author: Tom Glaze, Justice. Jack Holt, Jr., Chief Justice,

text:
    CITY OF CROSSETT v. PACIFIC BUILDINGS, INC.
    88-286
    769 S.W.2d 730
    Supreme Court of Arkansas
    Opinion delivered May 1, 1989

      Thomas S. Streetman, Crossett City Attorney, for appellant.

      John R. Byrd, for appellee.
   Tom Glaze, Justice.

This is an appeal from the chancellor’s ruling ordering the City of Crossett to accept, maintain and operate the sewer system installed in the Woodlawn Subdivision. The city appeals, alleging seven points of error. We find no error and therefore affirm.

The Woodlawn Subdivision was the product of a joint venture between Southeast Properties and Real Estate and Pacific Buildings, Incorporated. These two companies used the name Woodlawn Development Company (Woodlawn) for their joint venture. Woodlawn employed the engineering firm of Marion Crist and Associates, which assisted in designing a plan for a 150 house subdivision. The Woodlawn developers met with the Crossett Sewer Commission, and on August 21, 1972, the Commission and its chairman introduced a proposal for the Woodlawn Subdivision to tie into the city’s sewer system. Woodlawn was to install the system, and the city was to maintain it. The Crossett City Council approved the proposal. After the city’s approval, Woodlawn obtained financing and hired Byron Jones to install the system. As the developers constructed and completed houses in the subdivision, they connected and tied the houses into the city’s water and sewer systems.

On March 18,1974, the city council changed its position and voted that Woodlawn must both install and maintain the sewer system. Robert Kennedy, a partner in Southeast Properties, testified that he was unaware of this change or the council’s meeting. It is conceded, however, that Woodlawn had been operating and maintaining the system since it was installed. Nonetheless, according to Kennedy, he first became aware of the city’s refusal to maintain the sewer system only when he received a complaint from the State Health Department in January of 1979. After learning of the city’s decision to require Woodlawn to maintain the system, Woodlawn met with the Crossett City Council on February 26, 1979. As a result of that meeting, the council passed a motion that it would accept the obligation to maintain and operate the sewer system if the city was furnished with written certification from Marion Crist and Associates that (1) the system was constructed according to the construction standards of the city or (2) the system now meets the construction standards of the city for a sanitary sewer system.

After two inspections by Robert Yeatman, an employee of Marion Crist, and the completion of recommended repair work, Yeatman, in a letter to the city dated October 20,1986, certified that Woodlawn’s sewer system was now in compliance with the city’s standards for sanitary sewerage facilities. However, on May 18,1987, the Crossett City Council still voted not to accept the system. Woodlawn (Pacific Buildings, Inc.) filed suit against the city asking for specific performance and mandatory relief requiring the city to accept, maintain and operate the sewer system. The city responded by denying Woodlawn’s claims and by raising the affirmative defenses of the statute of limitations, laches, waiver and estoppel. The city also claimed the chancery court had no jurisdiction to award the relief requested by Woodlawn. The trial court rejected all of the city’s claims and defenses and ordered the city to accept, maintain and operate Woodlawn’s system effective October 20,1986, the date Marion Crist certified the system.

We first dispose of the city’s jurisdiction argument when it claims the relief requested by Woodlawn is actually one of mandamus, which is not cognizable in chancery court. Although the city attempts to turn Woodlawn’s action into one of mandamus, we point out that from the very inception of this litigation, Woodlawn has sought to compel the city to specifically perform its agreement or commitment to accept and maintain Wood-lawn’s water and sewer system in accordance with the parties’ original agreement in 1972, and the more recent one, which resulted from their meeting on February 26, 1979. Specific performance is an equitable remedy which compels the performance of an agreement or contract on the precise terms agreed upon. McCoy Farms, Inc. v. J & M McKee, 263 Ark. 20, 563 S.W.2d 409 (1978). The chancery court in this cause clearly had the power to award the relief requested by Woodlawn.

We also find no merit in the city’s arguments that the trial court erred in holding the city’s defenses of statute of limitations, laches, waiver and estoppel did not bar Woodlawn’s action. The city argues eight years elapsed between the time it conditionally agreed to maintain Woodlawn’s system in February 1979, and when Woodlawn filed suit on August 12, 1987. The record, however, reflects the parties’ agreement never specified a time within which the conditions in the parties’ 1979 agreement were to be completed. While the law provides for the implication of a reasonable time for the condition to be performed, the evidence reveals that both parties worked together and with others in order to resolve the problems surrounding Woodlawn’s systems. The city council apparently remained dissatisfied but did not refuse the system until May 18, 1987 — after Woodlawn furnished the city the certification it requested. Woodlawn filed suit three months later. We believe the evidence clearly supports the chancellor’s decision that Woodlawn’s action was timely and did not prejudice the city’s position in this cause.

Although the city also argues waiver and estoppel, we believe much of the evidence already noted above runs contrary to those defenses, as well. The city argues Woodlawn waived its claim that the city should maintain and operate the system because Woodlawn had maintained it over long periods of times. Further, the city says Woodlawn should be estopped to assert its claim because Woodlawn failed to construct the system as designed or to city standards, and it failed to construct the number of houses originally specified. It also asserts Woodlawn knew the sewer system did not work from the time it was built until sometime, in 1984. Again, Woodlawn presented proof that it, the city and others were working towards the city assuming its obligation to maintain the subdivision’s sewer system — as the city first promised in 1972. While the record reflects this matter was often an on-again, off-again project, Woodlawn never abandoned its actions to get the city to maintain the system, and as is evidenced by the city’s actions in February 1979, the city continued to work with Woodlawn towards this end. The construction of the houses was to be performed in phases, and obviously their construction would in part be dependent upon the resolution of the differences between the city and Woodlawn over the sewer system.

The appellant next contends that the chancellor erred in finding that the Woodlawn sewer system met the city’s construction standards for sanitary sewer systems. We cannot agree. This court will reverse a chancellor’s finding only if it is clearly erroneous. ARCP Rule 52.

At the trial, Byron Jones, the contractor of the Woodlawn sewer system, testified that one four inch line ran from the main sewer line to a “Y” connector, which allowed lines from two houses to be attached. After hearing this testimony, Robert Yeatman testified on cross-examination that at the time he wrote the letter certifying that the sewer system met the city’s standards, he was unaware that the system had only one service connection for every two lots. Yeatman further stated that the system’s one four inch line to two houses did not meet the city standards and was not in accordance to the plans prepared by Marion Crist and Associates. The city also produced testimony by Dean Ray, the city building official, that Woodlawn’s sewer system did not meet the city’s standards.

In response to the foregoing testimony, Woodlawn had Ray explain that he could not show where the city standards required one line per house. In fact, Ray testified that the city had adopted the State Plumbing Code, which does not require one line per house. Ray conceded that he could not point to anything showing that the city had ever amended the code so as to require one service line to one house. Ray also testified that “there were some areas in Crossett that had two sewers tied into one line.” In reviewing all of Ray’s testimony, one could fairly state that parts of it may be cited to support either the city’s or Woodlawn’s position ás to whether the Woodlawn system now meets the construction standards of the city. Because the record is unclear on what construction standards the city required, we simply are unable to say that the chancellor’s finding was clearly erroneous on this issue.

We next consider the city’s argument regarding whether the chancellor erred in allowing expert witnesses, Robert Yeatman and Jimmy Knight, to remain in the courtroom. The city had invoked “the rule” to have all witnesses not currently testifying removed from the courtroom. The chancellor granted the city’s request, but allowed Woodlawn to have two expert witnesses remain in the courtroom. We find no error in the trial judge’s actions.

Upon request of a party, the court shall order witnesses to be excluded so that they cannot hear the testimony of the other witnesses. A.R.E. Rule 615. The standard of discretion given to the trial judge by this part of the rule is that of no discretion. Blaylock v. Strecker, 291 Ark. 340, 724 S.W.2d 470 (1987). However, the rest of Rule 615 exempts certain persons from the operation of this rule, and the applicable provision here exempts a person whose presence is shown by a party to be essential to the presentation of his or her cause. When dealing with the exemptions from “the rule” provided in the Rule 615, this court has said that the trial judge has average discretion. Id.

When reviewing the testimony of Yeatman and Knight, on hindsight, we agree that their testimony was based more on their independent knowledge of the sewer system than on any knowledge they may have obtained by hearing other testimony in the courtroom. At the end of Yeatman’s and Knight’s testimony, the city objected that it had not been shown that their opinion testimony was based on other witnesses’ testimony. Although the chancellor appeared to agree with the city, he overruled the objections because he found that the city had not been prejudiced. We agree.

Violation of the witness-exclusion rule goes primarily to witness credibility. See Martin v. State, 22 Ark. App. 126, 736 S.W.2d 287 (1987). Here, the city was free to challenge the credibility of the witnesses’ testimony on the basis that they had heard testimony from prior witnesses. The city has failed to show that it was prejudiced by Yeatman and Knight remaining in the courtroom. In fact, the city, in much of its argument on appeal, relies heavily on Yeatman’s opinion testimony, elicited during the city’s cross-examination, which was based upon Byron Jones’s testimony at trial.

Finally, the city argues that the chancellor erred in making its order retroactive to October 20, 1986, the date Yeatman certified by letter that Woodlawn’s sewer system met the city’s standards. The city’s argument here is similar to its jurisdictional argument in that it claims Woodlawn’s action is for preventive or injunctive relief, which is not relief which addresses wrongs already committed. Here, the chancellor granted specific performance and stated further that it would enter orders of mandatory injunction as are necessary to insure that the city complies with the orders of the court. In granting such relief, the court merely took into account that the city had voted to accept the Woodlawn sewer system when it received the required letter of certification from Marion Crist and Associates. Accordingly, the condition to which the parties agreed was met on October 20, 1986, and the chancellor was correct to grant relief under the remedy of specific performance beginning with that date.

