text:
    IN THE MATTER OF F & M BUILDING PARTNERSHIP v. FARMERS & MERCHANTS BANK, Rogers, Arkansas, et al.
    93-710
    871 S.W.2d 338
    Supreme Court of Arkansas
    Opinion delivered February 21, 1994
    [Rehearing denied March 28, 1994.]

      Richard C. Downing, P.A., by: Richard C. Downing and

      Hardin & Grace, by: David A. Grace, for appellant.

      Lyons & Emerson, by: Scott Emerson, for appellees.
   Tom Glaze, Justice.

At issue in this case is the legal effect of two settlement agreements made in bankruptcy proceedings that involve real property upon which the main building of Farmers & Merchants Bank of Rogers, Arkansas (F & M Bank) stands. In 1984, F & M Bank entered into two leases with F & M Building Partnership, an Arkansas general partnership (F & M) and owner of the realty. F & M leased the land and improvements to F & M Bank through an Agreement of Lease and a Ground Lease.

In 1986, the partners of F & M were Mrs. Charlotte Lloyd and two trusts whose beneficiaries were her two sons. At that time, Mrs. Lloyd was married to Phillip Lynn Lloyd, who was the sole shareholder of Lynxx Limited, Inc. (Lynxx). F & M became involved with Lynxx in the two following transactions: (1) On April 8, 1986, Lynxx borrowed $2,100,000 from First Federal Savings and Loan Association of Paragould (First Federal), Lynxx signed a promissory note for the loan amount; the loan was secured by a mortgage of F & M’s interest in its real estate, building, personal property and assignment of F & M’s rents and revenues, including its interest in the F & M Bank leases. (2) In-a separate document dated April 8, 1986, F & M agreed with Lynxx to secure Lynxx’s note and loan from First Federal in return for Lynxx loaning F & M $1,705,000, which was evidenced by a note dated April 15, 1986. Lynxx’s loan of $1,705,000 to F & M was unsecured and came from the $2.1 million proceeds Lynxx borrowed from First Federal.

On November 6, 1986, Lloyd filed for Chapter 11 bankruptcy, which was later converted to Chapter 7. A trustee was appointed, and during the course of the bankruptcy proceedings, the trustee entered into two separate settlement agreements which involved the above two transactions. In Settlement Agreement #1, dated December 5, 1988, F & M agreed to make its payments owed Lynxx on the $1,705,000 note to First Federal. Settlement Agreement #2 was executed on December 14, 1988, and it acknowledged that Lynxx agreed to First Federal’s right to receive Lynxx’s payments from F & M in return for releasing Lynxx from any future liability. It further provided that First Federal agreed that the $2.1 million loan was “non-recourse” as to Lynxx and that it would not accelerate the $2.1 million loan so long as F & M continued timely payments on the $1,705,000 note.

Before the trustee’s two settlement agreements were approved by the bankruptcy court, the Lloyds divorced, and in their property agreement, they agreed that Mrs. Lloyd would transfer her interest (and their sons’) in F & M to Mr. Lloyd for $50,000. In turn, Mr. Lloyd accepted the assets and liabilities of F & M. Thereafter, the bankruptcy court approved the trustee’s two settlement agreements, and no one objected. Subsequently, the Resolution Trust Corporation, as receiver, took' over First Federal and sold the $2,100,000 Lynxx note to Peoples Bank of Paragould (Peoples).

F & M later failed to make its quarterly payments on the $1,705,000 note. As a consequence, F & M Bank, as a tenant which was current on its lease obligation to F & M, initiated this interpleader and declaratory judgment action requesting the court to declare whether its monthly payments should be paid to F & M or Peoples, which was in present possession of the Lynxx note. Peoples answered and filed a third-party complaint against F & M for foreclosure under the mortgage. F & M answered Peoples, claiming Settlement Agreement #2 had discharged F & M as a surety for Lynxx and asserting that discharge effectively released F & M from its original obligation to First Federal (and now Peoples, which was assigned the $2.1 million note). Under an agreed temporary order of the trial court, F & M Bank continued to make its lease payments to Peoples.

Following a hearing, the chancellor ruled that F & M had not been released of its original loan obligation and the assignment and mortgage securing the loan was a valid first lien on F & M’s bank building and ground lease. The trial court granted Peoples a foreclosure under the $2.1 million note and mortgage, and an in rem judgment of $1,956,173.35, plus accrued interest of $72,935.38, attorney’s fees and costs, and interest against F & M. F & M appeals from that order.

On appeal, this court tries chancery cases de novo on the record while considering the evidence in a light most favorable to the appellee. Further, this court will not reverse a finding of fact made by the chancellor unless it is clearly erroneous. Ingram v. Wirt, 314 Ark. 553, 864 S.W.2d 237 (1993).

For reversal, F & M relies on its argument that it was a surety for Lynxx under the $2.1 million loan from First Federal. Because Lynxx was released under bankruptcy agreement #2 from all liability under the $2.1 million, F & M argues, as surety, it was also released.

The chancellor found no evidence reflecting F & M was a surety of the $2.1 million note between First Federal and Lynxx. Instead of containing language of a suretyship, the chancellor found the mortgage was an unconditional assignment to First Federal of F & M’s interests in the two leases. Further, the chancellor also held F & M was not a surety at law because F & M was the recipient of $1.7 million of the $2.1 million loan to Lynxx.

This court has defined a suretyship as a contractual relation whereby one party engages to be answerable for the debt or default of another. Fausett Builders, Inc. v. Globe Indemnity Co., 220 Ark. 301, 247 S.W.2d 469 (1952); see also James L. Elder, Stearns Law of Suretyship § 1.3, at.3 (5th ed. 1951) (real surety-ship arises where property is pledged or mortgaged as security for a debt of another). Further, a suretyship requires involvement of three parties:

(a) the one for whose account the contract is made, whose debt or default is the subject of the transaction, and who is called the principal; (b) the one to whom the debt or obligation runs, the obligee in suretyship, called the creditor; and (c) the one who agrees that the debt or obligation running from the principal to the creditor shall be performed, and who undertakes on his own part to perform it if the principal does not, called the surety.

Id. at 3. In a suretyship, the principal’s contract and the bond or undertaking of the surety are to be construed together as one instrument. Fausett Builders, Inc., 220 Ark. 301, 247 S.W.2d 469.

After a close inspection of the four documents Lynxx, F & M and First Federal used to transact the $2.1 million loan, we conclude that F & M benefited by receiving $1,705,000 of the loan proceeds and that F & M unconditionally conveyed its lease interests to First Federal to secure the entire $2.1 million note. In sum, F & M was effectively a co-principal on the $2.1 million loan along with Lynxx. Further, because it pledged nothing, Lynxx was an unsecured co-principal of the loan.

The four documents to which we refer are the following: (1) the, $2.1 million promissory note from Lynxx to First Federal, (2) the mortgage, assignment and security agreement from F & M to First Federal as security for the $2.1 million note, (3) an agreement between F & M and Lynxx wherein F & M agreed to secure the $2.1 million note with'its leases, in return for Lynxx’s agreement to borrow the $2.1 million and to “simultaneously loan” F & M $1,705,000 from proceeds of the $2.1 million loan, and (4) the unsecured $1,705,000 promissory note from F & M to Lynxx.

As pointed out above, it is clear F & M received the majority of the benefits under the $2.1 million note which in effect made F & M a co-principal with Lynxx. If we accepted F & M’s argument, F & M in actuality would be its own surety of the $2.1 million, of which it received most of the proceeds.

, It is generally stated that the relationship of principal and surety only arises when the purported surety does not have a direct personal relationship in the debt and from which he does not receive a benefit. See 72 C.J.S. Principal and Surety, § 9; 74 Am.Jur.2d Suretyship, § 3; Johnson v. Jouchert, 124 Ind. 105, 24 N.E. 580, 581 (1890), (one who has received and who retains the consideration or benefit of a contract cannot, in equity, occupy the attitude of a surety); Kennermer-Willis Grocery Co. v. Hacker, 225 Ala. 415, 143 So. 821 (1932), (the relation of surety does not exist where the consideration moves directly to or from the person claiming the privilege of a surety).

Next, F & M argues that, by operation of law, bankruptcy settlement #2 released its mortgage and assignment obligations to First Federal (Peoples) because that settlement agreement led to Lynxx’s discharge in bankruptcy. Of course, F & M’s argument is premised on its argument above that it served as surety for Lynxx on the $2.1 million. Because we hold F & M was not a surety for Lynxx, F & M’s argument here fails as well.

