author: Annabelle Clinton Imber, Justice. Ray Thornton, Justice

text:
    Richard A. WEISS, Director, Department of Finance and Administration v. CHEM-FAB CORPORATION
    98-82
    984 S.W.2d 395
    Supreme Court of Arkansas
    Opinion delivered January 7, 1999

      Malcolm P. Bobo, for appellant.

      Walter Skelton, for appellee.
   Annabelle Clinton Imber, Justice.

This is a case of first impression that involves the interpretation of the Arkansas Gross Receipts Act of 1941, as amended. The chancellor ruled that Chem-Fab Corporation’s initial and replacement purchases of certain chemicals used in manufacturing aircraft parts were exempt from the Arkansas Gross Receipts Tax. We affirm in part and reverse in part.

The taxpayer, Chem-Fab Corporation, is a Flot Springs manufacturer of aluminum and titanium aircraft parts. These parts have unique shapes and contours and cannot be made with traditional machinery. Rather, a chemical milling process that uses several different chemicals shapes and forms the aircraft parts. Annealing chemicals physically alter the metal’s grain structure in order to bend and form the parts. These annealing chemicals do not require replacement because their useful life is indefinite. A chemical etching bath mills away excess metal through direct chemical action in order to form the requisite intricate contouring. Fifty percent of the chemical etching bath used to mill aluminum parts must be replaced, while the entire chemical etching bath used on titanium parts is discarded and replaced. These replacements occur every seven to ten days at a cost of roughly $12,000.00 for each replacement. Finally, two different chemicals are sprayed on the aircraft parts in order to check for the presence of cracks. These testing chemicals are completely consumed during this process and, thus, require replacement after each use.

On October 19, 1994, and August 25, 1995, Chem-Fab requested a refund from the Department of Finance and Administration (DF&A) for sales and use taxes paid on these chemicals, claiming they were machinery or equipment used direcdy in manufacturing and were exempt from taxation under Ark. Code Ann. § 26-52-402 and Arkansas Gross Receipts Tax Regulation GR-55. This request was denied by DF&A. Chem-Fab then brought suit in the Garland County Chancery Court for a refund of $13,823.59 plus interest. There was no dispute that Chem-Fab is a manufacturer. Nor was there any dispute that the annealing, etching, and testing chemicals were essential to and used directly in the manufacturing process. The chancellor ruled that these chemicals were equipment as that term is used in Ark. Code Ann. § 26-52-402 and that Chem-Fab was entitled to an exemption from the Arkansas Gross Receipts Tax for its initial purchases of those chemicals. While the chancellor found that replacement purchases of annealing chemicals were not exempt due to their infinite useful life, he concluded that Chem-Fab’s weekly purchases of etching and testing chemicals were exempt under Ark. Code Ann. § 26-52-402(a)(2)(A) and 26-52-402(a)(2)](B) as purchases of replacement equipment, reasoning that the replacement chemicals performed more efficiently than the old, saturated chemicals they replaced. Finally, the chancellor found that the replacement of fifty percent of the old etching chemicals with new etching chemicals qualified as a “substantial” replacement. DF&A now appeals the chancellor’s findings and conclusions.

We review tax-exemption cases de novo on appeal and do not set aside the findings of the chancellor unless they are clearly erroneous. Aluminum Co. of America v. Weiss, 329 Ark. 225, 946 S.W.2d 695 (1997); Martin v. Riverside Furniture Corp., 292 Ark. 399, 730 S.W.2d 483 (1987). There is a presumption in favor of the taxing power of the state, and all tax-exemption provisions must be strictly construed against the exemption. Aluminum Co. of America, supra. The claimant has the burden of establishing the right to an exemption beyond a reasonable doubt and “to doubt is to deny [the exemption].” Aluminum Co. of America, supra; Pledgor v. Baldor Int’l., Inc., 309 Ark. 30, 827 S.W.2d 646 (1992).

Chemicals as Equipment Under Ark. Code Ann. § 26-52-402

Arkansas Code Annotated § 26-52-402(a) (1) provides an exemption for equipment and machinery used to create or expand processing or manufacturing plants. In relevant part, the section provides:

(a) There is specifically exempted from the tax imposed by this act, the following:
(1)(A) Gross receipts or gross proceeds derived from the sale of tangible personal property consisting of machinery and equipment used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging of articles of commerce at manufacturing or processing plants or facilities in the State of Arkansas . . . but only to the extent that the machinery and equipment is purchased and used for the purposes set forth in this subdivision ....
(B) The machinery and equipment will be exempt under this subdivision if it is purchased and used to create new manufacturing or processing plants or facilities within this state or to expand existing manufacturing or processing plants or facilities within this state ....

Chem-Fab asserts that the chemicals it uses to manufacture aircraft parts are “equipment” as that term is used in the above provision and are thus exempt from taxation. We agree and affirm the chancellor’s holding on this issue.

Equipment is an exceedingly elastic term, the meaning of which should be determined from context. Pledger v. C.B. Form Co., 316 Ark. 22, 871 S.W.2d 333 (1994); Ragland v. Dumas, 292 Ark. 515, 732 S.W.2d 119 (1987). In Dumas, supra, we stated that the term equipment as used in this particular statute means “implements, tools or devices of some degree of complexity and continuing utility.” Although neither party refers to this definition in their briefs, we shall adhere to the definition of equipment adopted in Dumas. Consequently, any item falling within that definition will be considered “equipment” for purposes of qualifying for the exemption found in Ark. Code Ann. § 26-52-402(a)(1)(A).

Our first inquiry under Dumas must be to determine whether the chemicals here constitute “implements, tools or devices of some degree of complexity.” An “implement” is “an article serving to equip; a device used in the performance of a task; one that serves as an instrument or tool.” Merriam Webster’s Collegiate Dictionary, 583 (10th ed. 1997). The chemicals used by Chem-Fab in their manufacturing process clearly meet the definition of “implement” because they serve as instruments or tools to soften metal or to mill away excess metal. Further, these chemicals are by their very nature complex substances. We thus conclude that the chemicals here constitute “implements, tools, or devices of some degree of complexity.”

Turning to the second inquiry under Dumas, we must also determine whether the chemicals used by Chem-Fab possess continuing utility. In Dumas, we found that gravel used for site preparation and road construction was not equipment because it became fully integrated into a temporary road, the utility of which ended upon the termination of each individual oil-extraction project. See Dumas, supra. By contrast, the chemicals here are not fully integrated into some other object, the utility of which is confined to an individual project. Rather, these chemicals are used directly in the process of manufacturing a number of aircraft parts and, thus, have continuing utility.

For the above reasons, we conclude that the chemicals used by Chem-Fab in its manufacturing process come within the definition of equipment as that term is used in Ark. Code Ann. § 26-52-402. This conclusion is also supported by DF&A’s definition of equipment in Tax Regulation GR-55: “tangible personal property other than machinery which is directly used in the manufacturing process.” Agency interpretations of a statute, while not conclusive, are highly persuasive. Aluminum Co. of America, supra. These chemicals clearly qualify as equipment according to DF&A’s own definition of that term. Thus, we affirm the trial court’s holding that Chem-Fab proved beyond a reasonable doubt that its chemicals were equipment and that Chem-Fab was entided to an exemption from the Arkansas Gross Receipts Tax for its initial purchases of those chemicals.

Replacement Purchases of Chemicals Under Ark. Code Ann. § 26-52-402

DF&A’s second point on appeal is that Chem-Fab’s replacement purchases of chemicals are taxable purchases which are not exempt under Ark. Code Ann. § 26-52-402(a)(2)(A). That section provides:

(2) (A) Machinery purchased to replace existing machinery and used directly in producing, manufacturing, fabricating, assembling, finishing, or packaging of articles of commerce at manufacturing or processing plants or facilities in this state will be exempt under this subdivision. . . .