For the reasons stated above, we affirm.

Holt, C.J., dissents.

Jack Holt, Jr., Chief Justice,

dissenting. This case should be reversed and the suit dismissed. The order of the chancery court directs specific performance of an agreement by the City of Crossett to accept and maintain a sewer system located in the Woodlawn subdivision, which is owned by appellee Pacific Buildings, Inc. The City’s obligation to accept and maintain the sewer system was conditioned upon a finding that the system met the City’s standards. The evidence shows that the Woodlawn sewer system does not meet the City’s standards at present, nor has it ever. The chancellor’s findings to the contrary are clearly against a preponderance of the evidence. The City is also correct when it argues that the trial court erred in allowing witnesses for Pacific to remain in the courtroom in violation of A.R.E. Rule 615.

Pacific’s predecessor in interest, Richard Kennedy, began the Woodlawn subdivision project in 1972. In order to obtain financing, Kennedy had to obtain the City’s commitment to maintain the sewer system once it was built. Plans for construction of the system were drafted to meet the City’s standards and were submitted by the engineering firm of Marion Crist and Associates in 1972. Those plans were approved by the City Engineer, the Planning Commission, and the Sewer Commission. Thereafter, the City voted in favor of a proposal to maintain the system.

Approximately 30 lots were developed in 1973, and the sewer system was constructed by Byron Jones. During construetion, the City Engineer inspected and approved the system, which was connected to the City’s sewer system although the subdivision had its own pumping station.

Kennedy testified that after construction, during the seven year period from 1972 until 1979, either he or his son maintained the sewer system. The record is clear that the City did nothing as concerns its commitment, and Kennedy did not require it. In fact, as the majority points out, when the City decided not to maintain the system in 1974, Kennedy had no knowledge of that action. This lack of knowledge was typical of the situation, and I find no support for the majority’s conclusion that there existed a working relationship between the parties as concerns who was to eventually maintain the system.

By 1979, the system had deteriorated to such an extent that the pumps were failing, the system was overflowing, and at times it had simply shutdown. The record shows that from 1978 until 1979, neither Kennedy nor anyone else bothered to check the system. Finally, in 1979 Kennedy received a notice from the Department of Health concerning the Woodlawn sewer system.

When Kennedy again went to the City Council to discuss the City’s commitment to maintain the system, he was informed that the City no longer considered itself bound by its original agreement. However, after another meeting, the City decided to accept and maintain the system provided: (1) Kennedy obtain certification that the system as originally installed was built according to City’s standards; or (2) Marion Crist and Associates certify that the system in its present condition met City standards.

Yeatman, the engineer with Marion Crist who drafted the plans for the Woodlawn sewer system, informed Kennedy that he could not certify the system as originally built because he had not supervised its construction. However, he was willing to inspect the system and certify that in its present condition it was up to City’s standards. Upon inspection, Yeatman discovered that the system was plagued with malfunctions and construction errors such as sewer lines which ran beneath manholes but which had never been connected to the manholes. He contacted Kennedy and the City, outlined all of the deficiencies, and indicated he could not certify the system as being in compliance with City standards.

For the next four years, between 1979 and 1983, Kennedy tried to upgrade the system on his own. He was not able to do much, and in 1983 he contacted a firm to overhaul the system. In 1984, Pacific bought out Kennedy’s interest as it became clear that the entire subdivision was failing. Pacific spent approximately $10,000.00 to install a new pumping system and to correct any problems as to the manholes — some of which could not be located. In fact, a few of the manholes had never been built, some were improperly installed, and several had not been connected or if connected had not been finished; others were overgrown with weeds and covered with garbage to the point that they were not functional. In 1986, after two inspections, Yeatman wrote a letter certifying the Woodlawn sewer system as meeting City standards. In 1987, Pacific contacted the City to request that the municipality accept and maintain the sewer system. The City declined and Pacific brought suit.

Our standard of review in cases from .chancery court is that we review the entire case de novo but will not reverse unless the findings of the lower court are clearly erroneous or clearly against a preponderance of the evidence. Witt v. Rosen, 298 Ark. 187, 765 S.W.2d 956 (1989). The only real basis for the chancellor’s decree of specific performance is the 1986 letter by Yeatman in which he stated after inspection that the system met City standards. A preponderance of the evidence clearly demonstrates that the condition had never been satisfied.

Yeatman testified that he had been involved in a majority of all sewer projects constructed in the City of Crossett since 1962. His firm drafted the plans and specifications for the Woodlawn sewer system, and he was aware of the necessity that the City assume maintenance of the system so that Kennedy could obtain financing. In fact, it was his understanding that the Woodlawn system was to be owned and operated by the City. Accordingly, the plans were drafted so that the system would meet the City standards.

Byron Jones, who represented the firm that constructed the system, testified at trial that when he installed the service lines from the sewer mains to the lots, he would install only one line for every two lots. Apparently, he installed a service line at or near the juncture of the property lines for two lots, skipped a lot, and so on. The service lines ended in a “Y” so that two adjoining lots could tie in upon completion of the homes.

An examination of the exhibits introduced at trial demonstrates that the plans and specifications for the sewer system called for one service line to be constructed per lot or home. Clearly, this was not done. Yeatman first learned of this fact at trial. He testified that his inspection of the system had not disclosed the failure by Jones to comply with the original plans since it would have been necessary to dig up the service lines or place a camera in the mains. Yeatman further testified that the failure to use or construct one service line for each lot would result in problems with the system in the future. Finally, Yeatman testified that he had not known of the defect when he wrote his certification letter in 1986; he then states, “now that I am aware of it, the system does not comply with the standards of the City of Crossett.” (Emphasis mine.)

What the majority seems to ignore is that this undisputed testimony came from the individual who wrote the letter upon which the chancellor based his decree of specific performance. Yeatman drafted the Woodlawn sewer system plans in accordance with City standards to require one service line per lot; he later certified the system without knowing that it had not been constructed accordingly. Upon discovering the truth, he testified that the system did not meet City standards.

The majority focuses its attention on the testimony of Dean Ray, the City’s building official. Ray testified at trial that whereas the City had adopted the State Plumbing Code, which he thought required one service line per lot or house, he could not find that requirement in the Code. Nevertheless, Ray went on to testify that “[t]he City is allowed to make amendments to the Code. I have been operating under the policy that requires one per service line.” (Emphasis mine.)

I fail to understand the magical significance which the majority attaches to adoption of the State Plumbing Code when the evidence clearly demonstrates that the City of Crossett, its engineer, the Planning Commission, and the Sewer Commission all approved the plans submitted by Crist and Associates, which required one service line per lot. The City had the forsight to require one service line per lot in the construction of sewer systems and, obviously, the plans submitted by Yeatman evidenced the real standards of the City of Crossett, not the State Plumbing Code.

Dean Ray testified that during the week before trial he conducted a complete examination of the Woodlawn sewer system. He stated that the connection between several of the manholes and the actual sewer main was nonexistent. Installation of these manholes had sometimes apparently involved no more than breaking an opening into the top of the sewer main below the manhole cover. Debris collected in the main and around the jagged edges near the bottom of the manhole. Both Ray and Yeatman testified that this condition did not comply with either the plans or the City’s standards. Ray further established that many of the deficiencies which originally caused Yeatman not to certify the system remained at the time of trial. To some extent, the mayor corroborated the existing defects in the system. The only testimony to refute the evidence concerning the condition of the system was presented by the individual who did the repairs, and he simply stated that to the best of his knowledge he had done everything required by Yeatman to bring the system up to par.

If an enforceable agreement between the City and Pacific existed, it was that the City would maintain the Woodlawn sewer system once it met established City standards. The trial court found, based upon Yeatman’s 1986 letter, that the condition had been satisfied. That conclusion is clearly erroneous, even in light of the trial court’s ability to judge credibility, since by Yeatman’s undisputed testimony alone the Woodlawn sewer system fails to meet City standards — both with respect to the service lines and as to the problems with the manholes. On this point the case should be reversed and the suit dismissed.

I disagree with the majority in at least one other respect. A.R.E. Rule 615 provides that upon the request of a party the court shall order witnesses excluded so that they cannot hear the testimony of other witnesses. See e.g., Martin v. State, 22 Ark. App. 126, 736 S.W.2d 287 (1987). The standard of discretion given to the trial court by this part of the rule is that of no discretion. Blaylock v. Strecker, 291 Ark. 340, 724 S.W.2d 470 (1987). Use of the word “shall” makes exclusion of the witness mandatory. If a party requests the rule, it must be granted. Martin, supra; Blaylock, supra.

The remainder of the rule exempts certain persons from its operation. In part, it provides that the rule does not authorize exclusion of “a person whose presence is shown by a party to be essential to the presentation of his cause.” When an exception to the rule is sought under this language, it is usually based upon A.R.E. Rule 703. Martin, supra. Rule 703 deals with expert witnesses who will be present in court to hear the evidence. The exception is not automatic, however, and depends upon the extent to which the expert actually bases his opinion upon testimony presented in court. The witness should be allowed to remain only if his testimony is to be based upon matters testified to by other witnesses. When a party seeks to exempt an expert witness, the decision is within the discretion of the trial court, but this court will reverse if we find an abuse of that discretion.