Additionally, F & M argues that it was party only to bankruptcy agreement #1, not to settlement agreement #2. Therefore, F & M argues it should not be held accountable for the modification of the mortgage and release of Lynxx agreed to in settlement #2.

Bankruptcy agreement #1 was signed by Charlotte Lloyd personally and as trustee for her children and as general partner of F & M, and the bankruptcy trustee, and in pertinent part, that agreement provides as follows:

(8) Lynxx hereby specifically agrees to release [F & M], Charlotte [Lloyd], Kevin and Clay [children] of personal liability to Lynxx on the $1,705,000.00 note dated April 15, 1986 (the “$1.7 Million Note”). In return, [F & M] agrees to continue to make timely installment payments directly to First Federal Savings and Loan Association of Paragould, Arkansas under the terms of the $1.7 Million Note until the remaining amount owed to Lynxx by [F & M] is satisfied. ... In the event that [First Federal] should attempt to accelerate its Note from Lynxx in the principal amount of $2,100,000.00 secured by certain assets of [F & M], notwithstanding the making of continual and timely installment payments by [F & M] to [First Federal], the Trustee agrees to defend any such actions on behalf of Lynxx and [F & M].

Paragraph (2)(d) of that same agreement states:

Lynxx shall give [F & M] a $399,900.00 credit on the remaining balance of the $1,705,000.00 Note dated April 15, 1986 . . . made payable by [F & M] to Lynxx.

Nine days after settlement agreement #1 was executed, bankruptcy agreement #2 was signed by the bankruptcy trustee, by the bankruptcy trustee as CEO of Lynxx, and by the president of First Federal. The second agreement specifically referred to agreement #1 and its parties. In addition, the parties to agreement #2 provided that, if the bankruptcy court did not approve agreement #1, agreement #2 would be null and void.

When a written contract refers to another instrument and makes the terms of that instrument a part of the contract, the two are construed together as the agreement of the parties. Isbell v. Ed Ball Construction Co., Inc., 310 Ark. 81, 833 S.W.2d 370 (1992). Here, bankruptcy agreement #2 modified the original $2.1 million note and loan as follows:

(5) Upon the execution and delivery of the $40,000.00 Note and the mortgage securing same [Little Rock property], Lynxx, the Trustee and [First Federal] shall execute and deliver Mutual Releases of All Claims in the forms attached hereto as Exhibit “A”. It is specifically agreed and understood that the $2.1 million Lynxx loan shall remain in place and in full force and effect and that the purpose of the $40,000.00 Note is to release Lynxx from all future personal liability on the $2.1 Million Lynxx loan. . . . [First Federal] further acknowledges that the $2.1 million Lynxx loan is “nonrecourse” as to [F & M] and agrees that for so long as [F & M] continues to timely make its installment payments on its $1,705,000.00 note to Lynxx direct to [First Federal] that [First Federal] will not seek to accelerate the $2.1 million Lynxx loan provided that [F & M] is not otherwise in default of its obligations set forth in [F & M] collateral documents held by [First Federal], Lynxx hereby consents to [F & M] making the aforesaid installment payments direct to [First Federal] for the life of the $1,705,000.00 note.

Peoples, as First Federal’s successor in interest, suggests the foregoing modification discharged Lynxx from liability, but reaffirmed F & M’s obligation under the $2.1 million note and mortgage. We agree.

Peoples’ position is supported by the testimony of Clayton Blackstock, F & M’s attorney at the time of the bankruptcy proceedings. Blackstock testified that he was involved in the formation of bankruptcy agreement #2, and he said that the attorney for the trustee, Stuart Hankins, wanted two separate agreements in order to use agreement #1 in negotiations with First Federal. Blackstock testified as follows:

I don’t recall any conversation with respect to the release of the $2.1 million note. The conversations with Mr. Hankins both before and after this settlement agreement number one was entered into, but before settlement agreement number two was entered into. Stuart Hankins had negotiated with First Federal, had called us about the mortgage and collateral, this pledge from F & M Building. Partnership to First Federal of Paragould. And it was by communication to him that it was my client’s desire not to hurt, in any way, Dan Kell and First Federal Savings and Loan of Paragould. And then, in essence, if it meant that the building would be foreclosed on to satisfy, whatever the indebtedness might be, that building was available and the collateral was there to satisfy that, and he wanted to know that before going into settlement negotiation with First Federal Savings and Loan of Paragould. I recall that if the $2.1 million debt remained in effect, the building was there and available as collateral for the debt. And then he had that to work with in any negotiating with First Federal of Paragould.

From this testimony, it is clear F & M had full knowledge that the $2.1 million note (with the building and ground lease as collateral) remained in full effect and we cannot say the chancellor was clearly erroneous in relying upon it. Further, F & M’s obligation under the mortgage was not increased by the modification since its property had been pledged in the event of default under the $2.1 million note. In other words, the fact that the party responsible for payment under the note changed from Lynxx to F & M, did not increase F & M’s liability under the mortgage.

We acknowledge F & M’s argument that Blackstock’s testimony concerning the bankruptcy agreements was inadmissible parol evidence. We must disagree. Normally, parol evidence is inadmissible when there is a written agreement; however, the test for its admissibility is whether the evidence offered tends to alter, vary, or contradict the written agreement, or whether it

tends to prove a part of the agreement about which the writing is silent. In the former instance, the testimony is inadmissible; in the latter, it is allowed. Rainey v. Travis, 312 Ark. 460, 850 S.W.2d 839 (1993); Loe v. McHargue, 239 Ark. 793, 394 S.W.2d 475 (1965); Gallion v. Toombs, 268 Ark. 955, 597 S.W.2d 842 (Ark. App. 1980). When ambiguity exists and the meaning of a contract becomes a question of fact, parol evidence is admissible. Isbell v. Ed Ball Construction Co., Inc., 310 Ark. 81, 833 S.W.2d 370 (1992).

Here, the chancellor was correct in finding the two agreements were silent on a number of points which were necessary to understanding the complete agreement of the parties. Specifically, the chancellor found both agreements #1 and #2 were ambiguous and silent as to what was to occur after F & M paid the $1,705,000 note in full. Thus, the chancellor here admitted the parol evidence to ascertain and give effect to the true intent of the parties. Because none of the parol evidence that was admitted actually varied, altered, or contradicted the written terms of the agreements, it was properly admitted.

We hold the chancellor’s findings as discussed above are not clearly erroneous, and affirm.

      At some time after the divorce, Mr. Lloyd then transferred back to his two sons, individually, interests in F & M with Lloyd retaining 95% ownership in F & M.

      No sale of the property has occurred. Previous to entry of the final order, Peoples’ third-party complaint against Lynxx was dismissed without prejudice.


source: Caselaw Access Project

author: Tom Glaze, Justice.* Robert L. Brown, Justice, Steele Hays, Justice,

license: Public Domain

text:
    LAWHON FARM SUPPLY, INC. v. Jerry HAYES
    93-840
    870 S.W.2d 729
    Supreme Court of Arkansas
    Opinion delivered February 21, 1994

      Dover & Dixon, P.A., by: David A. Couch and William Dean Overstreet, for appellant.

      H. David Blair, for appellee.
   Tom Glaze, Justice.*

In an attempt to bring a tort action against appellee Jerry Hayes, the appellant, Lawhon Farm Supply, Inc., asks this court to find a duty of care between a purchaser of farm products, and the holder of an unattached security interest. See Ark. Code Ann. § 4-9-203 (Repl. 1991) of the Uniform Commercial Code. We decline to do so.

On July 20, 1988, Lawhon advanced farm items such as seed, chemicals and fertilizer to Carlyle Good, a farmer. In return, Good executed a promissory note payable to Lawhon in the amount of $135,000, along with a purported enforceable security interest in crops to be grown on his farm in Woodruff County — specifically 1600 acres of milo and 200 acres of soybeans. In its attempt to perfect its interest in Good’s crops, Lawhon filed a financing statement and security agreement with the circuit clerk in Woodruff County and a central farm filing with the Secretary of State. While Good was a resident of St. Francis County, the milo was grown and stored on Good’s farm in Woodruff County.