The next section of the statute articulates two requirements which must be met before replacement purchases of machinery and equipment qualify for an exemption. More specifically, it provides that:

(B)(i) “Machinery purchased to replace existing machinery” means that substantially all of the machinery and equipment required to perform an essential function is physically replaced with new machinery that performs the essential function more efficiently or with a longer useful life than the old machinery being replaced. . . .

Thus, replacement machinery or equipment must: (1) be a substantial replacement; and (2) must either be more efficient or have a longer useful life than the equipment replaced.

DF&A contends that the chancellor erred when he found that the replacement chemicals were exempt because they worked more efficiently than the old, saturated chemicals at the time of replacement. According to DF&A, the efficiency of the chemicals being replaced should be determined at the time those chemicals were originally purchased and not at the time of replacement.

At the outset, it should be noted that Ark. Code Ann. § 26-52-402(a)(2)(B) does not specify a particular point in time when the efficiency or useful life of new equipment should be compared to that of old equipment, i.e., whether to compare the old and new equipment at.the time of replacement or at the time of purchase. Chem-Fab argues that the comparison must be made at the time the old equipment is replaced in order to be consistent with the intent of the General Assembly set forth in Ark. Code Ann. § 26-52-402(a) (2) (C):

(2) (C) It is the intent of subsection (a) (2) of this section to provide the foregoing exemptions as incentives to encourage . . . the modernization of existing manufacturing plants in Arkansas through the replacement of old, inefficient, or technologically obsolete machinery and equipment ....

DF&A, on the. other hand, asserts that replacement equipment must be compared with old equipment as of the time each was purchased. To do otherwise, that is, to make the comparison at the time of replacement, would result in a broad exemption for all replacement equipment. DF&A further asserts that the statutory provision requiring more efficiency or a longer useful life would be rendered meaningless under the interpretation suggested by Chem-Fab, because new equipment is always more efficient or longer lasting than old equipment when the comparison is made at the time of replacement.

Under our well-settled rules of statutory construction, tax-exemption provisions must be strictly construed and if there is any doubt concerning their application, the exemption must be denied. Aluminum Co. of America, supra. In this case, Chem-Fab and DF&A each urge a different statutory interpretation. Although both statutory interpretations are reasonable, doubt remains as to which interpretation is correct. Under these circumstances, we must deny the exemption, because “to doubt is to deny.” Id. Thus, we agree with DF&A’s determination that Chem-Fab failed to establish its entitlement to the exemption for replacement chemicals beyond a reasonable doubt, and because a tax-exemption provision must be construed against the exemption, we reverse the chancellor’s ruling that Chem-Fab was entitled to the exemption.

Affirmed in part and reversed in part.

Corbin and Thornton, JJ., concur in part and dissent in part.

Smith, J., not participating.

Ray Thornton, Justice

concurring in part and dissenting in part. I agree with the majority that the statutory exemption from sales and use taxes set out in Ark. Code Ann. § 26-52-402 for equipment used directly in the manufacture of articles of commerce at plants in the State of Arkansas is applicable to chemicals used for milling, shaping, and finishing such products. However, I cannot agree with the majority’s conclusion that the replacement of such equipment is not exempt from sales and use taxes, and respectfully dissent from that holding.

The majority is clearly correct when it interprets the exemption statute as applying to chemicals used in the manufacturing process. That intent is expressed in Ark. Code Ann. § 26-52-402(c)(2) which states:

(A) Machinery and equipment used in actual production includes machinery and equipment that meet all other applicable requirements and which cause a recognizable and measurable mechanical, chemical, electrical, or electronic action to take place as a necessary and integral part of manufacturing, the absence of which would cause the manufacturing operation to cease.

Ark. Code Ann. § 26-52-402(c)(2)(A) (Repl. 1997).

All parties agree that without the chemical equipment used by Chem-Fab in this manufacturing plant, the production of these aircraft parts would cease. If any further statutory citation is needed to complete the clear and unambiguous legislative definition of chemicals as part of the equipment used in the manufacture of a finished article of commerce, reference to the language used by the General Assembly in listing specific exclusions from taxation is useful. Some of these exclusions are set out in Ark. Code Ann. § 26-52-402(c)(2) as follows:

(B) Machinery and equipment “used directly” in the manufacturing process shall include, but shall not be limited to, the following:
(iv) Machinery and equipment that produce steam, electricity, or chemical catalysts and solutions that are essential to the manufacturing process but which are consumed during the course of the manufacturing process and do not become necessary and integral parts of the finished product.

Ark. Code Ann. § 26-52-402(c)(2)(B) (Repl. 1997).

This statutory language is a clear and unambiguous instruction that chemical catalysts and solutions that are essential to the manufacturing process should be excluded from sales and use taxes. In my view, the statute also suggests that when chemical catalysts and solutions essential to the manufacturing process are depleted, replacement of such chemical equipment should also be excluded from sales and use taxes.

Our rules of statutory interpretation are clear. In interpreting a statute, we will give the words in the statute their ordinary and common usage. Burcham v. City of Van Buren, 330 Ark. 451, 455, 954 S.W.2d 266, (1997). Additionally, in construing any statute, we will place the statute beside other statutes relevant to the subject matter in question, giving it meaning and effect derived from the combined whole. Vanderpool v. Fidelity & Cas. Ins. Co., 327 Ark. 407, 415, 939 S.W.2d 280, (1997).

With reference to the replacement of equipment excluded from sales and use taxes, Ark. Code. Ann. § 26-52-402 provides in pertinent part the following:

(a) There is specifically exempted from the tax imposed by this act, the following:
(1) (A) Gross receipts or gross proceeds derived from the sale of tangible personal property consisting of machinery and equipment used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging of articles of commerce at manufacturing or processing plants or facilities in the State of Arkansas, . . .
(2) (A) Machinery purchased to replace existing machinery and used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging of articles of commerce at manufacturing or processing plants or facilities in this state will be exempt under this subdivision;
(B)(i) “Machinery purchased to replace existing’machinery” means that substantially all of the machinery and equipment required to perform an essential function is physically replaced with new machinery that performs the essential function more efficiently or with a longer useful life than the old machinery being replaced.

Ark. Code. Ann. § 26-52-402 (Repl. 1997)(emphasis supplied).

In my view, the plain and unambiguous words used in the statute providing an exemption for replacement of existing machinery and equipment were chosen by the legislature to carry out and accomplish the legislative intent of encouraging the manufacture of articles of commerce within the State of Arkansas. The legislature declared that the State would not impose sales or use taxes upon equipment, or replacement equipment, that is essential to, and directly a part of the manufacturing process. The exemption from taxes was broad enough to include many enterprises and occupations which encourage economic development. We are told that “mining, quarrying, refining, extracting oil and gas, cotton ginning, the drying of rice, soybeans, and other grains and the manufacturing of feed, the processing of poultry or eggs and livestock and the hatching of poultry, and printing of all kinds, types, and characters, including the services of overprinting, and photographic processing incidental to printing,” together with retreading of tires for resale, all qualify for this tax exemption. See Ark. Code Ann. § 26-52-402(b). With respect to new and replacement equipment used in agricultural production, Ark. Code Ann. § 26-52-403 provides in pertinent part:

(a) The sale of new and used farm equipment and machinery shall not be subject to the Arkansas gross receipts tax . . . but shall be exempt therefrom.

Ark. Code Ann. § 26-52-403 (Repl. 1997)(emphasis supplied).

It seems clear that the legislative intent was to encourage manufacturing, agriculture, and economic development by providing exemptions from sales and use taxes on new or replacement machinery or equipment used for those purposes. Rather than addressing the question of taxation of replacement equipment, the Department’s principal argument was that chemicals used in this process should not be considered as equipment that is qualified for the tax exemption.