In the case at bar, after “the rule” had been requested at the start of trial, the City objected to the presence of Yeatman and Knight in the courtroom at every possible point in the trial. Pacific maintained that Yeatman and Knight came within the exception to the rule as they were expert witnesses whose presence at trial was necessary. The trial court allowed the witnesses to remain in the courtroom, and the City objected repeatedly as it became increasingly clear during trial that the testimony of the witnesses was based only upon what was within the personal knowledge of each and not upon the evidence introduced at trial. The chancellor found, at least as to Knight, that it had not been necessary for the witness to remain in the courtroom. Nonetheless, the City’s objections were overruled.

The City argues that prejudice can be shown in that it intended to use the testimony of Byron Jones concerning his placement of the service lines on cross-examination of Yeatman and that the City lost the element of surprise when Yeatman was allowed to remain in the courtroom. I would conclude that because the rule is mandatory, the court should have excluded the witnesses unless it could be shown that they came within the exception. As it was clear that the witnesses did not need to remain in the courtroom, I feel the court abused its discretion.

One final point needs to be made. All actions based upon any contract or obligation not in writing must be commenced within three years after the cause of action accrues. The chancellor ruled that the statute of limitations had not run as the parties did not specify a time period during which Kennedy or Pacific had to bring the sewer system up to City standards. Where no time period has been specified, a reasonable time period will be presumed. Here, Pacific did not attempt to have the City assume control of the sewer system until either 1986 or 1987, which is seven to eight years after the 1979 vote by the City Council to accept and maintain the system provided it met City standards. I find no support for the majority’s position that the parties had been working together during this time to solve the question of who was to maintain the Woodlawn sewer system.

       Pacific Buildings, Inc. has since purchased Southeast Properties’ interest in the subdivision and is now the only company involved in this litigation. For opinion writing purposes, Pacific Buildings, Inc. and Woodlawn will be considered as one and the same.

       There was evidence to show that during this time Southeast Properties was having financial trouble which later led to Pacific Buildings purchasing its interest. During some of this time, the repair work on the sewer system was undertaken by a part-time service man.


source: Caselaw Access Project

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

license: Public Domain

text:
    Harvey Merle FRITTS v. STATE of Arkansas
    CR 88-169
    768 S.W.2d 541
    Supreme Court of Arkansas
    Opinion delivered May 1, 1989

      Joe O’Bryan, for appellant.

      Steve Clark, Att’y Gen., by: Kay J. Jackson Demailly, Asst. Att’y Gen., for appellee.
   Tom Glaze, Justice.

This case involves the appellant’s, Harvey Fritts’s, Rule 37 petition wherein he originally alleged that the sentences he received were illegal because they exceed the maximum punishment allowed by law. He also alleged that he was denied effective assistance of counsel. The trial court appointed Fritts an attorney, held a hearing on his petition, and denied the relief requested.

On appeal, Fritts first argues that the trial court had no authority to impose sentences in the manner it did. In this respect, Fritts entered a negotiated plea of nolo contendere to two counts of attempted first degree murder and one count of aggravated assault in exchange for a recommendation from the prosecutor that he receive forty years. On July 15,1986, the court sentenced Fritts to thirty years for each count of attempted first degree murder. In order to achieve the forty years to which the state and Fritts agreed, the court split the thirty year term on the second count so that twenty years of it would commence and run concurrently with the thirty year sentence for count one and the last ten years of it would run consecutively to the thirty year sentence on count one. Fritts received a six year term for the assault charge to be served concurrently with the other sentences.

We do not reach the merits of appellant’s argument because he failed to raise the issue in a timely fashion. Although he challenges on appeal the manner in which the trial court imposed the terms on the two counts of murder, he never challenged the sentence given him — at least on the basis he now argues — until he filed his Rule 37 petition on January 30,1987, or five and one-half months after the sentence was imposed. While an aggrieved party can seek at any time to correct a sentence illegal on its face, he or she can only petition to correct a sentence imposed in an illegal manner if such relief is sought and granted within 120 days after the sentence is imposed. See Ark. Code Ann. §16-90-111 (a) and (b)(1) (Supp. 1987); see also Abdullah v. State, 290 Ark. 537, 720 S.W.2d 902 (1986). We note that the sentences given Fritts were clearly within the maximum prescribed by law and not illegal on their face.

Fritts next argues that his attorney was ineffective. He claims that he had valid defenses of voluntary intoxication and diminished mental capacity, and his counsel should have tried the case rather than allow Fritts to plead nolo contendere. Fritts also argues his attorney never explained (1) the range of sentences he could receive, (2) his plea statement, (3) the lesser included offenses with which he could have been convicted and (4) the fact the sentences he received could be either concurrent or consecutive. The record simply fails to substantiate Fritts’s claims. Fritts’s former attorney testified, and, in doing so, rebutted Fritts’s claims. Suffice it to say, the trial court obviously believed the attorney’s version. In addition, the attorney’s story was supported, in most respects, by the record made at both the plea hearing and post-conviction hearing where Fritts (1) acknowledged his attorney discussed with him the defense of voluntary intoxication, (2) stated he was aware of the possible defenses he could have raised if he had gone to trial, (3) conceded he previously stated he was satisfied with his attorney and (4) knew he would get forty years when he entered a voluntary plea. Furthermore, the plea agreement signed by Fritts disclosed both the maximum and minimum punishments he could have received on each charge pending against him. In sum, the record reflects Fritts’s claim of ineffective counsel is wholly without merit.

For the reasons given above, we find the trial court was correct in denying the appellant’s petition and therefore affirm.

Hickman, J., not participating. Purtle, J., dissents.

John I. Purtle, Justice,

dissenting. There is no authority for a court to split a sentence by suspending a part of it after part of it has been served, and then placing it back in force after a period of suspension. A ten year sentence could be strung along for twenty years or more under the theory utilized by the trial court. This type of sentencing could result in extending the maximum legal sentence for as many additional years as the trial court deems appropriate. That’s not the law.

It is true that the appellant could have been sentenced to 60 years, but he was not. The court imposed two 30 year sentences but actually sentenced him to 40 years by hyphenating one of the terms in the middle. It would have been proper to sentence him to 30 and 10 years consecutively in order to arrive at the agreed-upon 40 year sentence.

Hickman, J., not participating.

       Fritts abandoned his argument below that his sentences were illegal because they were in excess of the maximum allowed by law. In fact, the sentences imposed were within the terms of punishment prescribed by statute.

       Section 16-90-111 also covers events when appeals have been taken and refers to situations when revocation of probation might be involved.


author: Tom Glaze, Justice.

text:
    Robbie MITCHELL v. STATE of Arkansas
    CR 89-69
    769 S.W.2d 18
    Supreme Court of Arkansas
    Opinion delivered May 1, 1989

      Paul Petty and Robert Meurer, for appellant.

      Steve Clark, Att’y Gen., by: DavidB. Eberhard, Asst. Att’y Gen., for appellee.
   Tom Glaze, Justice.

This is an appeal from the appellant’s conviction of driving while intoxicated, first offense, and driving off a laned highway. The appellant moved for the charges to be dismissed and made a motion for suppression of the evidence on the basis that the Bradford city police officer was not qualified to effect appellant’s arrest because the officer had not met the minimum standards as provided in the Arkansas Commission on Law Enforcement Standards and Training. The trial judge found that the police department had shown substantial compliance with the requirements of the law and denied the appellant’s motions. We reverse.

Under Ark. Code Ann. § 12-9-108 (1987), a person who does not meet the standards and qualifications established by the Commission shall not take any official action as a police officer, and any action taken shall be held as invalid. In accordance with its rule and regulation making authority, Ark. Code Ann. § 12-9-104 (1987), the Commission has provided that every officer employed by a law enforcement unit shall be examined by a licensed psychiatrist or psychologist who, after examination, makes recommendations to the employing agency. Regulation § 1002(1). The Commission requires that employment eligibility should depend on the results and recommendations received by investigators and examiners, Regulation § 1002(4), and that verification of minimum employment standards must be contained in the permanent record file maintained by the employing department. Regulation § 1002(2)(i). Finally, the Commission has provided that the completion of the established minimum standards for employment or appointment. must be achieved before employment eligibility is established. Regulation § 1002(4). •

In the present case, the arresting officer’s personnel file failed to contain a psychological report until three months after the officer arrested the appellant even though the City of Bradford had employed the officer for some twenty-one months. The state argues that the city was required only to substantially comply with the Commission standards. While substantial compliance with certain laws or regulations may be sufficient, in some situations, the facts do not warrant a finding of substantial compliance here. The Commission clearly has established minimum standards that must be met before employment eligibility is established, and Arkansas law invalidates any action taken by an officer before he or she meets Commission standards. The City of Bradford took no action to obtain the required psychological report before hiring the officer involved here and only met this minimum standard or requirement three months after the appellant’s arrest, or twenty-one months after the officer was employed. Simply put, this was not substantial compliance with the statutory law or Commission regulations.

In citing our recent cases of Davis v. State, 296 Ark. 524, 758 S.W.2d 706 (1988), and Helms v. State, 297 Ark. 44, 759 S.W.2d 546 (1988), the state contends that even if the appellant’s arrest was illegal because the officer was non-qualified, the appellant must show that the officer’s citation was the only instrument that charged him with the offenses. In presenting its case below, the state never raised this issue. In the lower court, the state limited its argument to the single issue that the officer’s citation, which resulted in the conviction of the appellant, was valid because the city’s employment of the officer substantially complied with the requirements of the law.

The appellant claims that the non-qualified officer’s citation was the only formal charge brought against him, and the state does not contend otherwise. Although this court has authority to go to the record to affirm a trial court’s decision, we find nothing to support the idea that the appellant was charged with any instrument other than the citation issued by the non-qualified officer. Nor can we find from our review of the record that the appellant’s conviction was based upon any evidence except that which resulted from the officer’s illegal arrest of the appellant.

