text:
    Willie James LONG v. STATE of Arkansas
    CR 73-169
    508 S.W. 2d 47
    Opinion delivered April 22, 1974

      Butler and Hicky, for appellant.

      Jim Guy Tucker, Atty. Gen., by: Richard Mattison, Asst. Atty. Gen., for appellee.
   Carleton Harris, Chief Justice.

Willie James Long, appellant herein, was convicted of possessing marijuana with intent to sell or transfer, and on trial by the jury was convicted, sentenced to five years imprisonment in the Department of Correction and fined the sum of $750.00. From the judgment so entered in accordance with this verdict, appellant brings this appeal. For reversal, three points are asserted, but since the first is dispositive of the case, there is no need to discuss the last two points. It is asserted that the trial court erred in overruling Long’s motion to suppress evidence illegally obtained and in admitting the evidence seized by the police officers into the trial.

The proof reflects that Lt. Dave Parkman of the Forrest City Police Department, on Saturday morning, May 5, 1973, received information from an informant that marijuana was being concealed or possessed at the home of Willie James Long for the purpose of sale and that it was being sold at this residence. Parkman testified that on the previous night, he (together with an un-named officer or officers) had observed an automobile stop at the Long home, remain parked for a while, and when the automobile was later driven away, the officer arrested some occupants of the vehicle for possession of illegal firearms; some marijuana was also found by the side of the car that one of the occupants had thrown from the automobile; Parkman said he was informed that the marijuana came from the Long house. However, he did not know which occupant threw the marijuana out of the vehicle and no arrest was made on a charge of possessing marijuana. He stated that the officers were too busy Friday night to “follow up” on this matter, and the next morning, he got hold of the informant who had proven himself reliable in the past, and this informant advised that marijuana was being kept at appellant’s home and was being sold from the residence. Parkman then testified that he endeavored to locate Judge Wilkinson, the municipal judge, for the purpose of obtaining a search warrant, but was told by the judge’s wife that he was out of town. He said there was no circuit judge in Forrest City, and to his knowledge, no justice of the peace who exercised judicial authority. The officer said that he then called the deputy prosecuting attorney and was advised by that official to proceed with the investigation, and if necessary, to make a search. Officer Parkman and Sgt. Carmichel of the Forrest City Police Department, about 11:30 A.M., went to the Long residence and knocked on the door, which was answered by appellant. Upon learning that the occupant who opened the door was Long, the officers identified themselves and Parkman said he was asked to “step in”. They went inside and Parkman told appellant that he was there to search for marijuana, but had no search warrant since the city judge was out of town. “I believe I told him he would be taken to the station or would be arrested, I don’t remember the words I used, but I advised Officer Carmichel to give him his rights.” In response to a question by the deputy prosecuting attorney, the officer stated that he then considered Long to be under arrest. Appellant was told that the officers were there to search for marijuana, but Long objected to this being done without a search warrant; nonetheless, Parkman proceeded to search the residence, leaving Long in the front room with Officer Carmichel and two other men who were visitors in the Long home at the time. The officer stated that he searched four rooms of the house, the kitchen, the bathroom, the living room, and the bedroom. He said the two main searches were conducted in the bathroom and kitchen, and while he was conducting the search, there was a disturbance in the front part of the house by one of the visitors, and Parkman took this man out and placed him in the police car. He then returned and finished his search, finding an Avon powder box in the bathroom which contained a substance that appeared to be marijuana. Sgt. Carmichel corroborated the testimony of Parkman. A later analysis established the substance to be marijuana, and Long was then charged with the aforementioned offense. Prior to trial, a motion to suppress this evidence was presented in chambers to the court, and evidence taken, but the court overruled the motion and permitted the testimony and the exhibit to go into the record.

Unquestionably, the court erred in its ruling. Admittedly, the officers did not possess a search warrant; admittedly, there was objection to the search being conducted without a search warrant, such objection being made prior to the search. The only justification for this search argued by the State was that it was incidental to a lawful arrest. We need not discuss whether there was probable cause for the arrest, for this search was clearly illegal. In Terry v. Ohio, 392 U. S. 1, the United States Supreme Court emphasized that “the police must, whenever practicable, obtain advance judicial approval of searches and seizures through the warrant procedure.” In Davis v. Mississippi, 394 U.S. 721, a search undertaken by an officer in a “stop and frisk” case was sustained because it was held to be no more than a protective search for weapons, but in Sibron v. New York, 392 U.S. 40, the court held that a policeman’s action in thrusting his hand into a suspect’s pocket was unlawful and illegal, being neither motivated by, nor limited to the objective of protection; rather, the search had been made in order to find narcotics, which were found. In Chimel v. California, 395 U.S. 752 (1968), which is particularly pertinent to the case at hand, the court said:

“When an arrest is made, it is reasonable for the arresting officer to search the person arrested in order to remove any weapons that the latter might seek to use in order to resist arrest or effect his escape. Otherwise, the officer’s safety might well be endangered, and the arrest itself frustrated. In addition, it is entirely reasonable for the arresting officer to search for and seize any evidence on the arrestee’s person in order to prevent its concealment or destruction. And the area into which an arrestee might reach in order to grab a weapon or evidentiary items must, of course, be governed by a like rule. A gun on a table or in a drawer in front of one who is arrested can be as dangerous to the arresting officer as one concealed in the clothing of the person arrested. There is ample justification, therefore, for a search of the arrestee’s person and the area ‘within his immediate control’ — construing that phrase to mean the area from within which he might gain possession of a weapon or destructible evidence.
There is no comparable justification, however, for routinely searching any room other than that in which an arrest occurs — or, for that matter, for searching through all the. desk drawers or other closed or concealed areas in that room itself. Such searches, in the absence of well-recognized exceptions, may be made only under the authority of a search warrant. [Our emphasis] The ‘adherence to judicial processes’ mandated by the Fourth Amendment requires no less.”

Here, there is no contention that the officers suspected Long of possessing a gun or other weapon, and of course, the search was not confined to the area in which Long (or even one of his guests might have reached in order to grab a weapon or evidentiary items. It follows there was no justification for this search without a search warrant, and the court erred in not suppressing this evidence.

Reversed and dismissed.


source: Caselaw Access Project

author: George Rose Smith, Justice.

license: Public Domain

text:
    Howard WILLIAMS v. Bill F. WALKER
    73-292
    508 S.W. 2d 52
    Opinion delivered April 22, 1974

      M. D. Anglin, for appellant.
    No brief for appellee.
   George Rose Smith, Justice.

In this action for property damage caused by negligence, the trial court directed a verdict for the defendant at the close of the plaintiff’s proof. The only question here is whether the plaintiff adduced any substantial evidence of negligence on the part of the defendant. We agree with the trial court’s conclusion that there was no such evidence for the jury.

The dispute is between landlord and tenant. In 1971 the appellee Walker leased to the appellant Williams a chicken house on Walker’s property near Berryville. The tenant improved the leased building, moved equipment into it, and used it in his auction sales business. On the morning of March 6, 1972, an hour or two after midnight, the structure was destroyed by fire.

Williams, the tenant, brought this action for damages, asserting that Walker, after discovering the fire, negligently failed to notify the Berryville fire department in time for the fire to be put out. There was also an allegation that Walker’s conduct amounted to gross negligence, entitling the plaintiff to punitive damages. The question, however, is still whether Williams proved his assertion of actual damage caused by ordinary negligence; because “the recovery of exemplary damages is dependent upon the recovery of actual damages.” Kroger Gro. & Baking Co. v. Reeves, 210 Ark. 178, 194 S.W. 2d 876 (1946).

The issue raised by Williams’ complaint was whether Walker negligently failed to report the fire promptly, but Williams’ evidence was not pertinent to that issue of negligence. Instead, the testimony indicated that Walker may have started the fire deliberately — a charge not asserted in the complaint. It was shown that Walker had tried to terminate his tenant’s lease, that there had been ill feeling and litigation between the parties, that Walker had increased his fire insurance coverage shortly before the fire, and that he had removed a valuable freezer from the leased building a few hours before it burned.

Obviously the facts just mentioned would not have indicated to the jury that Walker carelessly failed to report the fire as soon as he discovered it or should have discovered it. It is shown that the building was burning at one o’clock, and that Walker called the fire department at one thirty, but there are no facts showing that the delay was due to negligence. There is no testimony, for example, to show that the building in question could have been seen from Walker’s house, some 225 to 250 feet away, that Walker’s bedroom was so placed as to afford a view of the fire, or that Walker in fact knew of the blaze before he reported it. Perhaps even more important, there is no proof that the building could have been saved even in part if the firemen had been notified 30 minutes earlier. Upon the proof the jury could have engaged only in speculation about the vital issue in this case — whether Walker negligently delayed reporting the fire after its discovery. In the circumstances the trial court’s only course was to direct a verdict for the defendant.