When the trial court concluded that the chemicals were manufacturing equipment, the Department then argued that they were not substantially replaced. The majority opinion correctly recognizes that the chemicals are replacement equipment for the old chemical solutions which have, through use, lost their efficacy, and no longer will support the manufacturing process. However, the majority then reasons that the new tool is no better than the old tool was at the time it was new, and therefore is not exempted. I do not believe that is a correct interpretation of the statute.

I believe the statutory intent to provide an exemption for new replacement equipment that replaces old and worn-out manufacturing equipment is plain and unambiguous. If, as the majority concludes, that intent is not plain and unambiguous, the record before us does not answer a question which is essential to determination of legislative intent: we are not informed as to how the agency has answered the question whether other new equipment that replaces old, worn-out equipment, would be eligible for a tax exemption. We were told in oral argument by the appellee that the Department’s policy has always been: “If you have a 100 horsepower machine that has to be replaced and it has been used ten years . . . that is a replacement and I believe that it [the tax exemption] has always been allowed. [The statute] just says ‘perform the essential function more efficiently.’”

In the event the statute is considered ambiguous, certainly this matter should be remanded for a determination by the trial court of the Revenue Department’s rules, regulations, and practices for granting tax exemptions for replacement equipment. The agency’s own interpretations of this provision, while not binding upon the court, would instruct us as to whether the Department’s argument in this case is a novel approach flying in the face of other agency actions.

I note that the interpretation of the rule announced by the majority contradicts the rule applied to agricultural equipment. Administrative agencies are better equipped than courts, by specialization, insight through experience, and more flexible procedures to determine and analyze underlying legal issues affecting their agencies. Wacaser v. Insurance Comm’r., 321 Ark. 143, 146, 900 S.W.2d 191 (1995). We should not adopt an interpretation of the statute that the Revenue Department itself has not accepted and adopted without first considering the rationale for its actions.

It seems clear to me that a plain-language reading of the statute would require the conclusion that a replacement would be eligible for the exemption since the new machinery would clearly have a longer useful life than the old machinery being replaced. The majority interprets the meaning of the words used in the statute without a showing that the interpretation arrived at by the majority has ever been used by the Department.

I believe that when a chemical etching and milling compound has been worn out and has become inefficient for the manufacturing process, its replacement with a new chemical etching and milling compound is both more efficient and has a longer useful life than the worn-out equipment being replaced. For these reasons I cannot agree with the majority’s conclusion that even though the original chemical equipment was eligible for an exemption, the exemption is not available to replacement of that equipment.

I respectfully dissent from the majority opinion and express the hope that the General Assembly will address the issue promptly, and before the consequences of this decision result in the loss of manufacturing enterprises from this state.

Corbin, J., joins.


source: Caselaw Access Project

author: Ray Thorton, Justice.

license: Public Domain

text:
    Herbert BROWN d/b/a Lavaca Heating & Electric, Inc. v. ARKANSAS STATE HEATING, VENTILATION, AIR CONDITIONING and REFRIGERATION (HVACR) LICENSING BOARD
    98-984
    984 S.W.2d 402
    Supreme Court of Arkansas
    Opinion delivered January 7, 1999

      Pryor, Barry, Smith, Karber & Alford, PLC, by: Gregory T. Karber, for appellant.

      Rick D. Hogan, for appellee.
   Ray Thorton, Justice.

Appellant, Herbert Brown, appeals from a decision by the Circuit Court of Sebastian County, affirming the decision and ruling of the Arkansas State Heating, Ventilation, Air Conditioning and Refrigeration (HVACR) Licensing Board that imposed a fine on the appellant and revoked his license following a hearing on July 9, 1997. Appellant raises several arguments for reversal of the trial court’s decision, but none of the arguments was presented at the hearing before the Board, and appellant did not seek to obtain an order from the circuit court to produce additional evidence for consideration as provided by Ark. Code. Ann. § 25-15-212 (Repl. 1996). Appellant also appeals from the trial court’s dismissal of his claim under the Civil Rights Act, Ark. Code. Ann. §§ 16-123-101 — 16-23-108 (Supp. 1997). We find no error in the trial court’s decision, and affirm.

We first address the issue concerning the dismissal by the trial court of the allegations concerning a violation of the Civil Rights Act. Appellant contends that the trial court’s dismissal of his Arkansas Civil Rights Act claim for failure to state facts upon which relief could be granted was error. Appellant contended in his complaint that appellee, the HVACR Licensing Board, acting under color of state of law, effected a taking of appellant’s property, his license, without due process of law. In its response to appellant’s complaint, appellee argued that the trial court lacked both subject-matter jurisdiction and personal jurisdiction over appellee relative to the claim under the Civil Rights Act; that venue of that claim was not proper in that judicial district; and that appellant had failed to state a claim pursuant to Ark. R. Civ. P. 12(b)(6).

In reviewing a trial court’s decision on a motion to dismiss under Ark. R. Civ. P. 12(b)(6), the reviewing court treats the facts alleged in the complaint as true and views them in the light most favorable to the party who filed the complaint. Neal v. Wilson, 316 Ark. 588, 595, 873 S.W.2d 552, 556 (1994). Here, appellant’s complaint charges that appellee, the HVACR Licensing Board, violated his civil rights by taking his property, his HVACR license, without due process of law. Reading the facts as alleged in the complaint as true and in the light most favorable to appellant, we cannot say that the trial court’s dismissal of the complaint was error. Appellant’s complaint was flawed because appellant named the Board as the defendant in the suit, rather than the Board members in their individual capacities.

Article 5, section 20, of the Constitution of the State of Arkansas reads, “The State of Arkansas shall never be made a defendant in any of her courts.” Ark. Const, art. 5, § 20. In regard to this immunity, we have held that the constitutional prohibition was not merely declaratory that the state could not be sued without her consent, but that all suits against the state were expressly forbidden. Beaulieu v. Gray, 288 Ark. 395, 398, 705 S.W.2d 880, 881 (1986); Page v. McKinley, 196 Ark. 331, 336, 118 S.W.2d 235 (1938). Where the pleadings show that the action is, in effect, one against the state, the trial court acquires no jurisdiction. Id. Further, where a suit is brought against an agency of the state with relation to some matter in which the appellee represents the state in action and liability, and the state, though not a party of record, is the real party in interest so that a judgment for the plaintiff would operate to control the action of the state or subject the state to liability, the action is, in effect, one against the state and is prohibited by the constitutional bar. Id. The Legislature preserved sovereign immunity within the Arkansas Civil Rights Act by stating: “Nothing in this subchapter shall be construed to waive the sovereign immunity of the State of Arkansas.” Ark. Code Ann. § 16-123-104 (Supp. 1997).

Appellant named the Board itself in his civil-rights claim, effectively naming the State itself as the real party in interest as described in Page and Beaulieu, rather than naming any of the Board members in their official or individual capacities. A suit against a state official in his or her official capacity is not a suit against that person, but rather is a suit against that official’s office. Will v. Michigan Dep’t. of State Police, 491 U.S. 58 (1989). See generally Ark. Code Ann. sect; 16-123-105(c) (Supp. 1997) (“When construing this section, a court may look for guidance to state and federal decisions interpreting the Federal Civil Rights Act. . .”) This court has previously held that neither the state nor a state agency can be sued under the Federal Civil Rights Act, 42 U.S.C. § 1983. Honor v. Yamuchi, 307 Ark. 324, 331, 820 S.W.2d 267, 271 (1991). See also Murphy v. State of Arkansas, 127 F.3d 750, 754 (8th Cir. 1997) (the Eleventh Amendment barred the appellant’s section 1983 claims against the State of Arkansas and two state agencies); Egerdahl v. Hibbing Community College, 72 F.3d 615, 619 (8th Cir. 1985)(in the absence of consent to suit, actions against a state or one of its agencies or departments are proscribed by the Eleventh Amendment). Therefore, we conclude that appellant’s argument that the trial court erred in dismissing his civil-rights claim for failure to state facts upon which relief can be granted is without merit.