In January, 1989, Good sold the milo to Hayes, but prior to the sale, Lawhon notified Hayes orally that the milo was subject to Lawhon’s lien. Lawhon requested Hayes to include Lawhon’s name as co-payee, if Hayes decided to purchase Good’s milo. Hayes does not dispute the fact that he had notice of Lawhon’s interest in the milo. Nonetheless, Hayes purchased Good’s milo and paid Good by check without including Lawhon as co-payee. Good later cashed the check without paying Lawhon, thus defeating Lawhon’s interest in the milo.

On September 25, 1992, Lawhon filed suit against Hayes alleging Hayes negligently destroyed its security interest in the milo crop by failing to name Lawhon as a co-payee on Hayes’ check to Good. Lawhon alleged Hayes’ failure to include Lawhon on the check even though Hayes knew of Lawhon’s interest both from its registration and from Hayes’ conversation with Lawhon. Hayes filed a motion to dismiss for failure to state facts upon which relief could be granted. From the pleadings and supporting briefs, the trial court granted Hayes’ motion to dismiss without prejudice because the complaint failed to allege facts sufficient to constitute a breach of any legal duty owed by Hayes to Lawhon. Lawhon appeals from the order of dismissal.

While the subject matter of this case is governed by the UCC, Lawhon has elected to pursue his claim against Hayes in tort. The question of what duty, if any, is owed a plaintiff alleging negligence is always a question of law and never one for the jury. Keck v. American Employment Agency, Inc., 279 Ark. 294, 652 S.W.2d 2 (1983). A complaint is subject to dismissal pursuant to Ark. R. Civ. P. 12(b)(6) where it fails to state sufficient facts to support a cause of action, and the appellate court will sustain the trial court if the result is correct. Carter v. F.W. Woolworth Co., 287 Ark. 39, 696 S.W.2d 318 (1985).

On appeal, Lawhon argues Hayes owed it a duty of ordinary care due to Hayes’ status as a purchaser of farm products. In pertinent part, Ark. Code Ann. § 4-9-301(l)(c) (Repl. 1991) provides as follows:

(l)[A]n unperfected security interest is subordinate to the rights of:
(c) . . . a person who is not a secured party and . . . is a buyer of farm products in ordinary course of business, to the extent that he gives value and receives delivery of the collateral without knowledge of the security interest and before it is perfected!.] (Emphasis added.)

See also § 4-9-307(l)(Repl. 1991) (code does not protect a buyer in the ordinary course of business who buys farm products from a person engaged in farming operations).

Here, Lawhon’s attempt to perfect its interest in the milo was ineffective because it failed to file a financing statement in St. Francis County where the debtor, Good, resided. See § 4-9-401(l)(a) (Repl. 1991) Lawhon argues that, even if his interest in the milo was not properly perfected, Hayes had actual knowledge that Lawhon was claiming a security interest in the milo. As a consequence, Lawhon claims Hayes purchased the milo subject to Lawhon’s security interest and had a statutory duty to preserve Lawhon’s interest under § § 4-9-301(l)(c) and 4-9-306 and 307. However, because Lawhon has no enforceable security interest, its arguments and citation of authority are of no avail.

Under § 4-9-201 (Repl. 1991), a security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors. Section 4-9-203(1) (Repl. 1991) provides that as to the collateral, a security interest is not enforceable against a third party unless the formal requisites for attachment are satisfied. Those requisites for attachment of a security interest in the milo are as follows: (1) the collateral is in the possession of the secured party pursuant to agreement or the debtor has signed a security agreement which contains a description of the collateral and, in addition, when the security interest covers crops growing or to be growing, a description of the land concerned; (2) value has been given, and (3) the debtor has rights in the collateral.

In this case, the security agreement between Good and Lawhon is a printed form that indicates it has been approved by the Secretary of State and the Arkansas Commission on Uniform State Laws. While the form identifies Good as the debtor, it is signed only by Noel Lawhon, and contains the following description of the collateral and the land:

(i) All crops of every kind grown or to be planted heretofore or hereafter, within one year from date of the execution hereof, on lands commonly known and referred to as the K-180 & K-13 Farm in Woodruff Countv. Arkansas, or at any other place in Woodruff County (ies), Arkansas.
(v) Other:
Approx. 1600 Acres Milo
Approx. 200 Acres Soybeans

At another area of the form, the following is found:

3. That DEBTOR’S residence in the State where the Collateral is located is
Rt. 2. Box 126 Wheatley. Ar. St. Francis County

Section 4-9-110 provides that any description of personal property or real estate is sufficient whether or not it is specific if it reasonably identifies what is described. In Piggott State Bank v. Pollard Gin Co., 243 Ark. 159, 419 S.W.2d 120 (1967), this court identified the test of sufficiency of a description of land on which crops are grown is to make possible the identification of the thing described. In Piggott, the description was “7 acres of cotton and 53 acres of soybeans ... on the lands of S.E. Karnes ... in Clay County, Arkansas.” Finding this description insufficient, this court opined it could not determine whether exactly seven acres of cotton were grown and whether anyone else was also growing cotton upon this same land. In citing preUCC cases, the Piggott court reaffirmed the rule that the “mortgage of a specified number of articles out of a larger number will not be allowed to prevail, unless it furnishes the data for separating the property intended to be mortgaged from the mass.” Id. at 161 (cites omitted).

In People’s Bank v. Pioneer Food Industries, Inc., 253 Ark. 277, 486 S.W.2d 24 (1972), the bank brought a third party action in conversion against a purchaser of crops in which the bank claimed a perfected security interest. This court found a description similar to that in Piggott (all crops on number of acres and whose land) was not sufficient, but did uphold the award of damages for those crops grown on land with “an accurate legal description.” Id. at 280.

Here, Lawhon argues that its security agreement described Good’s crops and real property by using A.S.C.S. K-180 and K-13 numbers from which a specific metes and bounds description of real estate could be determined. However, nothing in the abstract reflects the numbers appearing in the agreement were A.S.C.S. numbers, much less that the numbers sufficiently describe the lands so as to put a third person on notice under the UCC. To confuse matters, the financing statement not only reflects unidentified farm numbers but also refers to all crops on land commonly known as the K-180 and K-13 Farm in Woodruff County or at any place in Woodruff County(ies), Arkansas. And to confuse matters further, a reference is made that the collateral involved is located in St. Francis County. Furthermore, it cannot be determined whether the “approx. 1600 acres of milo” represents the entire acreage or is only part of a larger amount of acreage.

In conclusion, Lawhon has failed to satisfy the requirements of 4-9-203(1) by omitting the signature of the debtor and by not providing a sufficient description of the land on which the milo was to be grown. As a result, Lawhon’s security interest in Good’s milo did not attach, and, as the holder of an unattached security interest, Lawhon cannot claim or enforce any duty of care that Article 9 of the UCC may place on a purchaser of farm products in the ordinary course of business. Therefore, we affirm the trial court’s order dismissing Lawhon’s action under Ark. R. Civ. P. 12(b)(6).

Hays, L, dissents; Brown, L, concurs.

Robert L. Brown, Justice,

concurring. I certainly agree that no duty of care that could lead to a negligence action was established by Lawhon Farms. My sole reason for concurring is that the opinion could be read to intimate that the Uniform Commercial Code establishes a statutory duty of care which failed in this case because no security interest in the milo was created.

I disagree with that suggestion. Even had a security interest attached in the milo, I am not convinced that this could give rise to a tort remedy in negligence in Lawhon Farms.

Steele Hays, Justice,

dissenting. The majority declines to address the question of whether appellant Lawhon has stated a cause of action because it finds Lawhon had no enforceable security interest in the crops of Mr. Good. I disagree.

Before addressing the validity of the security agreement I would point out that on a 12(b)(6) motion, only the pleadings are to be looked at. If matters outside the complaint are presented on the motion it is treated as a motion for summary judgment. D. Newbern, Arkansas Civil Procedure § 11-7 (Sec. Ed. 1993). Further, for purpose of deciding the motion, the factual allegations in the complaint are accepted as true. Id. This complaint alleges that the plaintiff held a properly filed security interest. That should be the end of the inquiry. Lawhon is not required to prove in a complaint that all the prerequisites for the security agreement have been met. That is a matter of proof, for trial. Even so, if the majority insists on going beyond the complaint to decide the 12(b)(6) motion, Lawhon has still met the requirements of pleading a valid security interest.