Affirmed.


author: Lyle Brown, Justice.

text:
    Olen DAGGS v. BOONEVILLE SCHOOL DISTRICT NO. 65
    73-305
    508 S.W. 2d 46
    Opinion delivered April 22, 1974

      Dale W. Finley, for appellant.

      C. Richard Lippard, for appellee.
   Lyle Brown, Justice.

Appellant Olen Daggs held a one-year contract of employment with appellee. The contract went into effect July 1, 1971. He was discharged September 30, 1971. Appellant sued for the balance of his salary under the contract and a jury denied him recovery. For reversal appellant alleges one error, namely, the court erred in permitting testimony concerning appellant’s alleged misconduct occurring prior to the contract sued upon.

Appellant was employed as the auto mechanic for the school district. “His duties were to keep the buses in good repair, assist and cooperate with the drivers and co-workers, report and correct various troubles, and to have a good working relationship with his co-workers.” One of appellant’s co-workers was Tom Brown. On September 27, 1971, Tom Brown reported to the superintendent he was going to quit because of a run-in with appellant. Superintendent Underwood called appellant into the office. Underwood testified that in the four and one-half years just passed, there had been five employees working with appellant and all of them quit, each complaining about appellant’s attitude toward them. About the conference on September 27, the superintendent testified: “I told Mr. Daggs that we had a problem, and that he would have to stop doing and saying things and get along with the people I hired. He would have to quit making cutting remarks to other employees. He said he could get a better job before the sun went down. I told him that he couldn’t continue working for the school unless he stopped these things and Mr. Daggs then stated that he didn’t care whether he worked for the school or not.I then told him he was dismissed.”

Over the objection of appellant, the superintendent was permitted to relate the problems between appellant and the five former employees heretofore mentioned. Since those experiences occurred prior to the work contract beginning July 1, 1971, appellant contends they were inadmissible. Appellant insists the contract dated July 1 was entered into with full knowledge of all events of the past and therefore the purported misconduct was waived.

We think appellant’s argument is without merit. According to appellee School District, appellant was stubborn and high tempered. The jury was entitled to know of those past experiences because it would shed light on appellant’s run-in with Tom Brown on September 27. Principally, the past encounters tended to show that the experience of September 27 was not an isolated event but one which was typical of appellant’s behavior. Appellant did not ask that the jury be instructed that appellant could not be discharged for events occurring prior to July 1, 1971.

Affirmed.


author: John A. Fogleman, Justice.

text:
    Moses SMITH v. STATE of Arkansas
    CR 74-5
    508 S.W. 2d 54
    Opinion delivered April 22, 1974

      Robert A. Newcomb, for appellant.

      Jim Guy Tucker, Atty. Gen., by: O. H. Hargraves, Dep. Atty. Gen., for appellee.
   John A. Fogleman, Justice.

Moses Smith was charged with the crime of murder in the first degree by information filed June 3, 1970. After having been found guilty of murder in the second degree by a jury on June 28, 1971, he was sentenced to 17 years in the penitentiary. Commitment was issued on June 29, 1971. On February 9, 1973, Circuit Judge John Goodson received a handwritten “Motion for Recovery of Jail Time Pursuant to Chapter 12, Section 153, Page 112, Paragraph 3, Arkansas Criminal Procedure Manual.” In it Smith sought to be credited with 393 days spent in jail prior to his being sentenced, alleging that he was incarcerated from June 2, 1971, to June 28, 1972. This motion was denied by the circuit judge on March 22, 1973, without a hearing. Of course, the circuit court had no jurisdiction to alter the sentence, after appellant had been committed and entered upon its execution. Emerson v. Boyles, 170 Ark. 621, 280 S.W. 1005. In the order, the circuit court specifically found that time for which credit was sought was time spent in jail prior to determination of guilt rather than prior to pronouncement of sentence and that all delays in the period before trial were at the request of Smith, “including the exemption for legislative immunity of his employed counsel.”

On October 19, 1973, appellant, proceeding more appropriately, filed a motion to vacate his sentence under Criminal Procedure Rule No. 1. He was represented in this proceeding by the designated Attorney for Inmates at the Arkansas Department of Corrections. In this motion, he alleged that he was arrested on June 2, 1970, and remained in custody until June 28, 1971, when he was sentenced for the full 17-year term fixed by the jury. He asserted that the failure to give him credit for the time he spent in jail, without bond, awaiting trial, violated his rights under the Constitution of the United States. This motion was denied by a different circuit judge who presides over the Second Division of the Circuit Court of Clark County, Arkansas, on October 22, 1973, also without a hearing. The court found, and the record discloses, that the period of incarceration was that alleged in the second motion. This judge held that giving credit for jail time amounts to a reduction in sentence and lies within the sound discretion of the court, and that there had been no “allegation or offer” that the court had abused its discretion. The court gave no consideration to appellant’s contention that failure to give him credit for time he was incarcerated while awaiting trial violated the “due process” and “equal protection” clauses of the Fourteenth Amendment to the United States Constitution.

No doubt the circuit judge who denied relief under Criminal Procedure Rule No. 1 was acting, with some justification, in reliance upon our statute digested as Ark. Stat. Ann. § 43-2813 (Supp. 1973) and our decisions in such cases as Harper v. State, 249 Ark. 1013, 462 S.W. 2d 847, and Kimble v. State, 246 Ark. 407, 438 S.W. 2d 705. See also, Shelton v. State. 255 Ark. 932, 504 S.W. 2d 348 (1974).

We do not seem to have given any direct treatment, however, of the constitutional question posed when an indigent is held in jail without bond pending trial. Our statute does not appear to be unconstitutional upon its face. It has long been recognized, apparently without question, that, in the absence of a statute providing otherwise, the allowance of credit for this time is discretionary with the trial court. 24B C.J.S. 644, Criminal Law, § 1995(5). See also, Gross v. Sarver, 307 F. Supp. 1105 (D. C. Ark. 1970). But if the statute is applied in a manner which denies equal protection of the laws or due process of law to an indigent, the application might well be in violation of the Fourteenth Amendment to the United States Constitution. See Williams v. Illinois, 399 U.S. 235, 90 S. Ct. 2018, 26 L. Ed. 2d 586 (1970). While we may be soon called upon to determine whether such an application of the statute does violate these constitutional provisions, this case cannot afford the vehicle for a definitive holding on this question, for reasons hereafter stated.

The United States Supreme Court has not treated the question directly. Although we need not speculate upon that court’s answer whenever it is directly confronted with the question, we find several decisions of that court which seem unequivocally to point the way to the proper approach to the constitutional issues.

First, there are the cases requiring that, in order to meet Fourteenth Amendment due process and equal protection demands, indigent defendants must be afforded review as adequate and effective as that given one financially able by providing free transcripts and other means of presenting their contentions to the appellate court which are as good as those available to a nonindigent defendant with similar contentions. Griffin v. Illinois, 351 U.S. 12, 76 S. Ct. 585, 100 L. Ed. 891, 55 A.L.R. 2d 1055 (1956); Eskridge v. Washington State Board of Prison Terms and Paroles, 357 U.S. 214, 78 S. Ct. 1061, 2 L. Ed. 2d 1269 (1958); Draper v. Washington, 372 U.S. 487, 83 S. Ct. 774, 9 L. Ed. 2d 899 (1963).

Following Griffin, the United States Supreme Court held that refusal of access to the courts for relief by appeal or petition for habeas corpus by reason of inability of an indigent prisoner to pay filing fees was a denial of equal protection of the laws to him. Burns v. Ohio, 360 U.S. 252, 79 S. Ct. 1164, 3 L. Ed. 2d 1209 (1959); Smith v. Bennett, 365 U.S. 708, 81 S. Ct. 895, 6 L. Ed. 2d 39 (1961). In Rinaldi v. Yeager, 384 U.S. 305, 86 S. Ct. 1497, 16 L. Ed. 2d 577 (1966), it was held that once avenues of appellate review have been established by a state, they must be kept free of unreasoned distinctions that would impede open and equal access to the courts by indigents.

In Gideon v. Wainwright, 372 U.S. 335, 83 S. Ct. 792, 9 L. Ed. 2d 799, 93 A.L.R. 2d 733 (1963), the court held that the Sixth Amendment right to counsel was so fundamental and essential to a fair trial that it was made obligatory upon the states by the Fourteenth Amendment, overturning the decision in Betts v. Brady, 316 U.S. 455, 62 S. Ct. 1252, 86 L. Ed. 1595 (1945), that refusal to appoint counsel for an indigent defendant did not necessarily violate the due process clause of the Fourteenth Amendment. On the same day Gideon and Draper were decided, the court handed down its opinion in Douglas v. California, 372 U.S. 353, 83 S. Ct. 814, 9 L. Ed. 2d 811 (1963), reh. denied 373 U.S. 905, 83 S. Ct. 1288, 10 L. Ed. 2d 200 (1963), in which it was held that failure to appoint counsel for an indigent on an appeal, granted as a matter of right, constituted an invidious discrimination and denial of due process in violation of the Fourteenth Amendment.

