaking or entering if for the purpose of committing a theft or felony he enters or breaks into any building, structure, vehicle, vault, safe, cash register, money vending machine, product dispenser, money depository, safety deposit box, coin telephone, coin box, or other similar container, apparatus, or equipment.

We agree with appellant that there was no evidence that either the change machine inside the cabinet or the coin machine on the south wall had been broken into. Officers Helms and Mallory testified as to what they found at the scene, but neither supplied evidence of entry. The sum and substance of their testimony was that the cabinet door lock was pried loose and the coin machine bore scratch marks. The parties stipulated to the fact that the left side of the coin machine was bent outward, but there is no indication that that stipulation, which seems to have been related to the suppression hearing, was presented to the jury.

We believe from the wording of the statute a violation occurs when a container of the sort described in the statute is sufficiently broken or altered so that the contents or inner works of the device become accessible to entry of any kind. Whether coins or money are actually removed is irrelevant. We do not regard mere scratch marks on a machine as constituting a violation. Even when we give the evidence its highest and strongest probative force there is nothing from which to conclude that a breaking had occurred cognizable under the statute.

The Burglaries

To sustain a conviction for burglary, the state must present evidence that a person “enters or remains unlawfully in an occupiable structure of another person with the purpose of committing therein any offense punishable by imprisonment.” Ark. Code Ann. § 5:39-201 (1987). While conceding that Rogers High School and Southside Kindergarten Center are “occupiable structures” within the meaning of the statute, Stout argues that the state failed to prove that (1) he entered the buildings, and (2) he possessed the requisite mental state.

The inventory of Stout’s personal property, including a “Good Teacher” key ring, led the police officers to inspect nearby schools. Upon arrival at Rogers High School, Officer Riggs found the cafeteria door had been broken into and the door plate on the boiler room door had been removed. The south doors to the Kindergarten Center had been broken into and footprints, with the same tread pattern discovered at the car wash, were found outside the door. That door was open. Inside the building the officers observed pry marks on both doors to an office. Desk drawers were open and items were scattered over the floor. In the secretary’s office a change drawer was open and a metal money box in the storage room was empty. Ray Roney, a representative of the schools, identified the screw drivers found on Stout as belonging to him. Roney identified the “Good Teacher” key ring as the key to the school’s Coke machine. Karen Bennham, the elementary principal at the Kindergarten Center, testified that between $125 and $130 was missing from the secretary’s desk. Jimmy Masner, head custodian of Rogers School System, testified that “Little Debbie” cookie wrappers were lying on the cafeteria floor after the break-in, yet the floor was clean when he left work that evening. The cookie wrappers were identical to the wrapper of the brownies found on Stout.

We have consistently held that possession of recently stolen property is prima facie evidence of guilt of burglary of the party in whose possession the property is found, unless it is satisfactorily accounted for to the jury. Lane v. State, 288 Ark. 175, 702 S.W.2d 806 (1986); Jacobs v. State, 287 Ark. 367, 699 S.W.2d 400 (1985); Ward v. State, 280 Ark. 353, 658 S.W.2d 379 (1983); Williams v. State, 258 Ark. 207, 523 S.W.2d 377 (1975). This is so even if there is no direct evidence of breaking or entering by the appellant, Jacobs, supra, and when there is no other evidence to show the appellant had committed the crimes with felonious intent. Williams v. State, supra.

Such evidence raises no presumption of law as to guilt of the accused, but only warrants an inference of fact, of more or less weight according to the particular circumstances of each case, which the jury may draw therefrom as to his guilt. It makes a question for the jury, and is sufficient to warrant conviction where it induces in the minds of the jury a belief, beyond a reasonable doubt, of the guilt of the accused.

Lane v. State at 178; 702 S.W.2d at 807.

There was substantial evidence in this case from which a jury could reasonably infer that Stout was guilty.

Second Degree Escape

Stout maintains the state failed to prove that Benton County Jail is a correctional facility within the meaning of our Second Degree Escape Statute. Ark. Code Ann. § 5-54-101(1) (1987) defines a correctional facility as “any place used for the confinement of persons charged with or convicted of an offense or otherwise confined under court order.” A jail is defined as “. . .a prison; a building designated by law, or regularly used, for the confinement of persons held in lawful custody. . .” Black’s Law Dictionary 748 (5th ed. 1979).

There was testimony by law enforcement officers that Stout was an inmate of the Benton County Jail. On June 26,1989, he escaped through an outdoor recreation room, and he was not lawfully released from custody. There was also testimony by the officer who took him back into custody and returned him to the jail. While the state did not put on specific testimony that the Benton County Jail was a correctional facility, logic and common sense fully sustain an inference to that effect.

For the reasons stated, the judgment is reversed as to the conviction for breaking or entering and that charge is dismissed; with that exception the judgment and conviction are affirmed.