Appellant’s other allegations of error relate to the conduct of proceedings before the Board. This is an administrative review pursuant to Ark. Code. Ann. § 17-25-312 (Repl. 1995), which provides that all appeals shall follow the provisions of the Arkansas Administrative Procedures Act, Ark. Code. Ann. §§ 25-15-201— 25-15-214 (Repl. 1996, Supp. 1997). The HVACR is an agency created pursuant to Ark. Code. Ann. § 17-33-201 (Supp. 1997). As such, all hearings conducted by the Board and all appeals taken from the decisions of the board shall be pursuant to the Arkansas Administrative Procedures Act. Ark. Code. Ann. § 17-33-203 (Repl. 1995). Appellant urges us to consider allegations of error committed by the Board during its July 9, 1997 hearing, and to reverse the decision by the trial court that those allegations, contentions, and positions could not be considered on review, because they were not presented to the Board.

Appellant acknowledges that these allegations of error were not made at the hearing before the Board, but contends that appellant’s failure to attend the hearing, or to be represented at the hearing, did not constitute a waiver of the Administrative Procedures Act or the HVACR Enabling Act. This argument will not withstand rigorous analysis. The requirement that arguments, evidence, and objections must be presented to the agency before which the matter is being presented is to allow the agency to apply its special knowledge and expertise, and to build a record which appellate courts may review. We do not review agency actions to determine the absence of error, but review those alleged errors which have been objected to and preserved for our review. Wacaser v. Insurance Comm’r, 321 Ark. 143, 145, 900 S.W.2d 191, 192 (1995); Arkansas Appraiser Lic. and Cert. Bd. v. Biles, 320 Ark. 110, 895 S.W.2d 901, 903 (1995); Riverways Home Care v. Ark. Health Serv. Comm’n., 309 Ark. 452, 457, 831 S.W.2d 611, 613 (1992).

We require a person represented at a hearing to make proper objections for the purpose of allowing the agency to correct the alleged error, and for the purpose of preserving the argument for review. It would be inconsistent and unjust for us to allow another person to ignore the proceeding, fail to attend or object, and thereafter be allowed to obtain a full review of the proceeding to determine whether any error might have been objected to or preserved if someone had been there to do so. The issue is not whether appellant waived his rights to procedural rules, but whether appellant complied with the well-established principles of law which apply to preserving issues for appeal. See Riverways, supra; Wright v. Ark. State Plant Bd., 311 Ark. 124, 132, 842 S.W.2d 42, 46 (1992); Alcoholic Beverage Control Div. v. Barnett, 285 Ark. 189, 192, 685 S.W.2d 511, 513 (1985).

In the case before us for review, there is no question that appellant had knowledge of the concerns which had been presented to the Board, and of the actions of the Board in seeking to have the faulty work repaired. On May 7, 1997, Appellant was mailed a notice of the hearing to be held on July 9, 1997. While the Arkansas Administrative Procedures Act provides that such notice may be sent by regular mail, Ark. Code. Ann. §§ 25-15-208(a), 25-15-210(c), and 25-15-211(c) (Repl.1996), the notice to appellant was sent by certified mail which was refused on May 10, 1997, and returned to the appellee. All that is required for notice in an administrative agency hearing may be provided by regular mail. We note that the service of the notice by certified mail would have been valid even under the more strict requirements of Ark. R. Civ. P. 4 if the letter was marked refused. See Meeks v. Stevens, 301 Ark. 464, 785 S.W.2d 18 (1990). We note further that there is no contention that appellant was not informed of the possible sanctions to be imposed on him; however, testimony was presented that suggested he had little interest in maintaining his license.

Appellant argues that the statute of limitations had run before the Board commenced its action, but this argument was not presented to the board, and it is by no means certain that the statute would have barred the action if it had been properly raised and developed for appeal. We find no error in the trial court’s finding that this issue was not preserved for appeal.

Finally, the appellant argues that the failure of the Chairman of the HVACR board to recuse from consideration of the case was so clearly a violation of the provisions of the Administrative Procedures Act that even in the absence of a properly made and preserved objection, the violation of the principles of the act was so serious as to require us to reverse the Board’s decision and send the matter back for further proceedings. During the hearing, the Chairman stated that one of his companies had been called upon to make repairs to correct the faulty installation which appellant would not repair. While we are gravely concerned about the Chairman’s participation in the hearing in light of his knowledge of the work at issue, appellant did not preserve this issue for our review, and it is well established that issues must be raised before the administrative body in order to be preserved on appeal. Ark. Cemetery Bd. v. N. Hills Mem. Gdns., 272 Ark. 172, 173, 616 S.W.2d 713 (1981).

Having made no objection to the Board, a statutory procedure remained available to appellant to seek to reopen the hearing for presentation of additional evidence, but no effort was made to pursue this procedure. The Arkansas Administration Procedures Act provides that:

If, before the date set for hearing, application is made to the court for leave to present additional evidence and the court finds that the evidence is material and that there were good reasons for failure to present it in the proceeding before the agency, the court may order that the additional evidence be taken before the agency upon any conditions which may be just. The agency may modify its findings and decision by reason of the additional evidence and shall file that evidence and any modifications, new findings, or decisions with the reviewing court.

Ark. Code Ann. § 25-15-212(f).

This court has previously addressed this issue in Mid-South Rd. Builders, Inc. v. Ark. Contractors Lic. Bd., 328 Ark. 630, 946 S.W.2d 649 (1997), where the appellant argued that the circuit court should have called for an evidentiary hearing concerning procedural irregularities at the Board hearing. We declined to allow the appellant in that case to raise the issue for the first time on appeal where the appellant had never requested an evidentiary hearing or moved to present additional evidence pursuant to Ark. Code Ann. § 25-15-212(f). Mid South Rd. Builders, Inc. v. Ark. Contractors Lic. Bd., 328 Ark. 630, 635, 946 S.W.2d 649, 652 (1997).

We hold that the trial court correctly determined that the issues that appellant sought to raise were barred because the issues were not properly preserved for review, and because the civil-rights action was not filed against the proper defendants.

Affirmed.

Smith, J., not participating.


text:
    Rick SMITH v. CITY of ARKADELPHIA
    98-87
    984 S.W.2d 392
    Supreme Court of Arkansas
    Opinion delivered January 7, 1999
    [Petition for rehearing denied February 4, 1999.]

      Winston C. Mathis, for appellant.

      McMillan, Turner, McCorkle & Curry, by: Ed McCorkle, for appellee.
   Ray Thorton, Justice.

Appellant. Rick Smith, brought this action for an injunction against appellee, City of Arkadelphia, claiming a property interest in building permits issued by the city on March 11 and 18, 1997. He contends that the issuance of the building permits exempted him from complying with Ordinance No. 97-7, a revised building and safety code, which was enacted on April 3, 1997. In denying relief, the trial court found that no vested property rights were acquired by obtaining the permits or by appellant’s preparations for construction prior to the enactment of the ordinance; that Ordinance No. 97-7 does not revoke the buEding permits, but only imposes additional requirements for manufactured homes placed within the city limits after the effective date of the ordinance; and that the implementation of the ordinance was a valid exercise of the city’s police powers. AppeEant chaEenges these findings on appeal. We find no error in the chancery court’s order and affirm.

For many years before a March 1, 1997 tornado ripped through the city of Arkadelphia, City Ordinance No. B-425 regulated the construction and safety features required for manufactured homes placed within the city. Because of the destruction and havoc caused by the storm, the city drafted an amendment to Ordinance No. B-425 to add new requirements for the construction and anchoring of manufactured homes. This new Ordinance No. 97-7 was effective for aE new placements of manufactured homes after the date of the passage of the new ordinance on April 3, 1997.