Then there are the cases in which imprisonment of indigent persons has been held to violate the Fourteenth Amendment whenever it results from financial inability of the indigent to pay fines or court costs. In Williams v. Illinois, 399 U.S. 235, 90 S. Ct. 2018, 26 L. Ed. 2d 586 (1970), it was held that continuing an indigent person in custody beyond the maximum statutory term for the offense for which he was committed because of his involuntary failure, due solely to his indigency, to satisfy monetary portions of his sentence constituted impermissible discrimination resting on ability to pay and violated the equal protection clause. Subsequently, in Tate v. Short, 401 U.S. 395, 91 S. Ct. 668, 28 L. Ed. 2d 130 (1971), the court held that imprisonment of one punished only by fine solely because of his inability to pay the fine due to indigency was also a violation of the equal protection clause.

The basic purpose of the United States Supreme Court in these cases finds expression in Williams v. Illinois, supra, where the court, speaking through Chief Justice Burger, said:

In the years since the Griffin case the Court has had frequent occasion to reaffirm allegiance to the basic command that justice be applied equally to all persons. Subsequent decisions of this Court have pointedly demonstrated that the passage of time has heightened rather than weakened the attempts to mitigate the disparate treatment of indigents in the criminal process.

Every instance, in which a statute or its application works an invidious discrimination by visiting different consequences upon two categories of persons solely because of one’s financial inability has resulted in a finding that the Fourteenth Amendment had been violated. We find nothing in McGinnis v. Royster, 410 U.S. 263, 93 S. Ct. 1055, 35 L. Ed. 2d 282 (1973), which dilutes the impact of prior decisions based upon disparity of treatment of the rich and the poor.

The principles leading to these results have been applied in many courts to require that pretrial confinement be credited upon a sentence imposed on conviction, where the person sentenced was without the means to provide bail in a reasonable amount. See, e.g., Ham v. North Carolina, 471 F. 2d 406 (4th Cir. 1973). These standards and requirements vary from jurisdiction to jurisdiction and are sometimes based upon statutes.

We can agree with appellant that there is no rational basis for distinguishing between a prisoner who is forced to remain in prison after completion of his sentence because of indigency and one who must remain in jail prior to his trial solely because of indigency. Financial inability to post bond should not cause an indigent to spend more time in confinement than one whose wealth enables him to be admitted to bail. Denial of credit for pretrial custody necessitated by financial inability to make bail has been held violative of the equal protection clause of the Fourteenth Amendment in numerous cases. See, e.g., United States v. Gaines, 449 F. 2d 143 (2nd Cir. 1971); Steele v. North Carolina, 348 F. Supp. 1023 (D.C. N.C. 1972); State v. Rawlings, 34 Ohio App. 2d 63, 295 N.E. 2d 679 (1973); Mallory v. State, 31 Ohio Misc. 113, 281 N.E. 2d 860 (1972); Parker v. Bounds, 329 F. Supp. 1400 (D.C. N.C. 1971). We find language in Culp v. Bounds, 325 F. Supp. 416 (D.C. N.C. 1971), particularly descriptive of our feelings in the matter. That court, following the same guideposts we find in United States Supreme Court decisions, said:

* * * the state’s refusal to give Culp credit for pre-trial detention is an unconstitutional discrimination on the basis of wealth prohibited by the Fourteenth Amendment. As outlined above, wealthy defendants (except where no bail is allowed) are able to remain out of prison until conviction and sentencing; the poor stay behind bars. While such a situation may often be compelled by the present (especially state) bail procedures, it should not be compounded by refusal to credit prisoners in Culp’s situation with time incarcerated prior to trial and commitment. Such a distinction, which, in effect, provides for differing treatment on the basis of wealth, is unconstitutional absent some “compelling governmental interest.”

We find no merit in the argument sometimes advanced that pre-sentence jail time should not be credited because it is not “punishment.” Whatever it may be called, it is certainly a deprivation of liberty, which, in itself, is punishment to most human beings. We should not like to try to convince those held in such confinement, along with those undergoing punishment, of the soundness of such an argument. We reject it, as other courts have. In re Young, 32 Cal. App. 3d 68, 107 Cal. Rptr. 915 (1973); Parker v. Bounds, 329 F. Supp. 1400 (D.C. N.C. 1971).

We think the result appellant seeks would be clearly indicated if he had been held in confinement before trial solely because of his indigency. But this is not the case. Although petitioner argues vigorously that discrimination in the matter of jail-time credit because of indigency violates the Fourteenth Amendment, he does not even allege that he was unable to make bail because of indigency. The record clearly reveals that this was not the case. He was arrested, informed against and tried upon a charge of first degree murder. This offense was not bailable until the decision in Furman v. Georgia, 408 U.S. 238, 92 S. Ct. 2726, 33 L. Ed. 2d 346 (1972), exactly one year after Smith’s trial, unless the circuit court had been satisfied, after a hearing, that the proof of first degree murder was not evident and the presumption not great. Constitution of Arkansas, Art. 2, Sec. 8; Fikes v. State, 221 Ark. 81, 251 S.W. 2d 1014; State v. Williams, 97 Ark. 243, 133 S.W. 1017; Parnell v. State, 206 Ark. 652, 176 S.W. 2d 902; Carr v. State, 93 Ark. 585, 122 S.W. 631. See also, Bass v. State, 29 Ark. 142.

The official accusation by information of the prosecuting attorney was sufficient justification for holding appellant in custody until his entitlement to bail was established. Fikes v. State, supra. The filing of the information raised a presumption of appellant’s guilt for the purpose of arrest, detention and trial sufficient to preclude him from the right of bail until it was rebutted by an affirmative showing on his part. State v. Williams, supra. Since the offense was not bailable, there was no invidious discrimination against Smith because of indigen-cy, and the authorities hereinabove cited lend him no aid.

He argues, however, upon the authority of Ham v. North Carolina, 471 F. 2d 406 (4th Cir. 1973); White v. Gilligan, 351 F. Supp. 1012 (1972); and Workman v. Cardwell, 338 F. Supp. 893 (1972), that he is, nevertheless, entitled to the credit. We do not agree. We do not consider the district court cases as authoritative. But in Workman the result was reached solely on the ground of the indigency of the petitioner. Even so, that portion of the ruling was vacated on appeal. Workman v. Cardwell, 471 F. 2d 909 (6th Cir. 1972). In White, the district court was unable to find any legitimate state interest in an Ohio statutory scheme under which those who remained free prior to conviction received full credit for all periods of confinement while those held in jail prior to conviction did not. The action was heard by a three-judge, district court on a petition for declaratory and injunctive relief on behalf of a class of all inmates of the Ohio penal system who remained in jail prior to trial because of financial inability to post bail bonds. The petitioners asserted that the statutes were unconstitutional because of discrimination against the poor in violation of the equal-protection clause of the Fourteenth Amendment. A due process contention was rejected. Credit was allowed in Ham only on the basis of the prisoner’s in-digency. Appellant can take no comfort from the holding there that a statute providing for pre-sentence jail time credit in cases tried after its effective date was- palpably unconstitutional because of its own limitation to prospective application.

We cannot honor this argument. The Supreme Court of the United States has clearly recognized that classifications in this regard based upon legitimate state purpose may be valid as against assertions of violation of the Fourteenth Amendment. McGinnis v. Royster, 410 U.S. 263, 93 S. Ct. 1055, 35 L. Ed. 2d 282 (1973). See also, Culp v. Bounds, 325 F. Supp. 416 (D.C. N.C. 1971), where the court emphasized the absence of a compelling state interest in the situation. There is no invidious discrimination when certain classes of offenders are held without bail for valid state purposes or where the incarceration is not, without valid reason, discriminatory against a particular category of persons. The equal protection clause does not require things which are different in fact to be treated in law as though they were the same, so states may impose special burdens upon defined classes in order to achieve permissible ends. Rinaldi v. Yeager, 384 U.S. 305, 86 S. Ct. 1497, 16 L. Ed. 2d 577 (1966). The compelling state interest in this and other capital cases which are not bailable was well articulated in Carr v. State, 93 Ark. 585, 122 S.W. 631, and reiterated in Parnell v. State, 206 Ark. 652, 176 S.W. 2d 902. We said:

We should also not lose sight of the provision of the Constitution which declares that persons shall not be bailable in capital cases “when the proof is evident or the presumption great,” and the object of bail, which is to secure the attendance of the prisoner.
In cases where it will not in all probability be sufficient for that purpose, it should be denied, and that is in capital cases where the proof is evident or the presumption great. In such cases the temptation to forfeit the bail in preference to endangering life by a trial might be beyond resistance.