First the majority finds there is not a sufficient description, relying on Piggott State Bank v. Pollard Gin Co., 243 Ark. 159, 419 S.W.2d 120 (1967) and People’s Bank v. Pioneer Food Industries, Inc., 253 Ark. 277, 486 S.W.2d 24 (1972). Those cases are distinguishable from this one, as they also were from United States v. Oakley, 483 F. Supp. 762 (E.D. Ark. 1980). Oakley pointed out that in Piggott, there was a segregation of acreage involved that was not otherwise identified in the description of the land where the crops were located. In contrast, the description in Oakley read “all crops to be grown on the land in question.” The description in this case is like the one in Oakley, not in Piggott.

As to Pioneer, the Oakley court said:

In Pioneer Food, the description in question contained a general description of crops and a specific legal description as to three tracts. The legal description was erroneous in that three additional tracts were omitted. In holding that the description was inadequate as to the crops grown on the omitted tracts, the Arkansas Supreme court expressly stated that the question as to the sufficiency of the general description standing alone would remain unanswered.

In Oakley, the description stated that the collateral consisted of “all the crops” on the “farm of Alois Ledwig,” consisting of “260 acres,” “located in White County, Arkansas” and “approximately 3 1/2 miles southeast of McRae.” The court, after examining all the relevant Arkansas law, concluded:

Nothing in the Arkansas statutes or case law indicates that a full legal description of real estate is required in a financing statement covering crops. The information in the financing statement, together with inquiry suggested therein, would enable a stranger to the transaction...to identify the crops.

The court found that the description was sufficient. Other jurisdictions have adopted the test laid down in Oakley. See In the Matter of Robert Younce, 56 BR 232 (E.D. Wisc. 1985), where the court stated the Oakley test required four things: 1) name of the record owner, 2) approximate number of acres on which the crops are grown; 3) the county in which the land is located and 4) the distance of the real estate from the nearest city or town. However, the courts have taken a liberal approach and interpretation of that test and found the description sufficient if it puts a third party on notice and gives enough information from which the third party can, upon inquiry, determine the precise location.

The court in Younce, for example, found the first and fourth factors missing in the description, but that the description was nevertheless sufficient. There was some reference to townships and sections, and even though it was not a legal description the court found it was sufficient to locate and identify the collateral.

A real estate description is not intended to serve as the sole means by which a third party could locate and identify the collateral. Its purpose is to put an interested third party on notice of the existence of a claim. The obligation then runs to the third party to conduct further inquiries suggested by the description of the collateral and real estate upon which it governs to determine the precise location.

Id. at 235.

In this case we have the number of acres involved and the county and state where they are located. The description also lists (K180 and K13) numbers which Lawhon contends are identifying numbers with the A.S.C.S. office and that by reference to these A.S.C.S. farm numbers, a specific metes and bounds description of the land is obtainable.

As in Oakley and Younce, this description would be sufficient because it would “enable third persons, aided by inquiries which the instrument itself suggests, to identify the property.” Oakley, supra, quoting from Security Tire & Rubber Co. v. Hlass 246 Ark. 1113, 441 S.W.2d 91 (1969). Under our case law, like that of other jurisdictions, the description in this case is sufficient. See 2 White, Summers, Uniform Commercial Code, § 24-4 (3rd ed. 1988).

The majority also finds the security agreement deficient because it is not signed by the debtor as required by Ark. Code Ann. § 4-9-203(1) (1987). The question of the debtor’s signature is not raised by either party, below or on appeal, nor is it noted by the trial court in its order of dismissal. In a civil proceeding the allegations in a complaint are presumed to be true. Carter v. F.W. Woolworth Co., 287 Ark. 39, 696 S.W.2d 318 (1985). Carter also states that a presumption that the allegations are true does not mean that a bare allegation can overcome an accompanying exhibit which plainly refutes the allegation.

In this case Lawhon alleged it had a security agreement that was properly filed. The record on appeal contains a copy of that agreement which bears no signature of the debtor. However, the copy clearly reflects that it is the “Debtor Copy,” and there is no reason the debtor would sign his own copy. This exhibit, unlike the exhibit in Carter, does not “plainly refute the allegation.” Lawhon’s allegation of a valid security agreement remains unchallenged for purposes of gauging the sufficiency of the pleading.

The only remaining problem is Lawhon’s theory for its cause of action based on negligence. I find no direct authority supporting a cause of action for negligence in the context of this case, but the allegations otherwise clearly assert a cause of action for conversion. Under Ark. Code Ann. § 4-9-201 (1987) it is stated in part:

Except as otherwise provided by this act a security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors. [My emphasis.]

The rights of a secured party against a purchaser of the collateral are stated in 2. White, Summers, Uniform Commercial Code, § 27-7 (3rd ed. 1988).

When a debtor sells collateral to subject to a perfected security interest, the secured party may proceed (1) against the debtor. ... or (2) against the purchaser (a) by replevin or (b) by an action in trespass for conversion of the collateral. [My emphasis.]

Here, as clearly alleged in the complaint, Hayes, with knowledge of Lawhon’s security interest, purchased the collateral in violation of that security interest. While this may not be an action for negligence, that does not mean the pleading is fatally deficient. ARCP 12(b)(6) only requires that sufficient facts to state a claim be pled, and not a correct theory of action. We have stated:

The statement of facts constitutes the cause of action .... All that is necessary is that the complaint state a cause of action within the jurisdiction of the court.

C.R.I.&P. v. Lockwood, 244 Ark. 122, 424 S.W.2d 158 (1968). To the same effect see 61A Am. Jur. 2d, Pleadings §§ 75, 77 (1981).

One question remains: What is the result if Lawhon failed to properly file the financing statement but the purchaser had knowledge of its interest? While we did not reach this question in Affiliated Food Stores, Inc. v. Farmers & Merchants Bank, 300 Ark. 450, 780 S.W.2d 20 (1989), we nevertheless acknowledged it in theory:

The bank argues that, due to its first filing with the circuit clerk, Affiliated had knowledge of its security interest in the inventory and thus the filing with the circuit clerk was sufficient, citing In re Davidoff, 351 F. Supp. 440 (S.D.N.Y. 1972). In that case, in which New York law was applied, it was held that a creditor who had actual knowledge of a prior security interest could not defeat the prior interest on the basis that the prior interest was filed improperly. In the case now before us there is no evidence that Affiliated had actual knowledge of the bank’s interest.

There is sound authority for the view that knowledge of a security interest will overcome a misfiling of the financing statement. See Hillman, McDonnel, Nicies, Common law and Equity Under the Uniform Commercial Code (1985), § 24.05 [1]; 2 G. Gilmore, Security Interests in Personal Property § 34.2 (1965).

I think the approach is persuasive and in this case there is no dispute that Hayes had knowledge of Lawhon’s security interest. Therefore, under the aforementioned authorities, any misfiling of the financing statement is irrelevant and it will be deemed to have been properly filed with regard to a third party with actual knowledge. In that case Lawhon has pled a properly perfected security interest and stated a cause of action, and may proceed against the buyer. Ark. Code Ann. § 49-9-201 (1987); Ark. Code Ann. § 4-9-306(2) (1987).

      Only the security interest in the milo is at issue.

      Lawhon’s interest in the milo was inferior to a mortgage held by Farmers’ Home Administration. However, Lawhon indicates there were funds remaining after the sale of Good’s milo in excess of Farmers’ lien (hat should have been paid to him.

      Under § 4-9-401(l)(a), perfecting a security interest in farm products requires filing in the county of the debtor’s residence and, if crops growing or to be grown, in the county where the land is located. Crops are farm products under § 4-9-109(3) (Repl. 1991).

      The underlined portion represents the information filled in; the unlined portion represents the printed matter.


author: Donald L. Corbin, Justice.

text:
    Donald BELLANCA v. ARKANSAS POWER & LIGHT COMPANY
    93-711
    870 S.W.2d 735
    Supreme Court of Arkansas
    Opinion delivered February 21, 1994

      Swindoll Law Firm, by: James F. Swindoll and Paul Byrd, for appellant.

      Chisenhall, Nestrud & Julian P.A., by: Jim L. Julian and Janie W. McFarlin, for appellee.
   Donald L. Corbin, Justice.