At this point, we note that the Davis and Helms cases relied upon by the state involved similar issues arising from the same trial court that decided the case at bar. We affirmed misdemeanor convictions in both cases and in doing so, we said in Davis that the defendant had not told us whether he was charged only by the non-qualified officer’s citation; in Helms, we stated the defendant failed to show the officer’s citation was the only formal charge. As already mentioned, the record must support the appellant’s conviction before we can affirm it on appeal, and while we may have suggested otherwise in Davis and Helms, it is the state’s obligation to prove its charges against a defendant and, in doing so, establish a record that will support its case on appeal. To the extent our holdings in Davis and Helms place that burden on the appellant, we reverse them. See Grable v. State, 298 Ark. 489, 769 S.W.2d 9 (1989).

Because the Bradford city police officer was non-qualified at the time he arrested the appellant and the appellant’s conviction was based solely on the non-qualified officer’s citation, we must reverse and dismiss this cause.

       The state contends we should not address the merits of this appeal because the appellant failed to introduce the pertinent regulations at the trial. However, this court has held that trial courts can take judicial notice of such rules and regulations of boards and agencies which are adopted pursuant to law. Seubold v. Fort Smith Special School Dist., 218 Ark. 560, 237 S.W.2d 884 (1951).


author: David Maddox, Special Justice.

text:
    Arleva PAYNE v. FARM BUREAU MUTUAL INSURANCE COMPANY OF ARKANSAS, INC.
    88-158
    768 S.W.2d 543
    Supreme Court of Arkansas
    Opinion delivered May 1, 1989

      Gary Eubanks & Associates, by: Hugh F. Spinks and James Gerard Schulze, for appellant.

      Laser, Sharp, Mayes, Wilson, Bufford & Watts, P.A., by: Ralph R. Wilson, for appellee.
   David Maddox, Special Justice.

This case involves the interpretation of the Arkansas Uninsured Motorist Act, Ark. Code Ann. §§ 23-89-401 — 23-89-405 (1987), and the construction of a contract of insurance. Appellant was a passenger in an automobile being operated by an insured of the appellee, Farm Bureau Mutual Insurance Company of Arkansas, Inc., when a collision occurred. There were others injured in the collision in addition to appellant. The insured, Armenda Mathis, had insurance coverage in the amount of $25,000.00 per person and $50,000.00 per occurrence through the appellee. Appellee settled two claims for a total of $43,000.00, and appellant obtained a judgment against the insured, Armenda Mathis, for $17,500.00. Appellee tendered the sum of $7,000.00 to appellant contending that was the full extent of its liability and coverage amount of $50,000.00 per occurrence. Appellant argued that Armenda Mathis became an uninsured motorist to the extent of the unsatisfied judgment of $10,500.00 and brought suit. The trial court granted summary judgment in favor of the appellee.

The question presented to this court is whether a motorist who carries at least the minimum amount of insurance required by the Motor Vehicle Safety Responsibility Act, Ark. Code Ann. §§ 27-19-601 — 27-19-621 (1987), becomes an uninsured motorist if the policy limits become exhausted. We believe not.

Appellant did not purchase nor contract with the appellee to purchase uninsured motorist coverage. Appellee’s insured Armenda Mathis did, however, purchase uninsured motorist coverage. The purpose of uninsured motorist coverage is to protect the appellee’s insured from financially irresponsible motorists. Childers v. Southern Farm Bureau Casualty Insurance Co., 282 F. Supp. 866 (E. D. Ark. 1968). See also Howard v. Grain Dealers Mutual Insurance Co., 342 F. Supp. 1125 (W. D. Ark. 1972); First Security Bank v. Doe, 297 Ark. 254, 760 S.W.2d 863 (1988); Aetna Insurance Company v. Smith, 263 Ark. 849, 854, 568 S.W.2d 11, 14 (1978). In appellee’s policy, an uninsured auto is one defined as:

1. An auto not insured by a liability policy or bond at the time of accident;
2. An auto which is insured by a liability policy or bond at the time of the accident but the liability limits are less than the minimum amounts required by the financial responsibility law in the state where your policy is issued;
3. A “hit and run” auto, whose owner or driver remains unknown, which has actual physical contact with you or other covered persons, or the auto being occupied. Your injury must be a result of the accident. You must report a “hit and run” accident within 24 hours to the police. You must file with us in thirty (30) days a statement about the accident and all damages claimed. The auto you were in at the time of the accident must be available for our inspection;
4. An auto for which the insuring company becomes insolvent within one year from the date of the accident and is unable to make payment.

Armenda Mathis was not a financially irresponsible motorist. She had purchased the required coverage and that amount of money was available to the claimants as a group.

She was not an uninsured motorist simply because her policy limits were exhausted. There are provisions in the law and in appellee’s contract of insurance to provide relief if a claim is not paid because of the insolvency of an insurance company or if a motorist failed to carry the minimum coverage required by the Motor Vehicle Safety Responsibility Act. However, neither of those apply in this case.

Armenda Mathis was not by definition an uninsured motorist nor was she operating an uninsured automobile, and appellee has no exposure under the uninsured motorist provision of its contract.

Affirmed.

Glaze, J., not participating.


author: Joe D. Woodward, Special Justice. Tom Glaze, Justice, concurring.

text:
    GRAND PRAIRIE SAVINGS AND LOAN ASSOCIATION, Stuttgart, Arkansas, The Hayden Trust, First Presbyterian Church, Jonesboro, Arkansas, and First State Bank of Crossett v. WORTHEN BANK AND TRUST CO., N.A.
    88-118
    769 S.W.2d 20
    Supreme Court of Arkansas
    Opinion delivered May 1, 1989
    [Rehearing denied May 30, 1989.]

      Malcolm R. Smith, P.A., for appellant Grand Prairie Savings and Loan Association and the Hayden Trust.

      Paul S. Rainwater, for appellant First State Bank of Crossett.

      H. William Allen, P.C., by: H. William Allen and Sandra Jackson, for appellee.
   Joe D. Woodward, Special Justice.

This matter comes before this court on appeal of a partial summary judgment entered by the trial court. The lower court held that loan participations are not securities under the Arkansas Securities Act, Ark. Code Ann. § 23-42-102 (1987).

Sun Belt Federal Bank, FSB, of Lake Providence, Louisiana, agreed to make a loan to BFC 8, Ltd., a limited partnership, for the purpose of building a six story, multi-tenant office building in Baton Rouge, Louisiana. The limited partnership executed and delivered its promissory note in the amount of eight million three hundred fifty thousand dollars ($8,350,000) to Sun Belt Federal Bank. Sun Belt Bank retained a small percentage of the loan, and sold the balance of the loan, in loan participations, to others.

The appellee, Worthen Bank & Trust Company, N.A., was engaged by Sun Belt to help sell participations in the loan. Worthen subsequently prepared an offering memorandum and offered participations in the loan for sale on a commission basis. The appellant, Grand Prairie Savings and Loan, purchased a $300,000 participation, and the appellant First State Bank purchased a $200,000 participation.

The BFC, Ltd. office building project failed and the appellants sued Worthen under the Arkansas Securities Act and for common law fraud, maintaining that the loan participations were “securities” under Ark. Code Ann. § 23-42-102 (1987). The trial court entered a partial summary judgment in favor of Worthen, ruling that the loan participations were not “securities” under section 23-42-102 and left the common law fraud claims pending for trial. On the day of the trial, the appellant, Grand Prairie Savings and Loan Association, took a non-suit as to its common law fraud claims. First State Bank of Crossett went to trial on its claim of common law fraud and a jury returned a verdict in favor of Worthen. That verdict is not here on appeal.

The only issue for this court to decide is whether the trial court correctly determined, by summary judgment, that the loan participations involved are not securities under the Arkansas Securities Act.

The appellants contend that the loan participations which they purchased were notes and, as such, were securities under section 23-42-102.

The appellee, on the other hand, contends that the court below properly interpreted the language of the Arkansas Securities Act and correctly held, as a matter of law, that the loan participations purchased by the plaintiffs were not securities within the meaning of the Arkansas law.

This court holds that the trial court correctly found that the subject loan participations, when viewed under the circumstances of this particular case, as described by the pleadings, admissions, depositions, .affidavits offering memorandums, and answers to interrogatories, were not securities within the meaning of Ark. Code Ann. § 23-42-102.

The Arkansas Court of Appeals has held that “securities” under the Arkansas Securities Act are properly found when a transaction is an “investment in the risk capital of a venture with an expectation of benefits but with a lack of control on the part of the investor.” Smith v. State, 266 Ark. 861, 587 S.W.2d 50 (Ark. App. 1979). The test used in Smith, supra, is substantially the same as the test- used in the federal courts. Union National Bank v. Farmers Bank, 786 F.2d 881 (8th Cir. 1986).

This court has held that “the definition of what constitutes a security must necessarily depend on an analysis of all of the factors in any given transaction.” Schultz v. Rector, Phillips, Morris, Inc., 261 Ark. 769, 552 S.W.2d 4 (1977). While Schultz involved the question of whether a “joint venture interest” was a “security” under the Arkansas Securities Law, the same principle applies to loan participations. The definition section of the Arkansas Securities Law, section 23-42-102, clearly indicates that the term “security” as used in the Act should be construed in its ordinary sense “unless the context otherwise requires.” The purpose of the Act is clearly remedial and is intended to prevent fraudulent practices and activities from becoming a burden upon unsophisticated investors and the general public. Here, the affected parties are longtime professional bankers engaged in an isolated commercial transaction. Bankers are presumed to be sophisticated in banking and financial activities to the extent that they should not need protection from one another. The Hayden Trust, which is no longer a party to this appeal, is not a bank. However, the evidence in the lower court disclosed that its portfolio of investments was being overseen and operated by a bank president who was sophisticated in loan participations and financial affairs generally. The fact that the Trust purchased a loan participation does not alter the fact that the participations were transactions between banks and bankers.