It has been recognized, at least tacitly, that a distinction may be made on the basis of offenses not bailable. See, e.g., United States v. Gaines, 449 F. 2d 143 (2nd Cir. 1971); Parker v. Bounds, 329 F. Supp. 1400 (D.C. N.C. 1971); Culp v. Bounds, 325 F. Supp. 416 (D.C. N.C. 1971). See also, Stapf v. United States, 367 F. 2d 326 (D.C. Cir. 1966). We think that the distinction between bailable and nonbailable offenses as to pretrial confinement credit is a constitutionally permissible and proper one. The reasons why one should be held in confinement prior to trial on a nonbailable offense are the same regardless of his wealth or poverty, and the reason for such detention serves a proper state purpose.

We have given no consideration to those cases where the “double jeopardy” constitutional prohibitions have controlled, because Smith’s sentence is neither a maximum nor a mandatory minimum punishment, and he, appropriately enough, did not argue that these provisions had been violated.

We find no error in the denial of appellant’s petition without a hearing because the record in the case clearly shows that he was not entitled to relief. Accordingly, the judgment is affirmed.

        See Upton v. Graves, 255 Ark. 516 (November 13, 1973).


author: Frank Holt, Justice.

text:
    The BUCKEYE CELLULOSE CORPORATION v. John W. VANDAMENT
    73-266
    508 S.W. 2d 49
    Opinion delivered April 22, 1974

      Davis, Plegge, Lowe & Whitmore and Wright, Lindsey & Jennings, for appellant.

      Tom Gentry and James L. Sloan, for appellee.
   Frank Holt, Justice.

Appellee, an electrician, was injured when he fell from a ladder due to an electrical shock caused by appellant’s asserted negligence. Appellee suffered a laceration of the left elbow, a severe low back pain, and a comminuted fracture of the left heel bone. He was hospitalized about ten days during which time an operation was performed on his foot. Evidence was adduced that the foot injury resulted in a 30% disability to the left leg below the knee which disabled him from performing further work as an electrician except part time electrical work on level surfaces. He used crutches about two months ánd now uses a cane at times to walk. He experiences psychological electric shock when he showers and pain when he walks as far as one block. He was 64 years of age with a life expectancy of 13 years, Ark. Stat. Ann. § 50-705 (Repl. 1971). At the time of the injury, he was earning $300 a week, including overtime. It appears that he seldom missed a day’s work and regularly worked a 50 week year. There were fellow employees who were in their late 70’s. Appellee’s medical bills totaled $2,171.77. A jury awarded appellee $157,500.

For reversal appellant contends that the “court erred in not granting appellant’s motion for a mistrial because of improper and prejudicial remarks made by appellee’s counsel in his closing argument to the jury, [and] concurred in by the trial judge” and also that the verdict is excessive. During appellee’s closing argument the following occurred:

[Appellee’s attorney]
No, ladies and gentlemen of the jury, this is the only chance Mr. Vandament is going to have to put his case before a jury of his peers, this is his last chance, he can’t come back and we ask you when you go out there in that jury room that if you decide the amount and there’s some argument about how much, we ask you to decide the larger amount because his Honor there, if you give him too much, can cut it down, but if you give him too little, he can’t increase it.
Ladies and gentlemen of the jury, I sincerely appreciate the two days I’ve been over here with you and the attention and courtesies and respect which you have shown to the Court and to all of us. Thank you very much.
THE COURT:
The request has been made that the Court instruct the jury to disregard the remarks about the court having authority to reduce the verdict. I suppose it is improper argument, it is the law but probably is not a proper argument to present to the jury. In any event, you are instructed to disregard it.
THEREUPON,
IN CHAMBERS, while the jury was deliberating in the jury room, the following motion was made:
[Appellant’s attorney]
The defendant would like to move that the Court declare a mistrial on the grounds that the argument of counsel was extremely prejudicial in that he asked the jury to give an extraordinary and unusually large amount of money with the view toward having thejudge reduce it, that was a grossly improper argument and was highly prejudicial to this defendant and I would like to have a mistrial.
THE COURT:
Overruled.

We must agree with appellant that the remark to the jury was prejudicial and the court’s ruling was insufficient to correct its impact. It is true that a trial court is accorded great latitude in correcting any prejudicial effect of argument by counsel and we do not reverse unless it appears manifest that prejudice resulted from the improper argument and the court’s admonition, if given, is not sufficient to eliminate and remove from the jurors’ minds the possibility of that effect. Martin v. Langley, 252 Ark. 121, 477 S.W. 2d 473 (1972), Tri-State Transit Company of Louisiana, Inc. v. Westbrook, 207 Ark. 270, 180 S.W. 2d 121 (1944), and Missouri Pacific Railroad Co. v. Hood, 198 Ark. 792, 131 S.W. 2d 615 (1939). As early as Vaughan v. State, 58 Ark. 353, 24 S.W. 885 (1894), we said:

****[w]henever it occurs to us that any prejudice has most likely resulted therefrom, [improper argument] we shall not hesitate to reverse on that account.

There is a presumption that every error is prejudicial unless it is demonstrated otherwise, or manifestly is not. Ark. State Highway Comm'n v. Jensen, 253 Ark. 795, 489 S.W. 2d 5 (1973). Further, when we cannot say with confidence that the error is not prejudicial we reverse. Allen v. Ark. State Hwy. Comm'n, 247 Ark. 857, 488 S.W. 27 (1969). In Kansas City Sou. Ry. Co. v. Murphy, 74 Ark. 256, 85 S.W. 428 (1905), we said:

In the final analysis, the reversal rests upon an undue advantage having been secured by argument which has worked a prejudice to the losing party not warranted by the law and facts of the case. (Emphasis added.)

Justice Battle, writing for the court in Kansas City, &C., R. Co. v. Sokal, 61 Ark. 130, 32 S.W. 497 (1895), said:

Courts are instituted for the purpose of enforcing the right, and redressing wrongs, according to the laws. In jury trials, evidence is adduced for the purpose of ascertaining the truth, and instructions are given by the court to inform the jury as to the law applicable to the facts. Jurors should ascertain the truth from the evidence, and apply the law as given by the court to the facts as they find them, and return a verdict accordingly. Except as to those facts of which courts take judicial notice, juries should consider only the evidence adduced. Arguments by counsel of the evidence adduced and the law as given by the court are allowed only to aid them in the discharge of their duty. Within these limits counsel may present their client’s case in the most favorable light they can. When they go beyond them, and undertake to supply the deficiencies of their client’s case by assertions as to facts which are unsupported by the evidence, or by appeals to prejudices foreign to the case, they travel outside of their duty and right, and abuse the privilege of addressing the jury by using it for a purpose it was never intended to accomplish; for such assertions or appeals can serve no purpose except to mislead the jury and defeat the ends of the law in requiring them to confine their consideration to the evidence adduced and the law embodied in the instructions of the court. (Emphasis added.)

Therefore, even though argument of counsel is a correct statement of the law, it does not necessarily follow that counsel’s argument is proper or non-prejudicial. It is within the province of the court only to tell the jury what the appropriate rules of law are in each case. Barrow v. Bolton, 235 Ark. 595, 361 S.W. 2d 90 (1962).

The tactic of argument to the jury that the court has the authority to reduce their verdict if too large and cannot increase it if too small has received strong disapproval by other courts where that issue was presented. Cleveland Ry. Co. v. Crocks, 130 Ohio St. 255, 198 N.E. 867 (1935), Lehman v. Haynam, 104 Ohio App. 198, 147 N.E. 2d 870 (1957), and White v. Chicago,& N.W. Ry. Co., 145 Iowa 408, 124 N.W. 309 (1910). As stated in White, the argument was a “direct appeal to the jurors to forswear their duty and shift the burden to the court, and ought not to have been tolerated. The line of argument pursued, in effect, was that the jurors would be blamable if the assessment of damages were too low, while they might shirk all responsibility by putting it too high and allow the court to reduce it.”

In the case at bar, the ruling given by the court was clearly insufficient to remove the prejudicial effect of the argument even though inadvertently made. Although the court told the jury to disregard the argument, the form of his ruling was dubious and perhaps actually reinforced the prejudicial effect of counsel’s argument by telling the jury that it is the law. The jury’s duty is to impartially assess damages upon a basis of fair compensation uninfluenced by argument on a subject of law or evidence that is extraneous to the case.