Appellant, Donald Bellanca, appeals a Pulaski Circuit Court summary judgment entered on behalf of appellee, Arkansas Power and Light Company (AP&L). An employee of appellee activated the electrical power at appellant’s mobile home on September 10, 1991, at appellant’s request, and also turned the switches on in the breaker box. At the time, appellant was making electrical repairs and did not want the breaker switches turned on. A box sitting on an electric stove inside the mobile home ignited when the breaker switch was turned on; this, in turn, damaged the residence and its contents. Appellant filed suit, and appellee filed a motion for summary judgment. After a hearing on the motion for summary judgment, the court held that there were no genuine issues of material fact remaining and that appellee was entitled to judgment as a matter of law. Appellant appeals the summary judgment, and we reverse in that the trial court erred as a matter of law.

Summary judgment is proper when there exists no issue of material fact, and the movant is entitled to judgment as a matter of law. ARCP Rule 56. On appeal, this court determines if summary judgment was proper based on whether the evidence presented by the movant leaves a material question of fact unanswered. Barraclough v. Arkansas Power & Light Co., 268 Ark. 1026, 597 S.W.2d 861 (1980). All proof submitted must be viewed in a light most favorable to the party resisting the motion, and any doubts and inferences must be resolved against the moving party. Harvison v. Charles E. Davis & Assoc., Inc., 310 Ark. 104, 835 S.W.2d 284 (1992). We acknowledge whether a duty is owed between parties is a question of law. Stacks v. Arkansas Power & Light Co., 299 Ark. 136, 771 S.W.2d 754 (1989); Keck v. American Employment Agency, Inc., 279 Ark. 294, 652 S.W.2d 2 (1983).

Appellant correctly points out that this court has spoken on the topic of utility companies and their duties to inspect and maintain its own equipment and has consistently held that those companies are not held liable for injuries that cannot be reasonably foreseen. See e.g. Stacks, 299 Ark. 136, 771 S.W.2d 754; Arkansas Power & Light Co. v. Lum, 222 Ark. 678, 262 S.W.2d 920 (1953). There is, then, without question a duty to act reasonably when supplying power. A duty of reasonable care is also made clear in our statutes, as argued by appellant. Ark. Code Ann. § 23-3-113 (1987) sets forth a duty of reasonable care and reads:

(a) Every public utility shall furnish, provide, and maintain such adequate and efficient service, instrumentalities, equipment, and facilities as shall promote the safety, health, comfort, requirements, and convenience of its patrons, employees, and the public.
(b) Every person, firm, or corporation engaged in a public service business in this state shall establish and maintain adequate and suitable facilities, safety appliances, or other suitable devices and shall perform such service in respect thereto as shall be reasonable, safe, and sufficient for the security and convenience of the public and the safety and comfort of its employees, and, in all respects, just and fair, and without any unjust discrimination or preference.

This codifies a duty to act with reasonable care in the delivery of service. We reverse with regard to the existence of a duty, that duty being to act reasonably under the circumstances not to harm.

Appellant argued to the court at the hearing that AP&L assumed a duty when it went onto appellant’s property and turned the breakers on. Had the AP&L serviceman only activated the power at the power pole, we could affirm the trial court’s summary judgment. However, whether activation of the breaker switches owned by appellant constituted a breach of the duty of reasonable care is a question of fact to be left to the finder of fact. The trial court erred in that it apparently limited its holding to deciding as a matter of law that there was no duty to inspect the customer’s premises prior to activating service, ignoring that there is a broader duty of reasonable care in supplying power. Since we reverse the initial determination that there existed no duty as a matter of law, we need not address the question of whether there were factual issues unanswered.

Reversed and remanded.

Holt, C.J., not participating.


text:
    George E. MARTIN v. NATIONAL BANK OF COMMERCE of El Dorado, Administrator of the Estate of Cynthia Martin, Deceased
    93-850
    870 S.W.2d 738
    Supreme Court of Arkansas
    Opinion delivered February 21, 1994

      Shackleford, Shackleford & Phillips, P.A., by: Norwood Phillips, for appellant.

      Compton, Prewett, Thomas & Hickey, P.A., by: William I. Prewett, for appellee.
   Donald L. Corbin, Justice.

Appellant, George E. Martin, appeals an order of the Calhoun Chancery Court refusing to set aside a decree granting a divorce to appellant’s wife, Cynthia Martin, dividing the marital property, and awarding her custody of the two children. We have jurisdiction of the appeal as it requires our interpretation of ARCP Rule 60(c) as to whether a trial court is required to receive evidence or conduct a hearing. However, we do not reach the merits of this appeal because there is not an appealable order consistent with ARCP Rule 54(b). Therefore, we must dismiss the appeal.

The procedural history of this case is as follows. Appellant and Cynthia Martin married on February 7, 1980. Cynthia Martin filed for divorce in Calhoun County on September 25, 1992. Appellant was served with the summons on October 2, 1992. Appellant did not answer the complaint for divorce. Cynthia Martin. appeared in the Calhoun Chancery Court and gave testimony relating to the divorce, custody of the couple’s two children, and property settlement on January 11, 1993; appellant did not appear, by counsel or otherwise, at the divorce hearing. On that same day, the chancellor granted Cynthia a divorce from appellant; the decree also awarded her custody of the two children, directed appellant to pay child support, and divided the couple’s marital property.

Appellant acknowledged receiving a copy of the divorce decree from Cynthia’s attorney a few days after January 11, 1992, from which he did not appeal. On March 9, 1993, appellant filed a motion to set aside the divorce decree pursuant to ARCP Rule 60(b). Cynthia Martin died intestate on or about March 13, 1993, as a result of gunshot wounds she received on or about March 1, 1993. Appellee, National Bank of Commerce of El Dorado, was appointed as administrator of her estate and substituted as a party in the proceedings.

Realizing that the court would not act on his motion within the ninety-day limitation period of Rule 60(b), appellant amended his motion to set aside the divorce decree to include a request for relief under ARCP Rules 55 and 60. Specifically, appellant argued that the divorce and property distribution were obtained through Cynthia Martin’s perjured testimony and that she fraudulently represented to appellant that she no longer intended to pursue the divorce. Appellant also asserted the defense of condonation. Appellee responded to appellant’s motions arguing that appellant was barred from having the divorce set aside by the doctrines of estoppel and unclean hands in that he shot and killed Cynthia Martin under circumstances constituting murder.

Alpha Brown, appellant’s aunt by marriage, filed a motion to intervene and complaint for intervention on or about May 6, 1993. In her motion, Ms. Brown, an elderly widow, claimed ownership of certain property that was distributed as marital property in the divorce decree. Specifically, she claimed ownership of $100,000 which she gave to the couple along with a power of attorney to invest in her name at a higher interest rate than she was receiving at the Calhoun County Bank. Ms. Brown also claimed ownership of a 1992 Lincoln Town Car which was purchased using her 1987 Buick LeSabre as a trade and part of the $100,000. The chancellor granted Ms. Brown’s motion to intervene on May 10, 1993. Ms. Brown’s counsel twice requested a continuance of the proceedings. The first request was granted. The second request was based on the grounds that counsel could not be present on the scheduled hearing date. The second request went unanswered by the trial court, and counsel for appellant and appellee appeared in court on the scheduled date. The record does not indicate that the intervenor was present nor that she was represented by counsel.

The chancellor considered the pleadings and arguments of counsel made in open court on June 21, 1993, and entered an order refusing to set aside the divorce decree for lack of jurisdiction pursuant to Rule 60(b) in that more than ninety days had passed since the entry of the divorce decree on January 11, 1993. The order also stated that due to appellant’s delay in responding to the divorce action, and due to Cynthia Martin’s death, substantial prejudice would result to her estate if the chancellor were to reopen any part of the divorce proceeding. The order did not dispose of or even consider the intervenor’s claims. The order was entered of record on June 24, 1993. This appeal followed.

On appeal, appellant does not contest that part of the chancellor’s ruling asserting a lack of jurisdiction under Rule 60(b). Appellant does contest the court’s dismissal of his claim that the decree was obtained through Cynthia Martin’s fraudulent conduct. He argues the trial court erred in allegedly summarily dismissing his fraud claim without giving him an opportunity to present evidence of the fraud.

We do not reach the merits of appellant’s claim because the trial court did not dispose of the intervenor’s claim as is necessary pursuant to ARCP Rule 54(b). The order appealed from does not mention the intervenor’s claim nor does it mention any facts that would allow a piecemeal appeal under Rule 54(b). As was the situation in South County, Inc. v. First Western Loan Co., 311 Ark. 501, 845 S.W.2d 3 (1993), the record does not reflect what happened to the intervenor’s claim. Therefore, the order appealed from disposes of less than all the claims in this suit and is not a final, appealable order. Id. The finality of an order is a jurisdictional requirement this court is obliged to raise even when the parties do not. Alberty v. Wideman, 312 Ark. 434, 850 S.W.2d 314 (1993).