The “context” of the Arkansas Securities Law clearly indicates that this type of isolated commercial transaction was never intended to be covered by the Arkansas Securities Act. Union National Bank v. Farmers Bank, supra; American Fletcher Mortgage Company v. U. S. Steel Credit Corporation, 635 F.2d 1247 (7th Cir. 1980).

This court has previously held that on motions for summary judgment, the burden, in the trial court, is upon the movant and the proof submitted should be viewed in the light most favorable to the party resisting the motion. The court below properly placed this burden on the appellee and then correctly considered the pleadings, admissions, depositions, affidavits offering memorandums, and answers to interrogatories in finding that, as a matter of law, the loan participations were not “securities” under the Arkansas Securities Law.

On the basis of all the evidence presented in the court below, there appears to be no genuine issue of material fact and the partial summary judgment was therefore appropriate. See Ray v. Shelby Mutual Ins. Co., 14 Ark. App. 265, 266, 687 S.W.2d 526, 527 (1985); Moller v. Thies Realty, Inc., 13 Ark. App. 266, 683 S.W.2d 239, 241 (Ark. App. 1985).

AFFIRMED.

Glaze, J., concurs.

Dudley, J., not participating.

Tom Glaze, Justice, concurring.

I agree with the results reached in this case, but I am concerned with the majority’s reliance on the fact that only banks were involved in the loan participations. By such reliance, the majority seems to ignore the fact that there was a public offering in this case. The offering memorandum was directed to financial institutions and qualified individual investors. As the facts of this case show, a charitable trust, the Hayden trust, was a participant and a party to the lawsuit until its claim was settled with Worthen.

While I agree that the sophistication and knowledge of the parties should be considered by the court, I submit there are other, more important, factors that should determine the outcome of this case. For instance, in my opinion, the transaction fails to meet the definition of a security under the test set out in S.E.C. v. Howey Co., 328 U.S. 293 (1946). One of the prongs of the Howey test is that there should be a reasonable expectation of profits from the investments in a venture. I find persuasive the argument that interest obtained from a loan shows not an investment premised upon a reasonable expectation of profits, but a commercial loan transaction. See American Fletcher Mortg. Co. v. U.S. Steel Credit Corp., 635 F.2d 1247 (7th Cir. 1980).

One might question whether my reference to the so-called Howey test is appropriate, since it has been suggested this court has not adopted that test, preferring instead the view adopted by Minnesota in Minnesota v. Investors Security Corp., 297 Minn. 1, 209 N.W.2d 405 (1973). See Schultz v. Rector-Phillips-Morse, Inc., 261 Ark. 769, 552 S.W.2d4 (1977); see also Note, A Definition of “Investment Contracts" and Equitable Defenses to Suit for Rescission for Nonregistration Under the Arkansas Securities Act, 1 UALR L.J. 366, 375 (1978) and Note, Securities Law Partnerships Adoption of an Expansive Test for Defining a Security, 11 UALR L.J. 369, 373 (1988-89). In spite of such a suggestion, I point out that, in reaching its decision, the majority court places substantial reliance on the cases of Union National Bank v. Farmers Bank, 786 F.2d 881 (8th Cir. 1986), and American Fletcher Mortg. Co. v. U.S. Steel Credit Corp., 635 F.2d 1247(7th Cir. 1980), and that the courts in both of these cases applied the Howey test when reaching their respective decisions. In this same vein, I note that the Arkansas Court of Appeals, in its decision in Smith v. State, 266 Ark. 861, 587 S.W.2d 50 (Ark. App. 1979), relied on a test substantially similar to the Howey test. See also Union Nat. Bank of Little Rock v. Farmers Bank, 786 F.2d at 885.

While not diminishing the importance of the fact that bankers were the participants in the transactions here, I believe the decisive factor, when considering the security issue, is that the transactions revealed participation in what amounted to a standard commercial loan, not an investment. In sum, I am convinced the state securities law was not intended to cover such bank loans.

       (The Hayden Trust, First Presbyterian Church, Jonesboro, Arkansas, purchased a $250,000 participation and was originally an appellant on appeal, however, the Hayden Trust and Worthen reached a settlement before the matter reached this court. The Hayden Trust is no longer a party to this appeal.)

       Section 23-42-102 provides, in part, that “As used in this Chapter, unless the context otherwise requires: *** (13) “Security” means any “note; stc"'., treasury stock; bond; debenture; evidence of indebtedness; other certificate of interest or participation in any of the profit sharing agreement — ”, (Underscoring supplied.)

       Arkansas cases on the subject of defining the term security are not models of clarity, and in my mind at least, the court must better define which test and what factors it will consider when confronted with this issue.


author: Per Curiam.

text:
    Gerland Lee GASS v. STATE of Arkansas
    CR 89-50
    769 S.W.2d 24
    Supreme Court of Arkansas
    Opinion delivered May 1, 1989

      Q. Byrum Hurst, for petitioner.

      Steve Clark, Att’y Gen., by: Theodore Holder, Asst. Att’y Gen., for respondent.
   Per Curiam.

The petitioner Gerland Lee Gass was found guilty by a jury of the offense of conspiracy to deliver a controlled substance, cocaine, and sentenced to thirty years imprisonment in the Arkansas Department of Correction. A fine of $15,000 was also imposed. The Court of Appeals affirmed. Gass v. State, 17 Ark. App. 176, 706 S.W.2d 396 (1986). He now seeks post-conviction relief pursuant to Criminal Procedure Rule 37.

Rule 37.2(c) provides that a petition claiming relief under the rule must be filed within three years of the date of entry of judgment, unless some ground for relief would render the judgment for conviction absolutely void. The judgment and commitment in petitioner’s case were entered on November 9, 1984. Petitioner contends that the three year period should be figured from the date the Court of Appeals affirmed his conviction, but this is not a correct reading of the rule. See Collins v. State, 271 Ark. 825, 611 S.W.2d 182 (1981). As petitioner has alleged only that his attorney was ineffective at trial, an allegation which is not sufficient to void a judgment absolutely, the petition is dismissed.

Petition dismissed.


text:
    Carthel J. HODGES, Sr. v. Mary Ann HODGES
    89-122
    771 S.W.2d 741
    Supreme Court of Arkansas
    Opinion delivered May 1, 1989

      Herrods of Arkansas, P.A., by: E.H. “Buz” Herrod, for petitioner.

      Steve Clark, Att’y Gen., by: Paul Cherry, Asst. Att’y Gen., for respondent Pulaski County Chancery Court, Second Division.
   Per Curiam.

We deny the petitioner’s request for a writ of prohibition, but we do so because the record and orders presented to us are unclear. In denying such relief, we in no way intend to give validity to the standing master order entered below, but assume that any issue addressing that point would be presented to us along with any other in any appeal.

Hickman, J., not participating.


author: Per Curiam. Darrell Hickman, Justice, Tom Glaze, Justice,

text:
    James C. POOLE v. Arlene POOLE
    RC 89-2
    768 S.W.2d 544
    Supreme Court of Arkansas
    Opinion delivered May 1, 1989

      Knauts & Cole, by: C.W. Knauts, for appellant.
    No response.
   Per Curiam.

We denied the appellant’s motion for a rule on the clerk on February 27,1989. His petition for rehearing is also denied. The trial court denied his postjudgment motion for a new trial on May 24,1988. His Notice of Appeal was filed on June 3, 1988. The trial court erred in granting seven (7) months from the Notice of Appeal in which to lodge the record.

The appellant relies on Pentron Corp. v. Delta Steel & Const. Co., 286 Ark. 91, 689 S.W.2d 539 (1985). In Pentron we stated: “The confusion that has arisen is attributable to the wording of the next to the last sentence in Rule 5(b). On the date of this opinion we are also amending that troublesome sentence, effective today, [May 20, 1985].” On that date we issued a per curiam stating that next to the last sentence of Rule 5(b) was amended to read as follows:

In no event shall the time be extended more than seven (7) months from the date of the entry of the judgment, decree or order, or from the date on which a timely post-judgment motion under Rule 4(b) is deemed to have been disposed of under Rule 4(c), whichever is later.

The next to the last sentence of Rule 5(b) formerly read:

In no event shall the time be extended more than seven (7) months from the date of the entry of the judgment, decree or order.

Neither version of the rule ever provided that the seven (7) months run from the date of entry of the Notice of Appeal.

Holt, C.J., Hays and Glaze, JJ., dissent.

Hickman, J., concurs.

Darrell Hickman, Justice,

concurring. I have come to the conclusion that it is hazardous for a lawyer to file any motion for post-judgment relief. He will enter a maze of our rules and our decisions which qualifies for the legal “Serbonian Bog” award (which, no doubt, Justice Cardozo intended to establish by his dissent in the case of Landress v. Phoenix Mutual Life Ins. Co., 291 U.S. 491 [1934]).

Tom Glaze, Justice,

dissenting. The appellant’s failure to file a timely transcript in this matter is due to confusion that resulted from language this court used in Pentron Corp. v. Delta Steel & Constr. Co., 286 Ark. 91, 689 S.W.2d 539 (1985). For that reason, I would grant appellant’s request to lodge his transcript.