In the light of what has been said, we have no alternative other than to reverse the judgment and remand the cause. We deem it unnecessary to discuss appellant’s contention that the verdict is excessive in view of a retrial.

Reversed and remanded.


text:
    Charles M. BUTLER, Guardian et al v. Garland Lavon NEWSOM, Executor
    74-8
    508 S.W. 2d 323
    Opinion delivered April 29, 1974

      Douglas Bradley and Jon R. Coleman, for appellants.

      Elbert S. Johnson, for appellee.
   George Rose Smith, Justice.

Ruffin and Rudolph Newsom were brothers whose family business, comprising farming, a cotton gin, and a store, was incorporated in 1959 as Newsom Brothers Gin Company, Inc. Ruffin had died in 1958; Rudolph died in 1972. After the latter’s death his son, the appellee Garland Lavon Newsom, was selected at a family meeting to liquidate the business, which was conceded to be in failing condition. The appellee proceeded to sell the assets, pay the corporation’s debts, and distribute what was left.

These two chancery suits, consolidated below, were brought by the appellants against the appellee individually and as the personal representative of his father’s estate. The chancellor decided both cases in favor of the appellee. The cases present separate issues which must be separately discussed.

The essential facts are not in dispute. Before Ruffin’s death the brothers operated the business as a partnership. After Ruffin’s death his widow, as the administratrix of his estate, and Rudolph, as the surviving partner, incorporated the business. A probate court order approved the exchange of the estate’s interest in the partnership for shares of stock in the corporation. Half the total stock was issued to Rudolph and the other half to Ruffin’s widow and children in proportion to their interests. Rudolph managed the company until his death in 1972.

The first of the two consolidated suits was brought against Rudolph’s estate by Ruffin's youngest child, the appellant Lisa Kay Newsom. She was one year old when the partnership was incorporated in 1959. Her stock in the corporation was then worth SI8,800, but through the years its value declined. Lisa Kay now contends, through her guardian, that she is entitled to repudiate or disclaim interest in the corporation and hold Rudolph’s estate liable for the original value of her stock, with interest from 1959.

The chancellor was right in rejecting that contention. There is, of course, no suggestion that Lisa Kay, at the age of one, was a party to a contract which she can now disaffirm. Instead, she contends that under the Probate Code and the Uniform Partnership Act the incorporation of the family business was unauthorized and therefore void as to her.

We do not so construe the statutes. The Probate Code provides that property belonging to an estate may be sold or exchanged under court order when necessary for any purpose in the best interest of the estate. Ark. Stat. Ann. § 62-2704 (Repl. 1971). The 1959 probate court order found that, owing to the complexity of the partnership business, it was to the best interest of all parties that the interest of Ruffin’s estate in the partnership be exchanged for stock in the new corporation. The probate court made no attempt to settle the partnership accounts, which distinguishes this case from our holding in Morris v. Stroude, 123 Ark. 313, 185 S.W. 451 (1916). The 1959 order was within the probate court’s authority and binding upon the beneficiaries of Ruffin’s estate.

Lisa Kay also relies upon the Uniform Partnership Act (Ark. Stat. Ann., Title 65, Ch. 1 [Repl. 1966]), under which we have held that a surviving partner who continues the partnership instead of winding it up does so at his peril. Zach v. Schulman, 213 Ark. 122, 210 S.W. 2d 124, 2 A.L.R. 2d 1078 (1948). There is a distinction, however, between continuing the partnership itself and continuing the business in which it was engaged, so long as the rights of the estate of a deceased partner are protected. The business of most partnerships, such as a law firm or a mercantile concern, is continued after the death or retirement of a partner, even though the partnership itself is dissolved. Here Rudolph, as the surviving partner, wound up the partnership by the transfer of all its assets to the corporation. Nothing in the uniform act requires either that the partnership business be terminated or that it be continued only as a partnership rather than as a corporation. Hence the appellant’s argument that Rudolph violated his statutory duty to wind up the partnership cannot be sustained.

In the second case the corporation itself asserts a claim against Rudolph’s estate. On March 1, 1967, the corporation signed a demand note to Rudolph Newsom for $41,059, with interest at 7% per annum. When Rudolph’s son, t h e appellee, liquidated the corporate business, he paid the amount of that note to himself, as executor of his father’s will, on April 19, 1972, with interest totaling $17,058.49. The corporation admits its liability for the principal debt, but it contends that it was not liable for interest on the obligation.

We agree with that contention, because the weight of the evidence shows that the parties never intended for the debt to bear interest. Through the years the various members of the Newsom families maintained running accounts with the family corporation, as for groceries and other subsistence. In 1967 the corporation obtained a loan from a federal agency, the Small Business Administration. At that time Rudolph’s account on the corporate books showed a large balance in his favor, as a result of his having deposited the proceeds from a personal real estate transaction. The SBA required that Rudolph’s claim against the corporation be subordinated to its proposed loan. To that end the note in question was executed and made subordinate to the SBA obligation.

The note was never shown on the corporate records as a debt of the corporation. To the contrary, the various family accounts were carried on the books in the same way as they had been previously. No interest was ever paid upon such accounts. Finally, the obligation, as a promissory note, was barred by limitations when Garland Lavon Newsom paid it to himself; but as a running account it was not barred, there having been debits and credits to the account. Upon the proof as a whole we are convinced that the execution of the note was simply a paper transaction required by the SBA, which did not change the character of the corporation’s indebtedness to Rudolph Newsom. The corporation is therefore entitled to recover from Rudolph’s estate the amount of the interest payment.

Affirmed in part, reversed in part, and remanded.


text:
    ARKANSAS STATE HIGHWAY COMMISSION v. ROY HORTON CHEVROLET Co.
    73-304
    508 S.W. 2d 322
    Opinion delivered April 29, 1974

      Thomas B. Keys and Kenneth R. Brock, for appellant.

      Matthews, Purlle, Osterloh & Weber, for appellee.
   Lyle Brown, Justice.

This is an eminent domain case. Appellee is a corporation operating a Chevrolet dealership under franchise in Marshall. In widening U.S. Highway 65 appellant took a five foot strip entirely across the front of appellee’s land, appellee’s business fronting on the highway. The jury awarded $12,000 and appellant here contends that the verdict is not supported by substantial evidence.

The main building of appellee houses the offices, parts area, and service department. Before the taking there was approximately 26 feet between the front of the building and the edge of the right-of-way. The area in front of the building was used for the purpose of openly displaying twelve to fifteen new cars. According to several witnesses testifying for the landowner, there was before the taking ample room for displaying those cars, even after allowance for shrubs in front of the building, an iron guard rail protecting the building, and a sidewalk. Those same witnesses testified that after the taking the only way cars could be parked in the area was to permit the front of the cars to protrude over on the highway property, with the right-of-way line coming just behind the left front wheels. The president of the corporation explained his view of the importance of a display area in front of the building, estimating that the display was responsible for 75% of the sales. In addition to the loss of the display area, appellee contends that after construction the entrance to the service department by big trucks from the west side of the building has been effectively blocked.

Gene Lair, an experienced real estate broker, appraiser, and home builder, testified for appellee as an expert. He considered the property to have a before-taking value of SI 11,500 and an after value of S78,000, a difference of $33,500. Incidentally, the before value figure was comparable to the before value figures fixed by appellant’s two appraisers. Lair used two approaches in his before value, that being the cost approach and the rental value. Then he estimated the overall damages to appellee’s investment in the land and improvements to be 30%. “After the taking, the use is limited and reduced by the fact that the west side of the building would be inaccessible and the display area will be practically useless.”

Appellant argues with considerable force that Lair improperly applied the 30% reduction in value to the land area behind the buildings which is not being utilized in the business and to the paint and body building located to the east of the main building. Appellant says there was no evidence that those components were damaged by the taking. The jury viewed the subject property. The award was $12,-000, which is slightly less than thirty percent of the depreciated value fixed on the main building. It is not unreasonable to conclude that the jury actually agreed with appellant’s argument and therefore restricted damages only to the main building.

Affirmed.


author: JOHN A. FOGLEMAN, Justice.

text:
    ARKANSAS SAVINGS & LOAN BOARD v. Jerome Kee SOUTHERLAND et al
    73-251
    508 S.W. 2d 326
    Opinion delivered April 29, 1974

      John Selig and Spitgburg, Mitchell & Hays, by. John P. Gill, for appellant.

      Stubblefield & Matthews, by: Charles I). Matthews, for appellees.
   JOHN A. FOGLEMAN, Justice.