AppeEant owned property within the city where some manufactured homes had been substantiaEy destroyed or heavEy damaged. Mr. Smith was granted several buEding permits during March of 1997, to locate manufactured homes on lots which he owned in the city. Mr. Smith placed one manufactured home on one of these lots before the new ordinance became effective on AprE 3, 1997. As this home was placed within the city before the effective date of the new ordinance, there is no disagreement that the construction and safety features of this manufactured home were controlled by the provisions of the old ordinance No. B-425 in effect at the time of its placement. Mr. Smith did not place any other manufactured homes on the lots for which permits had been granted before April 3, 1997.

The trial court found that the building permits were not revoked, but remained effective. Because there is no evidence to suggest that the building permits were revoked, we affirm the trial court on this point. The evidence was undisputed that the provisions of Ordinance No. B-425, which regulated the safety and construction of manufactured homes, were amended. The trial court did not commit error in finding that the financial effect of the adoption of the new Ordinance No. 97-7 was to require additional expenditures to meet the provisions of the new ordinance.

Mr. Smith advances two issues on appeal, but both hinge on a common factor: whether the issuance of the building permits together with some grading and gravel work in preparing sites, created vested property rights in the applicability of the less rigorous provisions of the old ordinance. Mr. Smith contends that the issuance of building permits while the old Ordinance No. B-425 was effective exempted him from the provisions of the new Ordinance No. 97-7, and granted him a property right to proceed with construction under the terms of the old, repealed provisions of Ordinance No. B-425. We disagree.

The general rule is that a grant of a license by a municipality is made with the implied reservation of the right to impose reasonable police regulations, which may go to the extent of revoking the license, which was not done in the case before us. Therefore, the possession of a license does not exempt the licensee from the operation of ordinances and regulations that were legally enacted in the exercise of such powers after issuance of the license. 51 Am. Jur. 2d Licenses and Permits § 145 p. (1970).

We have previously approved this general rule in Wilder v. Little Rock, 150 Ark. 439 (1921). There the appellant, Wilder, contended that by the issuance of a building permit and the payment of rent on the premises, and other expenditures for lumber, etc., he had acquired a vested property right which could not be taken away by the action of the city. In the case before us, Mr. Smith contends that a property right was established when, in rebanee upon his budding permit, he did some site preparation work, and prepared some manufactured homes for placement on the city lots. In addressing substantially the same issues of law and fact in Wilder, we stated:

The permit was merely the granting of a privilege, and did not constitute a contract between the city and appellant. No vested rights were acquired by obtaining a permit, and none arose in the acquisition of property or preparations for the construction of the building prior to the enactment of the new ordinance, so we do not have to deal here with the question of displacement of vested rights by the passage of the ordinance extending the fire limits. The city council was clearly within its powers in passing the new ordinance, and, as before stated, appellant was not exempted from its operation by the fact that he held a permit to construct a building on the lot in question.

Wilder at 442.

Arkansas Code Ann. § 14-56-201 (Repl. 1998) gives municipal corporations the power to regulate erection, construction, reconstruction, alteration, and repair of buildings and to provide for the removal of any buildings or additions erected contrary to this provision. In addition, Ark. Code Ann. § 14-55-102 provides:

Municipal corporations shall have the power to make and publish bylaws and ordinances, not inconsistent with the laws of this state, which, as to them, shall seem necessary to provide for the safety, preserve the health, promote the prosperity, and improve the morals, order, comfort, and convenience of such corporations and the inhabitants thereof.

Ark. Code Ann. § 14-55-102 (Repl. 1998).

Thus, municipalities have the power and duty to make reasonable provisions for the safety of persons and property and municipal authorities have wide discretion in these matters. See City of Ft. Smith v. Van Zandt, 197 Ark. 91, 122 S.W.2d 187 (1938). In Phillips v. Town of Oak Grove, 333 Ark. 183, 968 S.W.2d 600 (1998), we stated that a city has the plenary authority to exercise its police power to protect public health and safety which is founded on public necessity. Id. at 189, 968 S.W.2d at 603. In fact, the mere possibility of public harm is a sufficient basis for a municipality to regulate under its police power. Id. at 191, 968 S.W.2d at 604.

Appellant argues, however, that by acting upon a building permit, a property right may develop when good faith acts of reliance are taken on the premises, citing Tankersley Bros. Indus. Inc. v City of Fayetteville, 227 Ark. 130, 296 S.W. 2d 412 (1956). In that case the appellant was granted a building permit, and constructed a building. Four months after construction was complete, the city brought an action to revoke the permit and require the appellant to remove the building. In Tankersley, we held that the city had allowed the property owner to proceed to construct and operate the building, and that the city was equitably estopped from revoking the building permit. Based upon Tankersley, the trial court could have found that the city could not compel Mr. Smith to remove the one manufactured home which was placed in the city before the effective date of the new ordinance. However, this issue was not raised because the city did not seek to apply Ordinance 97-7 to buildings placed before the effective date of the ordinance. Tankersley suggests that an applicant for a building permit may acquire a kind of property right when he has incurred liability thereon. Id. at 135, 296 S.W.2d at 415 (emphasis added). This right is not unlimited. Tankersley goes on to state that it is generally held the permit cannot be revoked without cause or in the absence of any public necessity for such action. Id. As a general rule, property is not exempt from the operation of subsequent ordinances and regulations legally enacted by the corporation. Id. (citing 43 Corpus Juris § 380, p. 349).

Here, in light of the devastation caused by the tornado, the trial court did not commit error by finding that the city had authority to exercise the police power granted by the legislature by adopting Ordinance No. 97-7. See Phillips v. Town of Oak Grove, 333 Ark. 183, 968 S.W.2d. 600 (1998); City of Ft. Smith v. Van Zandt, 197 Ark. 91, 122 S.W.2d 187 (1938). Because we have determined that appellant did not acquire a vested property right in either the building permit, or the underlying regulatory Ordinance No. B-425, we need not address appellant’s second point on appeal, as that point is predicated upon the existence of a vested property right.

Because of the need for the city to regulate the standards of construction applicable to the rebuilding of the city following the March 1, 1997 tornado, we agree with the trial court’s findings that the city had a rational basis for using the effective date of Ordinance No. 97-7 as the date for commencing the new, more rigorous regulations contained in that ordinance. We also find no error in the trial court’s findings that the application of the provisions of Ordinance No. 97-7 to construction of homes placed in the city from and after the passage of the ordinance is a valid exercise of the police powers of the city and did not revoke the previously issued building permits. We affirm.

Smith J., not participating.


author: Per Curiam.

text:
    Darrell Lamar HAIRE v. STATE of Arkansas
    CR 98-1438
    982 S.W.2d 669
    Supreme Court of Arkansas
    Opinion delivered January 7, 1999

      William O. James, Jr., for appellant.
    No response.
   Per Curiam.

Appellant, Darrell Lamar Haire, by his attorney, William O. James, Jr., has filed a motion for

rule on the clerk. Mr. James admits in the motion that the record was tendered late due to a mistake on his part. We find that such an error, admittedly made by the attorney for a criminal defendant, is good cause to grant the motion. See In Re: Belated Appeals in Criminal Cases, 265 Ark. 964 (1979) (per curiam). Accordingly, the motion is granted. A copy of this opinion will be forwarded to the Committee on Professional Conduct. Id.


text:
    Drew Malone RAINES III v. STATE of Arkansas
    CR 98-1447
    983 S.W.2d 424
    Supreme Court of Arkansas
    Opinion delivered January 7, 1999

      Appellant, pro se.
    No response.
   Per Curiam.