Appellant appeals from a judgment which was entered on April 18,1988. After the trial court, on May 24,1988, denied his motion for a new trial, appellant filed a timely notice of appeal on June 3, 1988. The trial court granted the appellant a full seven months extension from the date of the notice of appeal — or until January 3, 1989 — to lodge his transcript. Although appellant tendered the transcript prior to January 3, 1989, the supreme court clerk refused to file the transcript because appellant failed to meet the time constraints set out in Ark. R. App. P. 5. In relevant part, Rule 5(b) provides as follows:

In no event shall the time be extended more than seven (7) months from the date of the entry of the judgment, decree or order, or from the date on which a timely postjudgment motion under Rule 4(b) is deemed to have been disposed of under Rule 4(c), whichever is later.

In calculating and using the seven month extension from either the date of judgment (April 18, 1988) or the date when appellant’s motion for new trial was denied (May 24,1988), it is conceded appellant was late. He was timely only if his seven month extension commenced from the date he filed his notice of appeal.

Prior to the Pentron case, Rule 5(b) provided that in no event shall the time be extended more than seven months from the date of entry of the judgment, decree or order. In Pentron, we cited Sherrell v. Byram, 260 Ark. 908, 545 S.W.2d 603 (1977), where we held the seven months must be calculated from the date of the order denying the motion for new trial. We said in Pentron that the rule in Sherrell was the better rule but also added the following:

“. . . [A] final disposition of the case in the trial court is reached before the notice of appeal must be filed under Rule 4. Rule 5 must then be observed in the preparation of the record and its filing with the clerk of the appellate court. That process should logically date from the notice of appeal, not from the entry of a judgment perhaps some months earlier. Even more important, until a motion for a new trial is acted upon, it cannot be lyiown which party will be the appellant, for by Rule 2(a)(3) an order either granting or denying a new trial is appealable. (Emphasis added.)

Following the foregoing language, we concluded that the next to the last sentence in Rule 5(b) — the sentence providing an extension from the date of judgment — caused confusion; we then proceeded to amend that sentence the same date Pentron was decided. In doing so, the court made no reference to the date when the notice of appeal was filed but instead provided the seven months was to be extended from the date of the entry of the judgment, decree or order or from the date on which a timely postjudgment motion under Rule 4(b) is deemed to have been disposed of under Rule 4(c), whichever is later.

Although the amendment made to Rule 5(b) is clear that the extension time is to begin when the judgment is filed or when a postjudgment motion is denied, I believe our language in Pentron was misleading where we noted that the process should logically date from the notice of appeal. The appellant should not be penalized because the court was not as clear as it should have been. The appellant tendered the transcript within seven months from his notice of appeal, and I would allow him to lodge it.

Holt, C.J., and Hays, J., join this dissent.


author: Jack Holt, Jr., John I. Purtle, Justice,

text:
    Edward GAY, Jr., et al. v. The CITY OF SPRINGDALE, Arkansas and Washington Board of Election Commissioners
    88-271
    769 S.W.2d 740

    Supreme Court of Arkansas
    Opinion delivered May 8, 1989

      Evans & Evans, by: James E. Evans, Jr., for appellant.

      Jeff C. Harper, City Att’y and Michele A. Harrington, Deputy City Att’y, for appellee.

      REPORTER’S NOTE: Justice Purtle’s dissenting opinion can be found at 774 S.W.2d 828.

   Jack Holt, Jr.,

Chief Justice. Appellants Edward Gay, et ah, challenge the annexation of four tracts of land by the City of Springdale, Arkansas. We hold that the land was properly annexed and affirm.

In 1983, the City of Springdale annexed approximately 7,000 acres of contiguous land pursuant to Ark. Stat. Ann. §§19-301 — 19-339 (Repl. 1980), currently Ark. Code Ann. §§ 14-40-201 — 14-40-607 (1987). The Washington County Circuit Court upheld the annexation. This court reversed the decision of the trial court, holding that the proof was insufficient that the annexed land met any one of the five criteria required for annexation by Ark. Code. Ann. § 14-40-302(a) (1987). See Gay v. City of Springdale, 287 Ark. 55, 696 S.W.2d 723 (1985).

On September 22, 1987, the Springdale City Council adopted an ordinance pursuant to Ark. Code Ann. § 14-40-301 (1987) by which it set a special election to determine whether four tracts of land contiguous to the City, totalling approximately 7,300 acres, should be annexed. This land, which is the subject matter of the present appeal, is in the same general area as the land involved in the 1983 proposed annexation. At a special election, the voters approved the annexation. Thereafter, appellants, owners of land in the four tracts that were annexed, filed a complaint in circuit court challenging the annexation. At trial, the following facts were established concerning the annexed tracts:

Tract one: Tract one consists of fruit orchards, poultry houses, vineyards, grassland, commercial enterprises, residential subdivisions, and an industrial subdivision. AeroTech Corporation has bought land in tract one where it plans to build a 50,000 square foot building.
Tract two: Tract two consists of farm land and two residential subdivisions.
Tract three: Tract three consists of twenty-nine poultry houses, thirty-two homes, two residential subdivisions, and large areas of bare land.
Tract four: Tract four consists of bare land, a hog farm, a chicken operation, pasture land, a seventy-acre industrial park currently being developed, and 300 acres of roughly wooded land with ravines and gullies. There are no subdivisions in tract four. However, there is property that has recently been purchased for a subdivision.

After hearing testimony from sixteen witnesses and reviewing numerous exhibits, the trial court found that all four tracts met at least two of the criteria contained in Ark. Code Ann. § 14-40-302(a)(2) — (a)(5) (1987). The court also found that the tracts met the requirement of Ark. Code Ann. § 14-40-302(b)(1)(A) (1987), that the lands have a highest and best use and fair market value for other than agricultural or horticultural purposes. As a result, the circuit court denied the petition, holding that the appellants failed to meet their burden of proof for exclusion of their lands from the annexation. From this order, appellants appeal.

Appellants contend that the trial court erred by failing to deny the petition for annexation when a substantial portion of the lands to be annexed failed to meet any of the five criteria set forth in Ark. Code Ann. § 14-40-302(a). We disagree.

Our law concerning annexation is well established. A majority of electors voting in favor of annexation makes a prima facie case for annexation, and the burden rests on those objecting to produce sufficient evidence to defeat the prima facie case. Gay, supra. Holmes v. City of Little Rock, 285 Ark. 296, 686 S.W.2d 425 (1985); City of Crossett v. Anthony, 250 Ark. 660, 466 S.W.2d 481 (1971). Appellants have the burden of showing the area in question should not be annexed. Chastain v. Davis, 294 Ark. 134, 741 S.W.2d 632 (1987). By the very nature of this type of litigation, there is a wide latitude for divergence of opinion and, consequently, a high degree of reliance must be placed upon the findings of the trial judge. Lewis v. City of Bryant, 291 Ark. 566, 726 S.W.2d 672 (1987).

We do not reverse the trial court’s findings unless they are clearly erroneous. Id. In viewing such findings, we consider all evidence in a light most favorable to the appellee. Jernigan v. Cash, 298 Ark. 347, 767 S.W.2d 517 (1989).

Section 14-40-302(a) provides that a city may annex lands contiguous to the city if the lands are either:

(1) Platted and held for sale or use as municipal lots;
(2) Whether platted or not, if the lands are held to be sold as suburban property;
(3) When the lands furnish the abode for a densely settled community or represent the actual growth of the municipality beyond its legal boundary;
(4) When the lands are needed for any proper municipal purposes such as for the extension of needed police regulation; or
(5) When they are valuable by reason of their adaptability for prospective municipal uses.

The five criteria listed in this provision are disjunctive, and the annexation may be proper when any one of the five conditions is met. Gay, supra; Lee v. City of Pine Bluff, 289 Ark. 204, 710 S.W.2d 205 (1986); Faucett v. Atkins, 248 Ark. 633, 453 S.W.2d 64 (1970). If one of the several tracts is found to be improperly included, the entire annexation must fail. Gay, supra; Herrod v. City of North Little Rock, 260 Ark. 890, 545 S.W.2d 620 (1977).

The fact that land is agricultural and the owner does not want it developed does not determine its fate as to annexation. Lee, supra; Planque v. City of Eureka Springs, 243 Ark. 361, 419 S.W.2d 788 (1967). Annexation is not prohibited solely because a tract is rather rugged or heavily wooded with sparse population. Chappell v. City of Russellville, 288 Ark. 261, 704 S.W.2d 166 (1986); Holmes, supra. It is proper for a city to annex property if it is needed for the purpose of making improvements and if the value of the land is derived from actual and prospective use for city purposes. Holmes, supra. Brown v. Peach Orchard, 162 Ark. 175, 257 S.W. 732 (1924).

The trial court found that all four tracts met the fourth criterion of Ark. Code Ann. § 14-40-302(a). To meet this criterion, lands must be needed for any proper municipal purposes such as for the extension of needed police regulation. Several witnesses testified in this regard. Tom Reed, an expert witness for defendant-appellees, testified that all four tracts are needed for proper municipal purposes and that the City had a 16% increase in residential building permits between 1985 and 1986 and a 29% increase between 1986 and 1987. Bob Harlan, an employee of the Northwest Arkansas Planning Commission and a planner for Springdale, testified that Springdale is expected to grow 20 % in the next seven years; that the City has proper municipal purpose for controlling orderly growth in all four tracts; and that annexation would serve that purpose.