The circuit court reversed the Arkansas Savings & Loan Board’s denial of a charter to appellees for their proposed North Central Arkansas Savings & Loan Association at Mountain View. The court’s action was based upon its finding that the decision of the board was not based upon substantial evidence. The board had found that the application met all requisites for the grant of a charter except for its findings that there was not a public need for the proposed association at the time and that the volume of business in the» area in which its business would be conducted was not sufficient to indicate a successful operation. Appellant raises questions as to the timeliness of the appeal to the circuit court by appellees and as to the correctness of the circuit court’s findings relative to public need, but we need not consider either of these questions because we find substantial evidence to support the board’s finding that the volume of business to be anticipated was not sufficient to indicate a successful operation.

In reviewing the circuit court action there are certain basic principles which must constantly be kept in mind. One of the prime requisites for the grant of a charter is a reasonable probability of a successful operation. This probability is dependent upon the volume of business to be anticipated. Ark. Stat. Ann. § 67-1824(3) (Repl. 1966). Two of the basic essentials are sufficient savings deposits and an adequate market for sound loans. In considering applications for a charter, the board carries a heavy responsibility. It is very similar to that of the State Banking Board which we had occasion to emphasize in Piggott State Bank v. State Bank Board, 242 Ark. 828, 416 S.W. 2d 291. The close relationship of the business to the public welfare requires that the state see that those who entrust their savings to these institutions are adequately protected. To that end some agency, such as this board, must be vested with broad powers and wide discretion on questions such as those presented here. White County Guaranty Savings & Loan Assn. v. Searcy Federal Savings & Loan Assn., 241 Ark. 878, 410 S.W. 2d 760. The duty of determining whether a charter should be granted is not vested in this court nor in the reviewing circuit court. That responsibility rests upon appellant, whose members presumably possess a degree of expertise in such matters. See Ark. Stat. Ann. § 67-1805 (Repl. 1966). It is the board’s duty to make certain factual determinations and the collective expertise of the board members must be respected to the extent that the judgment of the courts cannot be substituted for that of the board. The courts are concluded by the board’s findings, if they are supported by substantial evidence. Ark. Stat. Ann. § 67-1811 (Repl. 1966); Heber Springs Savings & Loan Assn. v. Cleburne County Bank, 240 Ark. 759, 402 S.W. 2d 636.

Appellees’ brief advances a persuasive argument in behalf of the application; however, it is addressed, to some extent, to the credibility of adverse witnesses, but, for the most part, to the substantiality of the evidence in support of their application and the relative weakness of the evidence of the protestants. We must reverse the trial court, however, because we find substantial evidence to support the board’s action, at least as to the anticipated volume of business.

In our review of the testimony, we find most of it to be sheer speculation and conjecture, or, at best, mere conclusions of the witnesses based not on facts of substance, but upon the usual generalities expressive of either unbounded optimism or grave doubt, depending upon the interest of the one testifying. All such testimony, of course, must be discarded in searching the record for substantial evidence. The experts. as could be anticipated, each did his best, short of outright advocacy, to support the position of the party by whom he was employed. Most of the evidence that could be considered substantial, however, came from these witnesses.

Two exhibits to the application relate particularly to the question we consider. The first is Exhibit B, entitled “Economic Data in Support of an Application for a Savings & Loan Association to be Located in Mountain View, Arkansas” as amended, and Exhibit F — “Proposed Operating Budget for the First 12 Months of Operation.” The latter indicated a gross operating income of $80,246, operating expense of $38,180, interest charges of $50,328 and a net operating loss of $8,262. The budget was based upon estimates that total savings deposited would range from $340,-000 at the end of the first month to $1,500,000 at the end of the first year. The primary service area indicated was Stone County. The secondary area included certain neighboring townships in Van Burén, Izard, and Searcy Counties.

Most of the enthusiastic predictions made by the applicants and the few witnesses in their behalf who were not proposed officers or subscribing stockholders are based upon the anticipated effect of the development of Blanchard Springs Caverns and the Ozark Folk Cultural Center, and the belief that this would produce a great increase in tourist business. There was also testimony that people were coming to the area for retirement.

Some of the evidence that affords support to the board’s finding actually came from the applicants and their witnesses. For example, there are only three motels in Stone County with a total of 40 units, but the operator of the largest had only one-half occupancy in the winter. Most of his occupancy then was by construction workers at the cultural center and the cave, both of which were nearing completion. He had no plans for expansion. A majority of the inquiries a real estate broker was “beginning” to have was for small acreages, homesites and subdivision lots for retirement sites in the applicants’ proposed service area. Most of the local construction qualifies for low income financing by Farmers Home Administration. The majority of that being done or anticipated at the time was so financed. A builder whose work was centered in Stone County did not know that a savings and loan association would help his business. Growth in the area the last few years had been rather slow, compared to the “outside” area. The operator of a Mountain View sawmill had no present plans for expansion. The Federal Housing Administration had been reluctant to consider loans in Van Burén County because of the unlikelihood of resale of houses securing loans that might become delinquent. Clinton, the Van Burén County seat, has more business connections with Conway and Morrilton that any other particular area. These nonexpert witnesses, with the exception of the one proposed as secretary of the planned association, could not or did not attempt to give any estimate or basis for estimation of the deposits which might be anticipated or the volume of loans for which the proposed institution might successfully compete. The witness proposed as secretary said that savings deposits amounting to $470,000 had been subscribed.

The owner of a craft shop engaged in the manufacture of musical instruments and the sale of handicraft products was a member of the Rackensack and vice-president of the Ozark Foothills Handicraft Guild. He did not know of any persons coming into the area to open a craft business, or of any retail operations that would be involved in the center or the caverns, other than local craftsmen, most of whom were Guild members. From reports of sales to the Guild by its 265 members, he found that the income of those engaged in the production and sale of “handicrafts” ranged from $200 to $5,000 per person per year. Although there were more sales outside the Guild than in it, he did not know of any person who made more than $5,000 per year from sales of these products. He had been in business for five years and employed five people, all of whom came from outside the area. He did not know of anyone else engaged in full-time “making crafts” in Stone County.

The general manager of the Ozark Folk Culture Center, who had lived in Mountain View for 11 years and had been its mayor for 4 years, testified that the object of the center was the preservation of the traditional folk art, crafts and music of the region. According to him, Stone County was chosen as the site of the project because its crafts and music had remained unchanged for more than 50 years due to the remoteness of the area. He did not want musicians from outside the Ozarks to come in. He anticipated that only 70 people would be employed at the Center, of which 15 would be brought in from outside the immediate area. He had seen several projections made by various study groups, including studies by the United States Forestry Service and one by the State Parks Department, but none that projected any large increase in the number of permanent residents of the area, although a tremendous influx of transitory visitors was predicted. Although he felt there would be a need for more commercial facilities, he knew of no Stone County residents developing them. By comparison with his observations of Gatlinburg, Tennessee, he guessed that they would be established by people who would live elsewhere.

The president of the Bank of Mountain View testified that the economy of the area was based principally on production of beef cattle, supplemented by a trailer business, two small factories, one employing 350 people and the other 40, and a growing tourist industry. His bank had assisted in financing one of the factories, due to the fact that all of the tax millage authorized by Constitutional Amendment 49 had been utilized. He testified that, during the first 10 months of the year (1972), only 10 loans had been made by savings and loan associations in Stone County, and that his bank had furnished the interim construction financing and processed applications on nine of them. He said the bank then had four interim construction financing commitments. The percentage of deposits in loans at the bank had decreased from 58 to 51. He pointed out that the population of Mountain View was approximately 900 in 1960 and that an increase of 600 shown by a 1965 special census was attributable to an intervening annexation to the city.

Dr. Lewis Amos, an economist at the University of Tennessee, was employed by the applicants to compile the data contained in their Exhibit B, a supplement thereto, and the proposed operating budget. He was assisted by his associate. Dr. Mark Westerland. He concluded that “There is better than a reasonable probability of success and profitability of the proposed facility.” Most of his testimony, however, was devoted to demonstration of a public need. He made the general statement that the gross amount of loan business was growing in the service area and could be expected to increase at a faster rate. The service area indicated had a total population of 18,500. Between 1960 and 1970, population had only increased by 1,504. 14.5% of the population is over 65 years of age. Projections of per capita income for 1980, he related, ranged from $2,281 to $3,030. He found 31 of 719 housing units vacant in Mountain View. He expressed the opinion, based upon the United States average savings amounting to 8% of total personal income, that by 1980, this would amount to $5,000,000 annually in Stone County, and that, on the basis of 34% of all over-the-counter savings in 1971 in savings and loan associations, the service area should have $14,000,000 in savings and loan institutions. In one economic indicator, automobile registration, he found Stone County slightly behind the remainder of the State. He admitted that if there were an error in his data, his projection would be erroneous. In making his projections in the secondary service area he applied the Van Burén County averages to the townships in that county. He found an 8% unemployment rate in Van Burén County (as opposed to 5% in the state). He conceded that Mountain View itself could not support the institution.