Appellant Drew Malone Raines III was convicted by a jury of failure to pay vehicle registration and failure to maintain liability insurance. The trial court entered judgment on April 1, 1998. Appellant filed a posttrial motion for a new trial on April 14, 1998; the trial court denied the motion on May 5, 1998. Appellant filed a notice of appeal on June 5, 1998, thirty-one days after the posttrial motion was denied. Appellant, appearing pro se, has filed a motion for rule on the clerk, which we treat as one for belated appeal.

The motion reflects that Appellant “is not learned in the law,” and that the notice of appeal was not timely filed due to a mistake, error of calculation, and “personal family stress not in memory at this time.” The motion does not contain any explanation of the personal family stress that he allegedly suffered. He asserts that such reasons demonstrate good cause to grant the belated appeal. We disagree, as the reasons given amount to no more than a claim of ignorance of our procedural rules.

Where the appellant fails to file a timely notice of appeal, a belated appeal will not be allowed absent a showing by the appellant of good cause for the failure to comply with proper procedure. Leavy v. Norris, 324 Ark. 346, 920 S.W.2d 842 (1996) (per curiam). Mere ignorance of appellate procedure alone is not good cause for granting a belated appeal. Thompson v. State, 280 Ark. 163, 655 S.W.2d 424 (1983) (per curiam). Moreover, the fact that the appellant is proceeding without counsel does not in itself constitute good cause for the failure to conform to the prevailing rules of procedure. Leavy, 324 Ark. 346, 920 S.W.2d 842. Appellants, including those proceeding without counsel, are responsible for following procedural rules in perfecting an appeal. Strawbridge v. State, 327 Ark. 679, 940 S.W.2d 477 (1997) (per curiam).

Motion denied.


author: W.H. “Dub” Arnold, Chief Justice.

text:
    OFFICE of CHILD SUPPORT ENFORCEMENT v. Sandra L. (Fry) EAGLE
    98-532
    983 S.W.2d 429
    Supreme Court of Arkansas
    Opinion delivered January 14, 1999

      Grider Law Firm, P.L.C., by: Murrey L. Grider, for appellant.

      David J. Throesch, for appellee.
   W.H. “Dub” Arnold, Chief Justice.

On December 10, 1987, an Arkansas Divorce Decree was entered between Jolly Ray Fry and the appellee, Sandra Lynn (Fry) Eagle. That decree awarded custody to Jolly Ray Fry and set child support in the amount of $40.00 per week.

On July 26, 1990, an order was entered by the Court of Common Pleas, Juvenile Division of Summit County, Ohio, through the Revised Uniform Reciprocal Enforcement of Support Act (RURESA), whereby that court found that the appellee, Sandra L. Cain (Fry), was $1,353.00 in arrears and further ordered that she pay $175.00 per month as support. On July 8, 1993, the same court found appellee unable to work and ordered that her child-support payments be held in abeyance.

On August 19, 1997, the appellant (Office of Child Support Enforcement) filed a Motion to Intervene and Motion for Citation in the Lawrence County, Arkansas, Chancery Court, seeking to obtain a judgment of arrears against Sandra L. (Fry) Eagle, based upon the divorce decree entered on December 10, 1987, in Lawrence County, for unpaid child-support arrearage back to the date of the Summit County, Ohio, Order of July 26, 1990.

By order entered on January 29, 1998, the Chancery Court of Lawrence County, Arkansas, determined that the July 8, 1993, order of the Summit County, Ohio, Court of Common Pleas holding the appellee’s child support in abeyance should be given full faith and credit and awarded a judgment for arrears in the amount of $1,427.00 as of November 30, 1997, rather than $11,475.63, which would have been the amount of child-support arrears if the court had not given full faith and credit to the Ohio order. It is from this ruling of the Lawrence County Chancery Court, granting full faith and credit to the July 8, 1993, order of the Summit County, Ohio, Court of Common Pleas that this appeal is taken.

Appellant asserts as its only point on appeal that the trial court erred in giving full faith and credit to the Summit County, Ohio, Common Pleas Court, thus reducing the amount of arrears owed by the appellee accordingly.

We review chancery cases de novo on the record, but do not reverse a finding of fact by the chancellor unless it is clearly erroneous. Clifford Family Ltd. Liability Co. v. Cox, 334 Ark. 64, 971 S.W.2d 769 (1998); Barber v. Watson, 330 Ark. 250, 253, 953 S.W.2d 579 (1997); Holaday v. Fraker, 323 Ark. 522, 920 S.W.2d 4 (1996).

The recent case of Jefferson County Child Supp. Enforcement v. Hollands, 327 Ark. 456, 939 S.W.2d 302 (1997), is controlling on the issue at bar. In that case, this Court held:

We agree with the courts of other jurisdictions that the “responding court” in a RURESA action, such as the Jefferson Chancery Court in this case, “may enter its own support order prospectively raising or lowering the amount of the support obligation, if the circumstances before it warrant such a change.” White-Nathan v. Nathan, 888 P.2d 237, 240 (Ariz. App. Div. 1 1994). However, “a variation between the support amount provided in the RURESA order and that in the underlying support order does not in itself alter or modify the underlying support order.” Id. If the RURESA order of the “responding court” does not specifically provide that it is modifying or nullifying the underlying support order, “the RURESA support order does not nullify or supersede the original support order, and arrearages will continue to accumulate under that order.” id. at 241. See also Kranz v. Kranz, 525 N.W.2d 777, 781 (Wis. App. 1994) (stating that it “is sensible to require a responding court to enforce only the level of support it determines is reasonable under its laws,” but maintaining that the responding court’s “determination does not affect the enforceability of the support ordered in the initiating court’s prior judgment”); Wade v. Wade, 552 So.2d 1279, 1281 (La.App. 5 Cir. 1989) (“The trial court is correct in its finding that the defendant is entitled to credit for amounts paid pursuant to the Alabama URESA order, but is still in arrears for the difference between that amount and the amount due on the Louisiana order, since no modification by the Alabama court supersedes the Louisiana judgment.”). See Annotation, 31 A.L.R. 4th 347 (1984).

Jefferson County Child Supp. Enforcement v. Hollands, 327 Ark. at 464.

In the instant case, which was a RURESA action, the support amount was modified. However, the order of the “responding court” (here, the Summit County, Ohio, Court of Common Pleas) did not specifically provide that it was modifying or nullifying the underlying support order, as would have been required under the Jefferson County case; therefore, in accordance with Jefferson County, the RURESA support order does not nullify or supersede the original support order, and arrearages will continue to accumulate under that order. Further, it then follows that the trial court did commit error by determining that the Summit County, Ohio, court’s order should be given full faith and credit. Therefore, the decision of the trial court is hereby reversed, and the case is remanded for further proceedings consistent with this opinion.

       It should be noted that while Arkansas adopted the Uniform Interstate Family Support Act (UIFSA) in March of 1993, Ohio did not adopt UIFSA until 1998. Therefore, the case remained a RURJESA action. The analysis of the case, however, would have been different if UIFSA had applied.


author: Tom Glaze, Justice

text:
    DUGAL LOGGING, INC.; Meshell Timber Company, Inc.; LTM Chips, Inc.; Anthony Forest Prods. Co.; and Riverwood International U.S.A., Inc. v. ARKANSAS PULPWOOD CO., Inc.
    98-973
    984 S.W.2d 410
    Supreme Court of Arkansas
    Opinion delivered January 14, 1999

      Gary D. McDonald, for appellant Dugal Logging, Inc.

      Henry C. Kinslow, for appellant Meshell Timber Co.

      Boswell, Tucker & Brewster, by: Dennis J. Davis, for appellant LTM Chips, Inc.

      Hamilton & Hamilton, by James A. Hamilton, for appellant Riverwood International U.S.A., Inc.