The appeal is dismissed.


author: Donald L. Corbin, Justice. Robert L. Brown, Justice,

text:
    Calvin MULDROW d/b/a Muldrow Bonding Co. v. Lee DOUGLASS, Insurance Commissioner, Arkansas Insurance Department
    93-719
    870 S.W.2d 736
    Supreme Court of Arkansas .
    Opinion delivered February 21, 1994
    [Rehearing denied March 28, 1994.]

      Walker, Roaf, Campbell, Ivory & Dunklin, by: Sheila F. Campbell, for appellant.

      Jeannette Denham, for appellee.

      Hays and Brown, JJ., would grant rehearing.

   Donald L. Corbin, Justice.

Appellant, Calvin Muldrow, appeals a Pulaski Circuit Court decision upholding the Arkansas Insurance Commissioner’s finding that appellant had lost his status regarding the security deposit for bail bondsmen. Since appellant was no longer qualified for the lesser statutory minimum deposit, the required security deposit increased from $25,000 to $100,000. We have jurisdiction to hear this case since it necessitates our interpretation of a statute, Ark. Code Ann. § 17-17-205 (1987). However, we do not reach the merits of this case because appellant’s abstract is flagrantly deficient.

The abstract presented is virtually a verbatim copy of the transcript. In it is almost every typewritten word of the transcript, including certificates of service on pleadings. In fact, there are more pages in the abstract submitted (85) than are in the actual transcript (79). The cover page and index to the transcript are included verbatim in the abstract.

The abstract should contain an impartial condensation of only the material parts of the pleadings, proceedings, facts, documents, and other materials in the transcript as are necessary to an understanding of all questions presented to the court for decision. Ark. Sup. Ct. R. 4-2(a)(6). This court has stated that an abstract that is a mere reprint of the transcript, or substantial parts of it, may preclude this court from reaching the merits of an appeal. Board of Educ. of Franklin Co. v. Ozark School Dist. No. 14, 280 Ark. 15, 655 S.W.2d 368 (1983). This case falls into that category, and we therefore affirm.

Hays and Brown, JJ., dissent.

Robert L. Brown, Justice,

dissenting. I respectfully dissent.

In my three years on the court, we have not affirmed á case for failure to condense under Ark. Sup. Ct. R. 4-2(a)(6), formerly Rule 9, until today. The reason is obvious. We look at abstracts of the record that provide too much differently from those that provide too little. In other words, to warrant the harsh result of an affirmance under Rule 4-2(a)(6) for providing excessive material in the abstract, the violation must be of the most serious order. One factor that we consider in assessing whether to affirm because an abstract is not sufficiently condensed is whether this lapse has caused the court a prodigious waste of time. See Forrest City Mach. Works v. Mosbacher, 312 Ark. 578, 851 S.W.2d 443 (1993); Oaklawn Jockey Club v. Jameson, 280 Ark. 150, 655 S.W.2d 417 (1983) (J. Smith, concurring opinion).

Enforcing Rule 4-2(a)(6) is a relatively simple matter when a material part of the record is not abstracted such as the judgment, the will at issue, a pertinent jury instruction, or testimony. See Dixon v. State, 314 Ark. 378, 863 S.W.2d 282 (1993) (hearing, findings of fact, and orders not abstracted); Davis v. Peebles, 313 Ark. 654, 857 S.W.2d 825 (1993) (pleadings, motion for summary judgment, affidavits, and order not abstracted); Haynes v. State, 313 Ark. 407, 855 S.W.2d 313 (1993) (hearing on issue raised on appeal not abstracted); Watson v. State, 313 Ark. 304, 854 S.W.2d 332 (1993) (abstract was a scattering of transcript references in the argument); Edwards v. Neuse, 312 Ark. 302, 849 S.W.2d 479 (1993) (abstract did not include pleadings, documents, or orders); Stephens Prod. Co. v. Johnson, 311 Ark. 206, 842 S.W.2d 851 (1993) (abstract did not contain the pleadings); Gilmer v. State, 308 Ark. 506, 824 S.W.2d 343 (1992) (complete failure to abstract the record); Hunter v. Williams, 308 Ark. 276, 823 S.W.2d 894 (1992) (abstract failed to include order); D.J., A Juvenile v. State, 308 Ark. 37, 821 S.W.2d 782 (1992) (abstract was a narrative statement reciting the barest facts); Samples v. Samples, 306 Ark. 184, 810 S.W.2d 951 (1991) (abstract failed to include the answer, jury instructions, motion for directed verdict, judgment, or the notice of appeal); Fruit v. Lockhart, 304 Ark. 457, 802 S.W.2d 930 (1991) (abstract consisted only of a “statement” that had been submitted as an exhibit at the evidentiary hearing); Pennington v. City of Sherwood, 304 Ark. 362, 802 S.W.2d 456 (1991) (abstract failed to contain the legal description contained in the ordinance or a copy of the plat at issue). Under such circumstances, an objective test on the materiality of the omission can readily be applied.

With regard to abstracts where we are given too much and there has been a failure to condense the material adequately, the issue becomes more subjective on the part of this court. I cannot conclude in this case that the abstract is flagrantly deficient under the Rule or that it has occasioned a prodigious waste of time for the court. True, the abstract is 85 pages, and the record is only 79 pages. But the abstract is not a mere photographic reproduction of the record as was the case in Board of Educ. of Franklin Co. v. Ozark Sch. Disk No. 14, 280 Ark. 15, 655 S.W.2d 368 (1983). In that case, we said that the appellant had done little more than reproduce photographically substantial parts of the record, and no attempt was made to condense. Here, the pleadings, exhibits, and arguments abstracted have all been retyped by Muldrow. More importantly, there has been an effort by Muldrow, albeit a minimal one, to condense the record, even though the number of pages in the abstract is longer. Portions of the pleadings, exhibits, and colloquy between counsel and the circuit court have been eliminated. And the testimony of Calvin Muldrow is abstracted correctly and put in first person narrative form in accordance with the Rule. Where there has been some effort to condense and the abstract does not cause the court an ordinate amount of time to read, affirmance is too draconian a penalty to levy.

In Forrest City Mach. Works v. Mosbacher, supra, we fired a shot across the bow and stated that we would no longer tolerate abstracts that were single-spaced, void of record references, or not adequately condensed. The clerk of this court is endowed with the authority under Ark. Sup. Ct. R. 4-1 and 4-2 not to accept briefs with abstracts that are single-spaced or without record references. But failure to condense falls to this court to assess and, again, requires a more subjective analysis.

This abstract did not cause this court a prodigious waste of time. It is not flagrantly deficient which is the ultimate test under Rule 4-2(a)(6). I would reach the merits.

Hays, J., joins.


author: Donald L. Corbin, Justice. Per Curiam.

text:
    Marie TRAPP and Jimmy Moore, Co-Administrators of the Estate of Donald Wayne Moore, Deceased v. ECONOMY ENGINEERING COMPANY; Raymond Holt, d/b/a Holt’s Equipment Rental and Sparton Corporation
    93-874
    871 S.W.2d 345
    Supreme Court of Arkansas
    Opinion delivered February 21, 1994
    [Supplemental Opinion on Denial of Rehearing April 11, 1994]

      Wilson & Associates, by; J.L.Wilson, for appellants.

      Rieves & Mayton, by: Martin W. Bowen, for appellees.
   Donald L. Corbin, Justice.

Appellant, Donald Wayne Moore, through the co-administrators of his estate, appeals the entrance of summary judgment in favor of separate appellee, Sparton Corporation (Sparton). Appellant was electrocuted on Sparton’s property while riding an electrically charged forklift and coming in contact with another metal object. After Sparton moved for summary judgment, the parties filed briefs and a hearing was conducted. The trial court determined as a matter of law that appellant’s status at the time of his death was that of a licensee and that Sparton had met the commensurate duty.