Andre Houser, the City’s administrative assistant to the Mayor, testified that the lands in tracts one and two, which contain “enterprise zones,” are needed by the City for the proper municipal purpose of providing new and expanded employment opportunities. An “enterprise zone” provides businesses and industries located therein certain state income tax exemptions for employees as well as certain sales and use tax refunds for material and machinery used in expansion or construction. Before an enterprise zone may be “activated,” it must be inside the city limits.

Daniel White, the Springdale Fire Chief, testified that if the tracts are annexed, the fire department can provide fire service to the annexed areas. In addition, he asserted that the department has had trouble responding to calls because it is often difficult to tell whether a caller is in the City or in tract four. Trumann Brewer, the Springdale Chief of Police, testified that if the tracts are annexed, the department can provide police service to annexed area. .He also stated that it will be easier to provide service if the area is annexed since the police will know whether or not callers are in the City.

Rene Langston, Executive Director of the Springdale Water and Sewer Department, testified that the City needs to annex the area for sewer and water planning purposes. Roy Bowman, a Springdale City Councilman, stated that there is growth in all four tracts and that Springdale needs the annexation for orderly growth and development and police and fire protection. Harold Vowell, a local developer, testified that there is a shortage of lots in Springdale and that no land suitable for a subdivision is available in the City limits.

In light of this extensive testimony that the lands are needed for proper municipal purposes, we conclude that the trial court’s finding that all four tracts met the fourth criterion is not clearly erroneous. Since the tracts must meet one of the criteria of Ark. Code Ann. § 14-40-302(a) for annexation to be proper, we find it unnecessary to address the trial court’s findings regarding the other criteria.

Appellants also contend that the trial court’s finding that they failed to prove their lands to have a fair market value at the time of the adoption of the ordinance of lands used only for agricultural or horticultural purposes and the highest and best use of the land is for such purposes is contrary to the law when applied to the facts and testimony in evidence. We disagree.

Section 14-40-302(b)(l)(A) provides that contiguous lands shall not be annexed if they:

Have a fair market value at the time of the adoption of the ordinance of lands used only for agricultural or horticultural purposes and the highest and best use of the lands is for agricultural or horticultural purposes.

Appellants’ point of contention is that the defendant-appellees’ expert witness, Tom Reed, was “forecasting” land use and values when he claimed that the highest and best use and fair market value of the annexed land at the time of the adoption of the ordinance was for other than agricultural or horticultural purposes. Reed’s overall testimony reflects otherwise.

Tom Reed testified that after examining sales in the annexed areas in the last two years, he found that (1) there have been numerous residential and commercial sales in all four tracts; that (2) an investor cannot buy land in the tracts for agricultural or horticultural use and get a positive return; that (3) many investors are speculating by buying land for investment purposes and putting chickens on the land for interim use; that (4) the prices paid, as indicated by the prices in the real estate market, do not indicate the land in the four tracts to have a fair market value for agricultural or horticultural purposes or the highest and best use for such purposes; that (5) the highest and best use for some of the landowners is agricultural; that (6) the highest and best use is a market concept, not an individual concept; that (7) highest and best use is a long-term concept, not a present concept; that (8) he is forecasting; that (9) he is not talking about the future, but the highest and best use at the time the ordinance was passed; and that (10) some of the land in the annexation is not ready for immediate development and has an interim agricultural use until the growth, trends, and supply and demand cause it to change.

Although Reed during the course of his testimony characterized his opinion as “forecasting,” he-specifically stated that he was not talking about highest and best use in the future but at the time the ordinance was passed. The trial court, faced with this apparent inconsistency, had no trouble concluding that his testimony and the evidence established that the highest and best use and the fair market value of the land in all four tracts was for other than agricultural or horticultural purposes. Under the circumstances, we defer to the judgment of the trial court. We cannot say that the trial court’s finding is clearly erroneous.

Finally, appellants contend that Ark. Code Ann. § 14-40-302 violates the due process clause of the United States and Arkansas Constitutions in that it (1) permits the “taking” of property without just compensation and (2) impermissibly dilutes the voting rights of residents in the area to be annexed since an annexation can be approved even if a majority of the voters in the area oppose annexation.

Since appellants neither cite authority nor make convincing argument in support of this point of error, we do not consider it. It is well established that we do not consider arguments on appeal that are unsupported by convincing argument or authority, unless it is apparent without further research they are well taken. McGuire v. Bell, 297 Ark. 282, 761 S.W.2d 904 (1988).

Affirmed.

Hickman and Purtle, JJ., dissent.

John I. Purtle, Justice,

dissenting. It seems that if it were left entirely to the cities, there would be no land in Arkansas outside municipal boundaries. This court is apparently of the same opinion, except that it would require a formal vote, primarily of city residents, before farms, ranches, orchards, and other agricultural or horticultural lands may be annexed. Neither the cities nor this court seem to consider the actual and natural uses of these lands. Nor do they consider the wishes of the landowners or the people in the community. I submit that this annexation (to say nothing of most others) results from municipal desires to receive more revenue. Usually, no services are promised for a period of three years, and frequently they take even longer to materialize. The result is that the existing cities receive immediate monetary benefits from the annexed areas while giving very little, if anything, in return. (Sometimes the services never reach pre-annexation standards.)

There is a pattern discernable in every annexation attempt that is presented to this court. The police chief and the fire chief, who function as agents of a city’s governing body, always testify that they need the proposed area of annexation in order to protect it. It would be highly unusual for an official of any city to object to what his employer is proposing. In this case the testimony of the police and the fire chiefs was that if the land were annexed, they would be able to give better service because they would then know that it is within the city limits. It is a mystery to me how they will be able to know that this land is within the municipal boundaries after annexation when they evidently do not know where the city limits are at the present time.

There has been no showing that the annexed land is needed for municipal purposes. These are the exact same lands that were annexed in 1983, with a few hundred acres added. The 1983 annexation was voided because the overwhelming bulk of the land was held for investment or agricultural purposes. The opinion stated:

First, the proof was clear that most of the land was neither platted nor held for sale as municipal lots. Second, the proof was overwhelming that the bulk of the land is held for investment purposes, agricultural purposes, or to be sold as two-to-five acre “farmettes.” Therefore, it was not held to be sold as suburban property. Third, there are only 700 homes and 2,500 people in the entire 7,000 acres. Obviously, the tracts represent neither a densely settled area nor the actual growth of the city beyond its boundary. In fact, the appellees’ testimony was entirely in terms of the future growth of the city beyond its boundary. Fourth and fifth, a number of witnesses testified by stipulation that “ [t] he lands are not needed for municipal purposes and are not adaptable for municipal purposes.” These actual stipulations are not contradicted by opposing testimony. In view of the evidence, the proof is clear that the lands did not meet any one of the criteria set forth in the first paragraph of the annexation statute. Therefore, the lands are not eligible for annexation.

Gay v. City of Springdale, 287 Ark. 55, 696 S.W.2d 723 (1985).

After defeat, by the court, of the last attempted annexation of this land, the City of Springdale devised a scheme to get this court to approve the annexation. It worked. The plan was to break the land up into tracts and put a small portion of each tract in a use for something other than agricultural or horticultural purposes. All of the houses, barns, subdivisions, enterprise zones, and industrial areas could be placed together on one of these tracts and still have hundreds of acres left. There is absolutely no dispute by any witness that the vast majority of the lands in all four tracts is neither platted or held for city use or development nor designated for anything other than agricultural or horticultural purposes. Under this theory of annexation, a city could locate a plot of ground with a few houses on it and use it as a basis for annexing 10,000 acres of wild, unenclosed agricultural and horticultural lands. This, in my opinion, was never the intent of the legislature. Annexation is now limited only by the projections of city planners and sophisticated developers. It should, however, be limited by laws enacted by the General Assembly since that body is the giver of life to all cities.

I realize that I may as well be hissing in the wind for all the effect this dissent will have on this court and the cities. However, I must express my opinion on annexation, perhaps for the last time. In the present case, both the burden of the election and the proof of the suitability for annexation is on the non-resident citizens. Annexation laws in this state are about as fair as allowing Texas to vote on annexing Arkansas with the results to be determined by a vote of the combined population of the two states.

The city’s witnesses as well as the appellants’ witnesses all agreed that much of the annexed property is held in agricultural status and that there are thousands of acres with no roads, no water and sewer, no improvements, no plattings and nothing to indicate that the property is held for development purposes. Most of the remainder of the land consists of orchards, chicken ranches, and hog farms. No city ever furnishes water and sewer services. These are paid for entirely by taxpayers and property owners through the establishment of improvement districts.

The city’s own expert, Tom Reed, testified that most of the land in each of the four tracts has not been platted and is not held for municipal purposes. He further admitted that none of the tracts were totally adaptable for city purposes. I have never yet seen an expert who did not have, where developments are concerned, an imagination that exceeded the bounds of reason. The vast majority of annexed land is used for agricultural and horticultural purposes. At the time of the adoption of the annexation ordinance, the highest and best use of the lands was for agricultural and horticultural purposes. That is an undisputed fact revealed by the record.

The city’s chief spokesman at trial testified that the city needed all of these tracts of lands for orderly growth and development in the future. That is pure speculation and, at the very least, future planning. The existing law prohibits annexation of lands which, at the time of the adoption of the annexation ordinance, are used for agricultural or horticultural purposes when the highest and best use of such lands is for those purposes. There is no testimony to dispute that much of the land in each of the four parcels is unsuitable for annexation.

The city, as expected, attempted to show by testimony of sophisticated developers that the land was used for agricultural and horticultural purposes only on an interim basis. The same observation could have been made of most of the United States at the time the first cities were developed. Mr. Reed, the city’s expert in land use, stated that the property of Smith, Hash, McGuire, and Cargill had a current highest and best use as agricultural lands. This was the same testimony that he had given in 1983. Neither the law nor the land has changed since that time.