      Harrell & Lindsey, P.A., by: Paul E. Lindsey, for appellees.
   Tom Glaze, Justice

This case involves an action for wrongful cutting, trespass, and conversion, and was properly filed in the court of appeals. However, one of the appellants, Riverwood International U.S.A., Inc., moved to dismiss the appeal because appellants Dugal Logging Company, Inc. and LTM Chips, Inc. failed to file a proper motion to extend the time to lodge the transcript with the Supreme Court Clerk’s office. Based upon its contention that no extension was properly obtained, Riverwood argued to the court of appeals that the appeals, both direct and cross, should be dismissed. The court of appeals denied Riverwood’s dismissal motion, but subsequently certified the case to us because the court of appeals’ dismissal ruling involved an interpretation of Rule 5 of the Arkansas Rules of Appellate Procedure — Civil. We accepted jurisdiction to decide this appellate-rule issue only. Dugal Logging, et al. v. Arkansas Pulpwood Company, Inc., et al., 335 Ark. 546, 983 S.W.2d 126 (1998).

We first offer an abbreviated rendition of those facts needed to determine whether the appellants, particularly Dugal Logging and LTM Chips, failed to tender a timely record. After a trial on all issues on January 16, 1998, the Union County Circuit Court entered a judgment in favor of the landowners and assigns, the McHaney heirs and Arkansas Pulpwood Company, Inc. In sum, the trial court found that Arkansas Timber Corporation, Inc., which had contracted with Dugal Logging to cut timber on the McHaney property, did not have any title or claim to the timber when it was cut and sold. The circuit court further determined that Dugal Logging had trespassed on the property and converted the timber in question and that appellants Riverwood, Anthony Forest Products Company, and LTM were jointly liable with Dugal Logging for the conversion because they, as mills, bought the timber from Dugal Logging. Appellant Meshell Timber Company, Inc. was also found jointly liable because of timber delivered under its contract with Riverwood. The trial court awarded relief on cross claims the appellants alleged against one another, but for purposes of our limited review, we need not delve into those claims or the detail of other judgments or directives set out in the circuit court’s January 16, 1998 judgment.

The appellants, Dugal Logging, Meshell Timber, LTM Chips, Anthony Forest, and Riverwood each filed notices of appeals and amended notices of appeals, but the relevant first three notices were filed on February 17, 1998, by Meshell, LTM Chips, Anthony Forest, and Riverwood. Thus, in accordance with Ark. R. App. P. — Civil 5(a), appellants were required to file their record with this court’s clerk within ninety days from the filing of the first notice of appeal. In this situation, the ninety-day period would have ended on May 18, 1998, unless appellants obtained a timely extension. Pursuant to subsection b of Rule 5, in cases where there has been designated for inclusion any evidence or proceeding at the trial or hearing which was stenographically reported, the trial court, upon finding that a reporter’s transcript of such evidence or proceeding has been ordered by appellant(s), and upon a further finding that an extension is necessary, may extend the time for filing the record on appeal, but the order of extension must be entered before the expiration of the period for filing as originally prescribed or extended by a previous order. The trial court can in no event extend the time more than seven months from the date of entry of the judgment.

In the instant appeal, Dugal Logging, on April 15, 1998, made an oral motion to extend the time for the filing of the record; that motion was granted by the trial court. The trial court extended the time until August 16, 1998, or seven months from the date of entry of the trial court’s January 16, 1998 judgment. On May 13, 1998, LTM Chips filed a written motion for extension of time to lodge the record, and the trial court also granted this motion, directing the record to be filed on or before August 16, 1998. The record was filed and accepted by the clerk’s office on August 10, 1998.

Riverwood argues that Dugal Logging’s and LTM Chips’s extensions were granted erroneously because the trial court did not first conduct an evidentiary hearing. Riverwood submits that Rule 5(b) requires such a hearing and that afterwards the trial court must then make a specific finding that an extension is necessary and a transcript has been ordered. Riverwood cites several cases in support of its argument. See Jacobs v. State, 321 Ark. 561, 906 S.W.2d 670 (1995); Alexander, Clerk v. Beaumont, Judge, 275 Ark. 357, 629 S.W.2d 300 (1982); Harper v. State, 262 Ark. 294, 556 S.W.2d 142 (1977); see also West v. State, 322 Ark. 114, 907 S.W.2d 133 (1995). We do not address Riverwood’s contention because its motion to dismiss was not timely filed. If Riverwood had a serious question as to whether a hearing was required for Dugal Logging or LTM Chips to show that a record had been ordered and an extension was necessary, it should have raised the issue before the record was filed with this court’s clerk.

In Green v. Williford, 331 Ark. 533, 961 S.W.2d 766 (1998), we dealt with a comparable situation, which concerned Green’s noncompliance with Arkansas Rule of Appellate Procedure — Civil 3(e) when he filed his notice of appeal without a statement that financial arrangements had been made with the court reporter. Williford moved to dismiss Green’s appeal because Rule 3(e) provides that a notice of appeal is invalid if it does not include the financial-arrangement language. This court denied Williford’s motion to dismiss by pointing out that a notice of appeal may be invalid for failure to include the relevant statement, but that the omission of such language does not render the notice automatically void. 331 Ark. at 535, 961 S.W.2d at 767-768. Rather, the court held such an omission made it voidable until annulled. Id. This court further concluded that such an omission will not be fatal to the appeal if the record, including the trial transcript, has been lodged with the clerk in a timely manner. The court said that, prior to an appellant’s lodging of the record on appeal, a challenge to the appeal may be made by filing a motion to dismiss the appeal accompanied by a partial record. See also Quality Fixtures, Inc. v. Multi-Purpose Facilities Bd., 334 Ark. 209, 970 S.W.2d 815 (1998); Clayton v. Ideal Chem. & Supply Co., 335 Ark. 73, 977 S.W.2d 228 (1998).

The Green rationale and holding is applicable here. Riverwood waited until after the appellants filed their record with this court’s clerk before Riverwood decided to contest either Dugal Logging’s or LTM Chips’s motion for extension. Instead, the appellants filed their record on August 10, 1998, which was six days before the seven-month extension period expired. As noted above, if Riverwood had serious doubts about whether the appellants had ordered a record or needed additional time to file a transcript, Riverwood should have filed its dismissal motion long before the appellants filed their record with this court.

For the reasons above, we deny Riverwood’s motion to dismiss, and reassign this case to the court of appeals to decide the remaining issues.

       Anthony Forest and Riverwood joined in filing a notice of appeal. There were actually eleven notices and amended notices of appeals in an effort by appellants to comply with the requirements of Arkansas Rules of Appellate Procedure — Civil 3 and 5. For example, some of the original notices of appeal did not contain language reflecting the requirement that financial arrangements for the record had been made with the court reporter.

       Rule 5(b) also deals with time schedules where timely post-judgment motions are filed, but those provisions are not apposite here.

       We acknowledge the fact that Dugal filed a motion to amend the judgment which was denied on February 13, 1998. While, under Ark. R. App. P. — Civil 5(b), the time should have been extended to September 14, 1998, this fact, as explained, is not critical to our determination of this matter.


author: Donald L. Corbin, Justice

text:
    Robert Harrold KINKEAD and Joyce Kinkead v. Carol Ann Kinkead SPILLERS and Jeannine Lea Kinkead Mathis; Boatmen’s National Bank of Arkansas, Intervenor
    98-618
    983 S.W.2d 425
    Supreme Court of Arkansas
    Opinion delivered January 14, 1999

      Joyce Kinkead, pro se, for appellants.

      Kemp, Duckett, Spradley & Curry, by: Hal Joseph Kemp, for appellees.
   Donald L. Corbin, Justice

Appellants Robert and Joyce Joyce Kinkead appeal the judgment of the Pulaski County Chancery Court ordering a partition sale of land previously owned by Appellant Robert Kinkead and Appellees Carol Ann Kinkead Spillers and Jeannine Lea Kinkead Mathis. Appellants raise three points on appeal: (1) the chancery court lacked subject-matter jurisdiction to order partition due to adverse possession of part of the land; (2) the sales price of the land was grossly inadequate; and (3) the costs of a second survey should not have been imposed upon Appellants pursuant to Ark. Code Ann. § 18-60-418 (1987). Our jurisdiction of this appeal is pursuant to Ark. Sup. Ct. R. 1-2(a)(7), as this is the second appeal of this case. We reverse the order of partition.