Although not raised by Sparton, we do not reach the merits of appellant’s case because appellant failed to comply with our brief and abstract requirements. See Ark. Sup. Ct. R. 4-1 and 4-•2. We may raise issues of deficiencies on our own motion. Ark. Sup. Ct. R. 4-2(b)(2). First, we note that appellant’s brief lacked a jurisdictional statement as required by Rule 4-2(a)(2). Next we note that briefs submitted must be double-spaced unless the single-spaced material is quoted information. See Ark. Sup. Ct. R. 4-1(a). The abstract portion of appellant’s brief is in large portion single-spaced in contravention of this rule. Deposition testimony appears to be quoted verbatim, but it is neither single spaced nor indented.

Moreover, the abstract contains information that is clearly unnecessary for determination of the issues presented, but is lacking information that is pertinent. Appellant also failed to abstract the notice of appeal as well as the order of the trial court. See Edwards v. Neuse, 312 Ark. 302, 849 S.W.2d 479 (1993). This appeal comes from an order disposing of less than all parties and less than all issues; not all defendants were released from this lit-

875 S.W.2d 486

Wilson & Associates, by: J.L. Wilson, for appellant.

igation in the summary judgment from which this appeal resulted. Upon appellant’s motion, the trial court entered an order granting appellant leave to appeal, and this is not made part of the abstract.

We have held that it is impractical if not impossible to pass around a single transcript when there are seven justices on this court. See e.g. Davis v. Peebles, 313 Ark. 654, 857 S.W.2d 825 (1993). In the absence of this vital information being properly abstracted, according to the rules of this court, it is impossible for this court to make an informed decision on the merits of this case. Flagrant failure to abstract in accordance with the rules will result in our refusal to reach an appellant’s arguments. Id. Because of appellant’s omission of material pleadings and the other enumerated deficiencies in the abstract, we affirm.

SUPPLEMENTAL OPINION ON DENIAL OF REHEARING APRIL 11, 1994

Rieves & Mayton, by: Elton A. Rieves IV, for appellee.

Per Curiam.

Petitioner Jimmy Wayne Moore, Co-Admin-

istrator of the Estate of Donald Wayne Moore, deceased, argues on rehearing that failure to abstract an order giving leave to appeal an interlocutory order was not a flagrant violation of S.Ct. R. 4-2(a)(6). In the alternative, petitioner requests the right to file a supplemental abstract to comply with the rule.

The petition is denied. Failure to abstract a critical order has been grounds for affirmance under Rule 4-2(a)(6) or its predecessor, Rule 9. See, e.g., Montgomery v. Butler, 309 Ark. 491, 834 S.W.2d 148 (1992) (appendix case); Stephens Production Co. v. Johnson, 311 Ark. 206, 842 S.W.2d 851 (1992); Hunter v. Williams, 308 Ark. 276, 823 S.W.2d 894 (1992); Brooks v. City of Benton, 308 Ark. 571, 826 S.W.2d 259 (1992). The missing order in this instance was significant. Not knowing the basis by which the trial court permitted an interlocutory appeal impeded this court’s ability to make an informed decision on whether a violation of Ark. R. Civ. P 54(b) had occurred.

We will allow a supplemental abstract in certain cases where the circumstances warrant it before the case is submitted for decision. See, e.g., Young v. State, 308 Ark. 372, 823 S.W.2d 911 (1992). When that occurs any expenses associated with reabstracting incurred by the non-moving party will be subject to payment by the moving party. Here, the request to reabstract comes not only after submission but after the case has been decided. It is simply too late to correct the deficiency.

Petition denied.


author: Robert L. Brown, Justice.

text:
    Wendy L. PARKS v. Tommie M. EWANS
    93-866
    871 S.W.2d 343
    Supreme Court of Arkansas
    Opinion delivered February 21, 1994

      Steven W. Elledge, for appellant.

      John D. Bridgforth, P.A., for appellee.
   Robert L. Brown, Justice.

This appeal concerns the admissibility of blood tests taken at the behest of the appellant, Wendy L. Parks, to establish the paternity of the putative father, appellee Tommie M. Ewans. The chancellor, sitting as juvenile judge, refused to admit the blood tests into evidence at the paternity trial due to the absence of a chain-of-custody affidavit as required by Ark. Code Ann. § 9-10-108 (a)(3)(B)(i) (Repl. 1993). We hold that the chancellor erred in his ruling, and we reverse his decision and remand the matter for a new trial.

On December 7, 1992, Wendy Parks, the natural mother of Tommie Ewans, Jr., filed her complaint against Tommie M. Ewans and alleged that he was the minor child’s father. She prayed for a finding of paternity, child and medical support, and health care coverage. That same date, Ewans filed an objection “to being the father” and stated his willingness “to take any procedures to be sure.” Ewans later filed a formal answer denying that he was the father.

On January 5, 1993, Ewans apparently allowed blood to be drawn, and blood was also drawn from the minor child and from Parks. Tests on the samples were performed on January 20, 1993, by Genetic Design, a paternity evaluation firm in Greensboro, North Carolina. On April 9, 1993, which was the Friday before the Monday trial, Ewans filed a motion challenging the paternity tests. In the motion, Ewans contended that he had not filed the motion 30 days before trial because he did not retain counsel until March 8, 1993.

Trial commenced on April 12, 1993, and at the trial the chancellor granted Ewans’s motion to suppress the paternity report due to the failure of Parks to provide a chain-of-custody affidavit as required by statute. Parks then moved for a continuance based on surprise which was denied. The chancellor found that Parks had not met her burden of proof to establish Ewans as the father of the minor child and, accordingly, he entered an order of dismissal.'

The primary issue raised on appeal is whether the chancellor erred in suppressing the blood test report. We conclude that he did. The relevant statute reads:

(3)(A) A written report of the test results prepared by the duly qualified expert conducting the test, or by a duly qualified expert under whose supervision or direction the test and analysis have been performed, certified by an affidavit duly subscribed and sworn to by him or her before a notary public, may be introduced in evidence in paternity actions without calling the expert as a witness unless a motion challenging the test procedures or results has been filed within thirty (30) days of the trial on the complaint and bond posted in an amount sufficient to cover the costs of the duly qualified expert to appear and testify.
(B)(i) If contested, documentation of the chain of custody of tissue and blood samples taken from test subjects in paternity testing shall be verified by affidavit of one (1) person witnessing the extraction, packaging, and mailing of said samples and by one (1) person signing for said samples at the place where same are subject to the testing procedure.

Ark. Code Ann. § 9-10-108 (a)(3)(A) & (B)(i) (Repl. 1993).

Our interpretation of § 9-10-108 (a)(3)(B)(i) turns on the meaning of “if contested” relative to the chain-of-custody affidavit. Admittedly, this subsection and § 9-10-108 (a)(3)(A) can be read to require that both a motion challenging the test results ■ and a motion contesting chain-of-custody of the samples be filed within 30 days of trial. They can also be read as limiting the 30-day motion requirement to a challenge to the test results under § 9-10-108 (a)(3)(A). It would be an anomalous situation, however, for us to conclude that a putative father could wait until the Friday before the Monday trial, which was the case here, or even until the trial itself to contest the absence of an affidavit establishing chain of custody. Under such circumstances, the natural mother would have no warning that the blood tests were contested on foundation grounds until the eleventh hour, or later. That, of course, would be patently unfair.

The policy behind § 9-10-108 (a)(3) was to ease requirements for the admissibility of blood tests. Boyles v. Clements, 302 Ark. 575, 792 S.W.2d 311 (1990); see also Ross v. Moore, 30 Ark. App. 207, 785 S.W.2d 243 (1990). Parks was entitled to reasonable notice that the test results were contested to give her the opportunity to obtain the necessary affidavit. A challenge to the blood tests filed the Friday before the Monday trial was not reasonable notice. Moreover, even that challenge could be read to relate only to the test results themselves and not to a contest on chain-of-custody grounds.

In sum, we interpret § 9-10-108 (a)(3)(B)(i) to require a contest on chain-of-custody grounds within 30 days of trial. Certainly, the overall scheme of § 9-10-108 (a)(3) supports the 30-day requirement in both subsections. The chancellor erred in suppressing the test results. The test results are admissible on the basis that Ewans failed to mount the contest to chain of custody in timely fashion.

The order of dismissal is reversed, and the matter is remanded for further proceedings.


author: Per Curiam.

text:
    CITY OF LITTLE ROCK and Arkansas Public Service Commission v. AT&T COMMUNICATIONS OF THE SOUTHWEST, INC.
    93-1251
    870 S.W.2d 217
    Supreme Court of Arkansas
    Opinion delivered February 21, 1994

      Thomas M. Carpenter, for appellant.