Dr. Charles Venus, an Arkansas economist, testified on behalf of the protestant. He felt that the information submitted with the application was erroneous and misleading. He pointed out that, aside from 600 people who resided in the area annexed to Mountain View, there was a 10-year population increase in that city of only 280, or an average of 28 persons or 7 families per year between 1960 and 1970. This would require 7 new houses there per year. He pointed out the fallacy in projecting percentages where the beginning basis was small. He added the two prime sources of nonworking income, government and transfer payments (such as social security and welfare payments), and found that slightly less than one-half of total income in Stone County came from these sources. To him, this was an indication that the county was very poor. He emphasized the premise that the federal government had invested considerable money in the caverns and the folk center in an effort to afford local people with employment because of the existing high unemployment rate. Consequently, he said, new jobs did not mean new people. He testified that the figure of $3,400 shown in the supplemental economic data supporting the application as average annual earnings was based upon an erroneous premise, i.e., that it was obtained by dividing the total payroll by the total covered employment. According to him, this method excluded those employments not covered under the Arkansas Employment Security Law such as agricultural workers, self-employed persons, unpaid family workers, in-state railroad employees, domestic servants and non-profit organization employees, generally considered the lower paid employment. Thus, he said, both the figures in this supplement and the actual average earnings in the county were well below the accepted United States poverty level of $3,450 for all families and $3,735 for a family of four. He also pointed out errors in the applicants’ table of mortage loans, which, in his opinion made it undependable.

Dr. Venus said that a correct projection with reference to savings of personal income which might be expected to be captured by the proposed savings and loan association in Stone County in 1973 amounted to only $445,946, assuming that the total savings would amount to 8.8% and the portion going into savings and loan associations to be 34%. According to Dr. Venus, by typical definition, 75% of the business is generated in the primary service area. He stated that in order to reach $1,500,000, the projected amount of savings on which applicants’ operating budget was based, it would be necessary for them to get 130% of the total savings in Stone County consisting of demand deposits, time deposits and all of the growth deposits of the Bank of Mountain View. It was his opinion the savings base in the area simply would not grow fast enough to support an independent savings and loan association for some years to come and, considering the credit situation for the next year, there was an excellent chance for the institution to lose money for four or five years.

We cannot say that this evidence when considered as a whole did not constitute substantial evidence to support the board’s conclusion. Even though we might well conclude that there was substantial evidence to support the application, we must reverse the circuit court and affirm the board.

Harris, C.J., dissents.

HOLT,J., not participating.


text:
    Harold S. PURSER v. CORPUS CHRISTI STATE NATIONAL BANK
    73-308
    508 S.W. 2d 549
    Opinion delivered April 29, 1974
    [Rehearing denied May 28, 1974.]

      Sam Goodkin, for appellant.

      Bethe.ll, Callaway & Robertson, for appellee.
   JOHN A. FOGLEMAN, Justice.

This is an appeal from an order of the Sebastian County Circuit Court striking appellant’s counterclaim and setoff in an action brought by appellee under Ark. Stat. Ann. § 29-801, et seq. (Repl. 1962), the Uniform Enforcement of Foreign Judgments Act, to register an in personam default judgment rendered against appellant by a Texas court, August 29, 1972, alter service pursuant to Article 2031b, Texas Revised Civil Statutes. The judgment, in the amount of $72,825.33 for principal, interest and attorney’s fees, was based on certain past due and unpaid promissory notes, executed by appellant and payable to appellee.

On February 14, 1973, appellee filed a Petition for Registration of Foreign Judgment in the Sebastian County Circuit Court, alleging that appellee had obtained the Texas judgment, an authenticated copy of which was attached, and that it remained unsatisfied. Summons and a copy of the petition were served on appellant that same day. Appellant filed an answer denying the jurisdiction of the Texas court and a counterclaim and setoff which sought $75,000 compensatory damages for conversion of appellant’s business and assets and $100,000 compensatory damages and $100,000 punitive damages for malicious prosecution. These torts were alleged to have been committed in the State of Texas, where appellant then had resided and engaged in business. The appellee responded by filing a motion to quash the counterclaim and setoff alleging that the Sebastian Circuit Court lacked jurisdiction over the subject matter and the parties. On September 13, 1973, the circuit judge sustained the motion and ordered the counterclaim and setoff dismissed without prejudice retaining jurisdiction over appellee’s petition for registration of the foreign judgment. This appeal followed.

Before reaching the merits of appellant’s contention that the trial court erred in dismissing his counterclaim and setoff, it is necessary to consider appellee’s contention that the ruling by the trial judge is not an appealable order. For the order of a trial court to be appealable, it must be final. Ark. Stat. Ann. § 27-2101 (Repl. 1962); Allred v. National Old Line Insurance Co., 245 Ark. 893, 435 S.W. 2d 104. A final judgment is one which discharges a party from the action, operates to divest some right so as to put it beyond the power of the court to place the parties in their former condition after the expiration of the term and dismisses him from court or concludes his rights to the subject matter in controversy. McConnell & Son v. Sadle, 248 Ark. 1182, 455 S.W. 2d 880; Johnson v. Johnson, 243 Ark. 656, 421 S.W. 2d 605; Fox v. Pinson, 177 Ark. 381, 6 S.W. 2d 518; Flanagan v. Drainage District No. 17, 176 Ark. 31, 2 S.W. 2d 70.

The general rule that the dismissal of a counterclaim or setoff is not directly appealable is subject to exception where, under the circumstances of the case, the order has the effect of a final decision. Fox v. Pinson, supra; 4 Am. Jur. 2d, Appeal & Error, §§ 98, 100. In determining what constitutes a final order, the requirements of finality must be given a practical rather than a technical approach. Gillespie v. United States Steel Corp., 379 U.S. 148, 85 S. Ct. 308, 13 L. Ed. 2d 199 (1964). This is necessary because the question is sometimes so close that a decision either way can be supported with equally forceful arguments, making it impossible to devise a formula to resolve cases coming within the “twilight zone.” This is really the approach taken in allowing exceptions to the rule that dismissal of a counterclaim is not appealable.

It is obvious that any relief to which appellant might be entitled in the courts of Arkansas on his counterclaim is effectively foreclosed by its dismissal, even without prejudice. It does not appear that there are any allegations which would ever justify service on appellee or the exercise of jurisdiction over it in Arkansas under the Uniform Interstate and International Procedure Act [Ark. Stat. Ann. § 27-2501, et seq. (Supp. 1973)]. This is the sort of case, then, that calls upon us to be practical rather than technical in testing the finality of the order dismissing the counterclaim. We took this kind of approach recently when we assumed that an order dismissing a counterclaim was appealable in Reynolds v. Bakem Credit Union, 255 Ark. 322, 500 S.W. 2d 355. In so doing, we referred to cases in which the practical effect of an order, unreviewed, was the death knell of a party’s attempt to litigate his claim. See Eisen v. Carlisle & Jacquelin, 370 F. 2d 119 (2nd Cir.1966); Reader v. Magma-Superior Copper Co., 108 Ariz. 186, 494 P. 2d 708 (1972); Miles v. N. J. Motors, 32 Ohio App. 2d 350, 291 N. E. 2d 758 (1972).

We find great similarity between this case and Fox v. Pin-son, supra. In Fox this court had reversed a mortgage foreclosure decree and remanded the cause for further proceedings. See Fox v. Pinson, 172 Ark. 449, 289 S.W. 329. Appellant then filed a “cross-complaint” against the plaintiffs (appellees here) for loss of rental value, wrongful conversion of property and for the value of a building on the property allegedly destroyed by appellees while in possession of the land. Appellant sought $74,640 in damages, admitted that $11,500, representing 23 promissory notes then due, should be set off against her recovery and prayed judgment for the balance. Appellees demurred to the “cross-complaint.” After appellant refused to plead further, the court sustained the demurrer and dismissed the cross-complaint. Appellant sought to appeal the dismissal. We held that the dismissal effectively concluded appellant’s rights to the subject matter in controversy and was therefore an appealable order. When we view the situation at hand practically, we must say that the dismissal of appellant’s counterclaim, in effect, terminated a severable branch of the case and was a final and appealable order.

In deciding whether a counterclaim and setoff for damages arising from allegedly tortious conduct of appellee in a foreign jurisdiction may be pleaded in an action to register a foreign judgment in favor of appellee and against appellant, it is necessary to look to both the compulsory counterclaim statute [Ark. Stat. Ann. § 27-1121 (Repl. 1962)] and the Uniform Enforcement of Foreign Judgments Act [Ark. Stat. Ann. § 29-801, et seq. (Repl. 1962)] and ascertain the purpose of each of those acts.