According to the record, the only difference in the situation nowand in 1983 is that there are 1,000 houses and 2,700 peoplein the proposed annexed area, whereas in 1983, there were 700 houses and 2,500 people. The difference appears to be that the city added an area which includes a number of residences or a subdivision. The true motive of the city was revealed when its witnesses admitted that it would immediately start gaining $465,780.00 annually in new revenue upon annexation. It will, of course, receive several million dollars in revenue before it ever spends a dime or offers any real services to the area.

Finally, I agree with the appellants that the annexation laws violate the state and federal constitutions by denying due process and equal application of the laws to the people in the area annexed. The surrounding landowners and taxpayers are going to be giving the city at least $465,000.00 for three years before the city even proposes to offer any services to them. It appears to me that this matter is clearly subject to article 2, section 2, of the Constitution of the State of Arkansas, which prevents the government from taking property without just compensation. It is also clearly a violation of the United States Constitution’s prohibition against the taking of private property without just compensation. If a city were required to give the same services to an annexed area that it does to existing parts of the municipality, then I am sure annexation would' slow to a snail’s pace. Each annexation of large areas causes residents of the central part of a city to move out into the suburban areas, thus leaving an undesirable, unprotected central city to those who would plunder and establish a habitat for crime. If cities were to develop good and workable programs that prove beneficial to their inhabitants, residents of outlying areas would strive for annexation. Annexation can be accomplished by a petition of the adjoining landowners if it is their desire to become a part of the city.


author: Jack Holt, Jr., Chief Justice.

text:
    James Earl NEAL v. STATE of Arkansas
    CR 88-208
    769 S.W.2d 414
    Supreme Court of Arkansas
    Opinion delivered May 8, 1989

      Clinton Keith Jones, Jr., Deputy Public Defender, for appellant.

      Steve Clark, Att’y Gen., by: Kay J. Jackson Demailly, Asst. Att’y Gen., for appellee.
   Jack Holt, Jr., Chief Justice.

James Neal was found guilty of rape and sentenced to life. He argues on appeal that the trial court erred by mechanically accepting the jury’s recommendation of a life term absent any exercise of discretion and that certain evidence should not have been admitted following a break in the chain of custody. We have reviewed these arguments as well as all objections of record decided adversely to appellant. Rule 11 (f) of the Rules of the Supreme Court; Ark. Code Ann. § 16-91-113 (1987). Finding no error, we affirm.

There was no objection to the sentence at the time of pronouncement, and our rule on matters raised for the first time on appeal is well settled; we will not consider them. Addison v. State, 298 Ark. 1, 765 S.W.2d 566 (1989).

The record shows that blood samples taken from Neal after the rape incident were drawn at a hospital by a nurse who labeled and initialed the samples and gave them to a police detective. The officer stored the samples in a refrigerator at the police station. They were later sent to the State Crime Lab, returned to the station, and then stored until trial.

Neal’s objection to the chain of custody is that the refrigerator was not kept locked and was used to store lunches and snacks, thus allowing for the possibility of contamination or tampering. He correctly points out that when an object is subject to positive identification, proof of the chain of custody need not be as conclusive as it should be with respect to interchangeable items, such as the blood samples involved here.

In White v. State, 290 Ark. 130, 717 S.W.2d 784 (1986), we explained that the purpose of establishing a chain of custody is to prevent the introduction of evidence which is not authentic and that minor discrepancies in the chain of custody are for the trial court to weigh. Citing Munnerlyn v. State, 264 Ark. 928, 576 S.W.2d 714 (1979), we said:

To allow introduction of physical evidence, it is not necessary that every moment from the time the evidence comes into the possession of a law enforcement agency until it is introduced at trial be accounted for by every person who could have conceivably come in contact with the evidence during that period. Nor is it necessary that every possibility of tampering be eliminated; it is only necessary that the trial judge, in his discretion, be satisfied that the evidence presented is genuine and, in reasonable probability, has not been tampered with.

Absent evidence of tampering, the trial judge is accorded some discretion in such matters, and we will not reverse the trial judge’s ruling unless we find an abuse of discretion. Gardner v. State, 263 Ark. 739, 569 S.W.2d 74 (1984).

The trial judge determined that the integrity and authenticity of the evidence had been sufficiently established. We agree and note that the refrigerator was in the station’s interview room which was kept locked. Neal’s concern that the samples were stored in an area accessible to officers not working on the case is understandable, but we cannot say that the trial judge abused his discretion in admitting the evidence.

We have reviewed the testimony of the victim and that of the State’s other witnesses. The victim described the rape incident in detail and identified Neal as the rapist. Suffice it to say that the evidence was clearly sufficient to support the jury’s verdict.

Affirmed.


author: Darrell Hickman, Justice.

text:
    Willie Lee HENDRIX v. STATE of Arkansas
    CR 89-16
    768 S.W.2d 546
    Supreme Court of Arkansas
    Opinion delivered May 8, 1989

      Rees Law Firm, by: David Rees and Paul J. Teufel, for appellant.

      Steve Clark, Att’y Gen., by: C. Kent Jolliff, Asst. Att’y Gen., for appellee.
   Darrell Hickman, Justice.

Willie Lee Hendrix was convicted of possession of methamphetamine with intent to deliver and possession of marijuana and received a 41 year sentence. His only argument for reversal is that the trial judge should have granted a new trial because one of the state’s primary witnesses, the chief of police of Truman, talked to several members of the jury panel before or during the trial. We affirm the denial of the new trial.

The judge refused to allow the defense to question jury members before the hearing on the motion. He observed that when the verdict was read the appellant’s mother, his brothers and other relatives jumped up, yelled and shook their fists at the jury. Jerry Bland, the chief of police, "who was also an arresting officer, and two jurors testified that he, Bland, had spoken with them; however, he and the jurors denied anything relevant to the case was discussed.

The testimony of the appellant’s witnesses, Judy Booker and Letha Love, Hendrix’s sister, indicates that the attorneys for both Hendrix and a codefendant, James Shelly, were told of the incident before or during the trial. Hendrix' has different counsel on appeal, and his trial attorney, John Henry, did not testify. The codefendant’s counsel, Chet Dunlap, testified, but was not asked whether he knew of the conversations before the end of the trial.

A claim of jury misconduct raised for the first time in a motion for a new trial must be accompanied by an affirmative showing that the defense was unaware of the comments until after the trial. State v. Bollinger, 560 S.W.2d 606 (Mo. 1978). See also 9 A.L.R.3d 1283 (1966). Since this issue was not raised at the first opportunity, we will not consider it on appeal. See Young v. State, 283 Ark. 435, 678 S.W.2d 329 (1984).

We need not address the question of whether the trial judge erred in preventing counsel from questioning the jurors before the hearings.

Affirmed.


text:
    Jean HYDE, et al. v. Luke QUINN, et al.
    89-117
    769 S.W.2d 24
    Supreme Court of Arkansas
    Opinion delivered May 8, 1989

      Dan J. Kroha, for appellants.

      Wright, Lindsey & Jennings, for appellees.
   Darrell Hickman, Justice.

This is the third appeal involving a suit by taxpayers of Sewer Improvement District #142. In Martin v. Quinn, 294 Ark. 60, 740 S.W.2d 627 (1987), we affirmed the Little Rock Board of Directors’ refusal to remove the district’s commissioners from office. In Henderson Methodist Church v. Sewer Improvement Dist. No. 142, 294 Ark. 188, 741 S.W.2d 272 (1987), taxpayers alleged fraud was committed by the commissioners in assessing property within the district.

In this lawsuit, filed October 16, 1987, taxpayers seek to recover money they claim was wrongfully expended by the commissioners in 1980. The trial court decided their claim was barred by the statute of limitations, but we affirm on the basis of the res judicata and collateral estoppel doctrines.

We disagree with the finding that the statute of limitations had run. The commissioners failed to file a report of their 1980 expenditures until October 17,1984, even though they were required by law to file such reports annually. See Ark. Code Ann. § 14-89-1402 (1987). It was decided in the Martin case that the commissioners’ failure to disclose their activities was not purposely deceitful. But this breach of a legal duty may be interpreted as constructive fraud. See Davis v. Davis, 291 Ark. 473, 725 S.W.2d 845 (1987). Therefore, the statute of limitations should have been tolled between the date of the expenditures and the time the report was filed.

Although a trial court announces the wrong reason for its ruling, we will sustain the judgment if it is correct. Ratliff v. Moss, 284 Ark. 16, 678 S.W.2d 369 (1984). The issues presented in this case were raised or could have been raised in the first and second lawsuits. The taxpayers claim that two contracts made by the district should be declared void because commissioners Quinn and Paschal were directly or indirectly interested in the contracts. One of the central issues in the Martin case was whether the Board of Directors erred in finding that neither of the commissioners was interested in these same contracts. Since that issue has already been litigated and was essential to the judgment in Martin, the doctrine of collateral estoppel prevents the taxpayers from raising it'again. See Smith v. Roane, 284 Ark. 568, 683 S.W.2d 935 (1985).

The taxpayers could have litigated the issue in the Henderson Methodist Church case. In the complaint in that case, the taxpayers made the following claim:

[T]he Commissioners fraudulently paid money either to themselves or to persons or corporations closely associated with themselves, in violation of their oath of office.

The issue was not actually litigated in that case, but it could have been. Therefore, res judicata also precludes the taxpayers from raising this claim. See Swofford v. Stafford, 295 Ark. 433, 748 S.W.2d 660 (1988).

Affirmed.

Glaze, J., not participating.