      Wright, Lindsey & Jennings, by: N. M. Norton, Jr., for appellee.
   Per Curiam.

The City of Fort Smith and the Arkansas Municipal League have filed motions for permission to file amicus curiae briefs supporting appellants’ side of this case. Appellee American Telephone and Telegraph Communications of the Southwest, Inc. has responded and asked for additional pages of argument to respond to the amicus curiae briefs. We grant permission to file the amicus curiae briefs and also grant appellee an additional ten pages of argument to respond.

In its motion, appellee states that it needs the extra pages to respond to new issues raised in the amicus curiae briefs. In order to prevent any possible misunderstanding, we state that we do not know if the new issues were raised by the pleadings and ruled on by the trial court, but we ordinarily address amicus curiae arguments similar to the way we address arguments by intervenors, and intervenors on appeal cannot enlarge the issues beyond those raised by the pleadings of the parties in the lower court. Weber v. Pryor, 259 Ark. 153, 531 S.W.2d 708 (1976).

Newbern, J., not participating.


text:
    Bryson JACOBS v. STATE of Arkansas
    CR 93-1137
    870 S.W.2d 740
    Supreme Court of Arkansas
    Opinion delivered February 21, 1994

      Larry W. Horton, for appellant.
    No response.
   Per Curiam.

Appellant Bryson Jacobs moves (1) for additional time to file her brief and (2) to supplement the record with enhanced tapes, or their transcription, concerning the alleged drug transaction at issue. The State Crime Laboratory was unable to enhance the tapes, and Jacobs now states that a private firm' in Little Rock may be able to accomplish this. The court reporter’s letter is attached to the motion. She states that the tapes were not transcribed by her at trial because they were for the most part unintelligible and inaudible and contained background noises.

The motions are denied, and the clerk is directed to set a briefing schedule. Enhanced tapes would present this court with evidence not heard by the jury. We are limited on appeal to a review of the record of the trial court proceedings. We will not review evidence not considered by the jury or the trial court and, thus, not contained in the record. Evans v. State, 271 Ark. 775, 610 S.W.2d 577 (1981); Weston v. State, 265 Ark. 58, 576 S.W.2d 705 (1979).


text:
    Timothy Allen OLIVER v. STATE of Arkansas
    CR 94-113
    871 S.W.2d 332
    Supreme Court of Arkansas
    Opinion delivered February 21, 1994

      Dana A. Reece, for appellant.
    No response.
   Per Curiam.

The appellant, Timothy Allen Oliver, by his attorney, has filed a motion for rule on the clerk. His attorney, Ms. Dana A. Reece, admits that the failure to file the record in time was due to a mistake on her part.

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

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


text:
    Christopher Ray STONE v. STATE of Arkansas
    CR 94-61
    871 S.W.2d 552
    Supreme Court of Arkansas
    Opinion delivered February 21, 1994

      Frank E. Shaw, for appellant.
    No response.
   Per Curiam.

Appellant, Christopher Ray Stone, asks this court to issue a writ of certiorari directing the court reporter for the Faulkner County Circuit Court, Debbie Whillock, to complete the transcript in this case. Appellant filed a partial record on January 18, 1994, and states the transcript was due in this court on that date. Appellant states that the court reporter has been unable to prepare the record because of numerous trials and appeals, and asks for an additional thirty days for the reporter to complete the transcript to be due February 20, 1994.

Appellant has twice previously been granted extensions of time to file the transcript in this appeal of a judgment of conviction for first degree murder and sentence of life imprisonment entered June 20, 1993. Originally, the transcript was due to be filed on or about October 20, 1993; that deadline was extended until December 31, 1993, and again until January 18, 1994.

Since appellant filed this request for writ of certiorari, the reporter completed the transcript, although after the January 18, 1994, deadline. Therefore, we will treat this petition for certiorari as a motion for rule on the clerk.

We grant the motion for rule on the clerk and direct the clerk to accept the transcript. The clerk is also directed to forward a copy of this per curiam to the Board of Certified Court Reporter Examiners for any action it may deem necessary under its rules.


author: Jack Holt, Jr., Chief Justice.

text:
    H.A. ADAMS and Opal Adams, and Gary Adams and Darlos Adams v. Donald OWEN and Darcy Owen
    93-917
    870 S.W.2d 741
    Supreme Court of Arkansas
    Opinion delivered February 28, 1994
    [Rehearing denied April 11, 1994.]

      Robert E. Bamburg, P.A., for appellants.

      Hale & Young, by: Milas H. Hale, III, for appellees.

        See, Trapp v. Economy Eng'g Co., 316 Ark. 89, 90-A (1994).

   Jack Holt, Jr., Chief Justice.

Appellants contend that the trial judge’s setting aside of a default judgment against JFK Laundry (JFK) and Guy Ramsey was error because the trial court abused its discretion in; (1) granting the motion to set aside the judgment; (2) misinterpreting Ark. Code Ann. § 16-110-407 and (3) finding that Mr. Ramsey had not employed the debtor, Darcy Owen, and that he did not have a financial interest in her place of employment, JFK. We do not reach the merits of appellants’ arguments and affirm the trial court because they have failed to comply with Rule 4-2(a)(6) of the Rules of the Supreme Court.

Appellants, the Adamses, obtained a default judgment against Ms. Darcy Owen and served JFK Laundry with “Allegations and Interrogatories” regarding certain funds JFK allegedly owed Ms. Owen. When JFK failed to respond to their interrogatories or appear at a hearing as garnishee, the Adamses obtained a default judgment against JFK. For reasons we are unable to adduce from the appellants’ abstract, the Adamses attempted to garnish Mr. Guy Ramsey’s certificate of deposit invested at Twin City Bank to satisfy the default judgment. Thereafter, Mr. Ramsey and JFK filed a motion with the trial court to have the default judgment set aside. The abstract, furnished by the Adamses, reflects a judgment against JFK; however, it does not reveal any judgments against Mr. Ramsey whatsoever. After the hearing on the issues, the trial court entered an order setting aside a default judgment against Guy Ramsey and a garnishment against Twin City Bank — no mention was made of the default judgment against JFK. The Adamses now appeal.

We cannot reach the merits of the case, for, as stated, the Adamses failed to comply with Ark. Sup. Ct. R. 4-2(a)(6). Pertinent pleadings are missing from the Adamses’ abstract, and abstracted judgments of the trial court contain serious misstatements as to parties and disposition. The abstract is not only woefully deficient, it includes materials which cannot be found in the transcript of trial. For example, the Adamses claim that the trial judge erred in setting aside a default judgment against JFK and Guy Ramsey, and in support of their claim, they note in their abstract that the trial court, in its order filed May 3, 1993, set aside a default judgment against Guy Ramsey and JFK, when in fact, neither the Adamses’ abstract nor the record of trial reveals the existence of a default judgment against Mr. Ramsey. Furthermore, appellants’ abstract does not contain an order setting aside a default judgment against JFK.

Rule 4-2(a)(6) specifically provides that the appellant’s abstract should consist of “an impartial condensation, without comment or emphasis, of only such material parts of the pleadings, proceedings, facts, documents, and other matters in the record as are necessary to an understanding of all questions presented to the Court for decision.” (Emphasis added.) Moreover, we have held it is the appellant’s burden to produce a record exhibiting prejudicial error, Haynes v. State, 314 Ark. 354, 862 S.W.2d 275 (1993), and that we cannot consider evidence on appeal that is not included in the transcript. See BWH, Inc. v. Metropolitan Nat’l Bank, 267 Ark. 182, 590 S.W.2d 247 (1979).

Obviously, the abstract of the final judgment of the court is incorrect and does not reflect the actual findings of the trial court. Likewise, there is not an abstract of judgment against Mr. Ramsey, and there are other materials contained in the Adamses’ brief, such as a lease agreement, a certified mail receipt, and a photocopy of a cancelled check, which are not found in the record of the hearing. Simply put, the state of the abstract is as such that we cannot determine or resolve the issues presented on appeal.

Noncompliance with Rule 4-2(a)(6) under these circumstances requires that we affirm the trial court. See Dixon v. State, 314 Ark. 378, 863 S.W.2d 282 (1993); Fruit v. Lockhart, 304 Ark. 457, 802 S.W.2d 930 (1991).

Affirmed pursuant to Rule 4-2(a)(6).

Corbin, J., not participating.