The salient purpose of the Uniform Act is to provide for a summary judgment procedure in which a party in whose favor a judgment has been rendered may enforce that judgment promptly in any jurisdiction where the judgment debtor can be found, thereby enabling the judgment creditor to obtain relief in an expeditious manner. Ark. Stat. Ann. § 29-806 (Repl. 1962); Commissioners’ Note to the Uniform Act, Uniform Laws Annotated, Vol. 9A, p. 476; Leflar, The New Uniform Judgments Act, 3 Ark. L. Rev. 402, 415; Nunez v. O. K. Processors, 238 Ark. 429, 382 S.W. 2d 384. The Uniform Act provides that any defense, setoff or counterclaim which, under the laws of this state, may be asserted by the defendant in an action on a foreign judgment may be raised in the proceedings pursuant to the act. Ark. Stat. Ann. § 29-808 (Repl. 1962).

Dr. Leflar gave us the historical background of the act. In speaking of the rejection of a pure registration system and the adoption of the summary judgment procedure by the National Conference of Commissioners on Uniform State Laws, he said:

The alternative solution which naturally suggested itself was a summary judgment procedure. A few states had already made such a procedure available for suits on foreign judgments, in connection with comprehensive summary judgment enactments, but a number of states which had set up summary judgment procedures for some purposes had not specifically included actions on foreign judgments among the causes of action for which the summary procedure was provided.
Analysis of the problem indicated that a summary procedure devised specially for rendering new judgments on extrastate judgments might be more speedy and efficacious in operation than summary judgment procedures usually are, yet just as fair to all concerned. Further, it became apparent that most of the advantages of a direct registration procedure could be achieved under such a quick judgment procedure. Accordingly, at the Philadelphia meeting of the National Conference of Commissioners on Uniform State Laws in October, 1946, when alternative tentative drafts of a proposed act were presented to the Conference, one prescribing a registration system and the other a summary judgment procedure, preference for the latter was indicated and this preference was made final by a formal vote of the Conference at the Cleveland meeting in 1947. Then at the Seattle meeting in September, 1948, a final draft of an act drawn on the summary judgment theory was adopted, the following week was approved by the House of Delegates of the American Bar Association, and thus was formally promulgated and made available for adoption by the states.

This section of the act was intended to do no more than recognize that a judgment debtor should have the right to raise any defense, counterclaim or cross-complaint which, under the law of this state, he might have asserted in the preexisting procedure by which a judgment creditor in a foreign state had to bring a suit on it in Arkansas in order to carry it into effect here. See Leflar, The New Uniform Foreign Judgments Act, 3 Ark. L. Rev. 402, 410, 412. Dr. Leflar put the matter in proper perspective, saying:

The judgment debtor has had his notice and opportunity for hearing in the first state; traditional practice has never permitted him to litigate anew defenses that were available to him all along. These are foreclosed. The only defenses still available to the judgment debtor are satisfaction of the judgment, absence of jurisdiction in the court rendering the judgment, and possibly certain types of fraud in the procurement of the judgment. So long as it remains possible for him to present these defenses in some manner and at some stage in the proceedings before final enforcement of the judgment against him, his interests are adequately protected. The procedure of a new suit brought against him would be merely one method, but by no means the only method, whereby he could be given ample opportunity to present these defenses if they in fact exist. If they do not exist, the debtor loses nothing. The lack of opportunity to present other defenses is no loss, since no other defenses are available to him in any event. The only important thing is that he be given a fair chance to present defenses that actually exist. The essence of this theory is that due process need not be satisfied separately in each state that has anything to do with the rendition or enforcement of a judgment; that it is enough that due process be satisfied in one state, after which the, action of another state in furtherance of the already valid judgment is essentially administrative in character, with no new notice and hearing necessary. In all the discussion of the proposed act among the Commissioners, little if any doubt was ultimately cast on the soundness of the analysis just stated.

Arkansas promptly recognized the need for such a summary procedure by adopting Act 34 of 1949. [Ark. Stat. Ann. § 29-801, et seq. (Repl. 1962)].

To permit defenses or counterclaims which would not have been theretofore available in a suit on a foreign judgment would be subversive of the whole legislative scheme. Thus, we must ascertain whether, under our decisions, a counterclaim and setoff such as the one in this case may be pleaded as a defense to an action on a foreign judgment.

We have long recognized that a judgment debtor has a right to defend against a foreign judgment sought to be enforced in the courts of this state, but not on defenses that could have been made in the action in which the judgment was rendered. Peel v. January, 35 Ark. 331, Stewart v. Budd, 169 Ark. 363, 275 S.W. 748. Under the full faith and credit clause of the United States Constitution, Art. 4, § 1, such a judgment is as conclusive on collateral attack, except for the defenses of fraud in the procurement of the judgment or want of jurisdiction in the court rendering it, as a domestic judgment would be. Phillips v. Phillips, 224 Ark. 225, 272 S.W. 2d 433; Lewis v. United Order of Good Samaritans, 182 Ark. 914, 33 S.W. 2d 53. Furthermore, a judgment entered by default is entitled to full faith and credit and is as conclusive against collateral attack as any other judgment. Holbein v. Rigot, 245 So. 2d 57 (Fla. 1971); American Institute of Marketing Systems, Inc. v. Don Rhoades Corporation, 82 N. M. 659, 486 P. 2d 68 (1971); Wagner v. Cholley, 181 Md. 411, 31 A. 2d 852 (1943); Fred Miller Brewing Co. v. Capital Ins. Co., 111 Iowa 590, 82 N.W. 1023 (1900); Parker v. Hoefer, 2 N.Y. 2d 612, 162 N.E. 2d 194 (1957); Dunn v. Royal Brothers Company, 111 Ga. App. 322, 141 S.E. 2d 546 (1965); Gibson v. Epps, 352 S.W. 2d 45 (Mo. App. 1962). See Buford & Pugh v. Kirkpatrick, 13 Ark. 33. Since appellant does not allege fraud or lack of jurisdiction in his counterclaim and setoff, the defense asserted by it may not be maintained.

A direct attack on a judgment is an attempt to amend it, correct it, reaffirm it, vacate it, or enjoin its execution in a proceeding instituted for that purpose. Sewell v. Reed, 189 Ark. 50, 71 S.W. 2d 191; Woods v. Quarles, 178 Ark. 1158, 13 S.W. 2d 617. An attack is direct where the proceeding in which it is made is brought for the purpose of impeaching or overturning the judgment, and collateral if made in any manner other than by a proceeding the very purpose of which is to impeach or overturn the judgment. Brooks v. Baker, 208 Ark. 654, 187 S.W. 2d 169; Wilder v. Harris, 205 Ark. 341, 168 S.W. 2d 804. An action which contemplates some other relief or result is a collateral attack. Sewell v. Reed, supra; Brooks v. Baker, supra. Since appellant’s pleading does not seek to directly overturn or modify the original judgment, it constitutes a collateral attack on the judgment which, absent allegations of fraud or lack of jurisdiction, either of the subject matter or of the parties, may not be raised in the registration proceedings.

Appellant also contends that our compulsory counterclaim statute [Ark. Stat. Ann. § 27-1121 (Repl. 1962)] applies to any action brought in an Arkansas court and would not only allow, but require, appellant to assert his counterclaim and setoff. We do not agree. In this case appellant is asserting the counterclaim and setoff, not as a defense to the original cause of action, but in a proceeding brought to enforce a judgment rendered in the original suit. We find this distinction to be significant. The purpose of the compulsory counterclaim statute was to settle all issues between the parties in one and the same lawsuit, thereby avoiding multiplicity of actions. Martin v. Romes, 249 Ark. 927, 462 S.W. 2d 460. However, the statute applies only to a cause of action which the defendant could maintain as an independent suit. Coats v. Milner, 134 Ark. 311, 203 S.W. 701.

The cause of action on which this counterclaim and setoff was founded arose from allegedly tortious conduct of the appellee in Texas. The facts do not indicate any connection whatsoever with Arkansas until the time of the attempted registration of the judgment. The acts in Texas were not of such a nature that the defendant could maintain a separate cause of action in the Arkansas courts. To apply the compulsory counterclaim statute to these facts would be subversive of the salutary intent of the Uniform Act to provide for a prompt summary procedure to register such judgments without furthering the purposes of the counterclaim statute to prevent piecemeal, multiplicitous litigation in Arkansas courts. It might well pose constitutional questions under the full faith and credit clause of the United States Constitution. Furthermore, the compulsory counterclaim statute was passed in 1935, so the Ark. Stat. § 29-808 would supersede it, insofar as foreign judgment registration procedures are concerned, if there is any conflict.

The order dismissing the counterclaim and setoff is affirmed.