Facts and Procedural History

Appellant Robert Kinkead and Appellees Carol Kinkead Spillers and Jeannine Kinkead Mathis owned real property in Pulaski County as tenants in common. Appellant Joyce Kinkead owned a dower interest in the undivided interest of her husband Robert Kinkead. Appellees, plaintiffs in the proceedings below, filed a petition to partition the land in September 1994, stating that they and Robert Kinkead were joint owners of the property in question via special warranty deed and the will of Harrold F. Kinkead; that the property was not capable of being divided in kind; and that the property should be sold with the proceeds of the sale to be divided according to the respective interests of the parties: one-quarter (1/4) to Robert Kinkead and Joyce Kinkead; three-eighths (3/8) to Carol Kinkead Spillers; and three-eighths (3/8) to Jeannine Kinkead Stroud. The property was described in the special warranty deed as follows:

Sl/2 of the NW1/4 of the NW1/4, Section 35, Township 3 North, Range 14 West containing 20 acres more or less.
The South 15 acres of the NE1/4 of the NW1/4. Section 35, Township 3 North, Range 14 West containing 5 acres more or less.
Tracts 12 and 13, Kinkead, Dunn & Mainard’s Subdivision of Part of Section 35, Township 3 North, Range 14 West Tract 12 containing 11.5 acres more or less and Tract 13 containing 10 acres more or less. With the total of the above described property in the aggregate 46.5 acres more or less.
LESS AND EXCEPT any of the above described property lying to the east of the centerline of a railroad right-of-way traversing Section 35, Township 3 North, Range 14 West it being the intent of the Grantors to convey all their interest in property owned by them and having been previously owned by Ewing L. Kinkead lying west of the centerline of said railroad right-of-way.

On May 12, 1995, the chancellor issued an order, pursuant to Ark. Code Ann. § 18-60-414 (1987), appointing three persons as commissioners and directing them to examine the property and file a report recommending that the property be divided according to the shares owned by the parties or, if such division is not possible, that the property be sold pursuant to Ark. Code Ann. § 18-60-420 (1987). On September 22, 1995, the commissioners’ report was sent to the chancellor, indicating that the property could not be partitioned in kind. In an order filed on December 27, 1995, the chancellor confirmed the commissioners’ report that the property could not be divided in kind and, thus, ordered the property sold. Appellees submitted the highest bid on the property, $155,000, and the property was sold to them. On May 31, 1996, the chancellor received the commissioners’ report of the sale of the property and entered an order confirming the sale and finding that the sale was in all respects proper and legal and that the sum bid for the property was adequate. The chancellor directed that a commissioners’ deed be executed and delivered to the purchasers, conveying the property to them.

Also on May 31, 1996, Boatmen’s National Bank of Arkansas filed a motion to intervene in the action on the ground that it had a judgment lien on all real property owned by Appellants in Pulaski County, including the property that was the subject of the partition. That intervention was the subject of the first appeal to this court, wherein we dismissed the appeal without prejudice for lack of a final order, pursuant to ARCP Rule 54(b). See Kinkead v. Spillers, 327 Ark. 552, 940 S.W.2d 437 (1997). Subsequently, we ordered the chancellor to enter a final order so that Appellants may perfect their appeal. See Kinkead v. Spillers, 330 Ark. 711, 955 S.W.2d 909 (1997) (per curiam). The chancellor entered the final order in this matter on February 3, 1998, and this appeal followed.

Subject-Matter Jurisdiction

Appellants argue that the chancery court lacked subject-matter jurisdiction to order partition of the land because there was evidence that at least some of the land was being adversely possessed. They contend that the legal description contained in the special warranty deed and reflected on the survey is one contiguous parcel, and that it is uncontroverted that a portion of the property, the exact number of acres being unknown, is in the possession of others and possibly held adversely. They argue that the chancellor thus lacked jurisdiction to order partition of the property until legal title could be established.

The record reflects that on March 22, 1995, the chancellor conducted a hearing to determine whether the land was capable of being divided in kind. Appellants challenged the integrity of Appellees’ survey on the ground that a portion of the land described in the deed, the land north of Maple Street, was omitted from the survey. In response, Appellees’ attorney concéded that the evidence would show that there is a dispute concerning ownership of the property north of Maple Street, where there were occupied houses. Counsel stated that the property was not included in the survey “because it was clear those houses have been there for years and years.” Appellee Carol Kinkead Spillers confirmed this notion, stating that she was not claiming any property that lies across Maple Street because it was her belief that she did not own that property.

The surveyor, Edward Fryar, testified that there were numerous homes on that area of the property that have been there for a long time. Fryar stated:

These are old houses. And these people, without a doubt, have a claim to that, and I don’t — I can’t answer for all of them — I don’t know how many house[s] are over there; there must be a half a dozen or so.

Fryar stated that it was evident to him that the land was claimed and used by other people. He added, however, that he did not know whether the land was owned by them or by the Kinkeads. Similarly, real estate agent Sam Guenther testified that in the area in question, there were homes that had been there for a long time — one built within the last ten years, and others built within the last five years.

Despite the testimony that part of the property was likely held adversely, the chancellor appointed commissioners to evaluate for partition the entire property, as described in the deed, including that possibly being possessed adversely. The commissioners’ report, which ultimately recommended that the property be sold at judicial auction, supports the foregoing testimony:

1) The property, according to the description submitted to us, contained 46.5 acres. Upon plotting the description on property maps obtained from the county Assessor’s Office, we found that part of the described property actually included a portion of the platted Natural Steps Subdivision as well as several existing single-family homes which are owned and occupied by people other than those involved in this court action. [Emphasis added.]

Again, despite this evidence, the chancellor ordered that the entire property be sold at auction. The chancellor reasoned:

Let me put it this way: I don’t think the fact that part of the land is adversely possessed would have any effect on the ability to partition it. Now, if it were all adversely affected that might be otherwise. The issue I think then becomes, what do you do about the adverse possession, and I guess my thought would be that I’m not sure you would do anything. I think you maybe put it up for sale and let the buyers, you know, buy what the owners have to transfer and worry themselves about any adverse possession, especially since, while I gather from the papers I have seen that there’s a fair amount of agreement about where this adversely possessed land is, I still don’t know, you know, that this Court would have jurisdiction without showing all those on it to actually quiet title and say specifically what are the legal descriptions of the pieces that are adversely possessed. . . .
I have to admit that the adverse possession is somewhat troublesome. But I tend to believe that I’m going to go ahead and partition what’s in the bidding, and anyone who purchases it at a sale purchases it subject to what actually is owned. [Emphasis added.]

During a subsequent hearing, on July 16, 1996, the chancellor explained that partition was proper in this case because only a part of the land was possibly adversely held:

I don’t think there’s any doubt that [Appellant Joyce Kinkead is] right on the law, that if a piece of property is held adversely that it cannot be partitioned. On the other hand, the particular circumstances we have in this case, which is that the property is not entirely held in adverse possession.

Appellants contend that the chancellor’s ruling was clearly erroneous under this court’s holdings that partition may not be had when the land is adversely possessed or when title thereto is in dispute. They assert that the appropriate way to resolve the title dispute is through an action in ejectment, and that the chancery court has no jurisdiction to hear an ejectment claim.

We agree with Appellants that it is a well-settled principle that “partition can not be had of lands held adversely or the title to which is in dispute.” Cannon v. Stevens, 88 Ark. 610, 612, 115 S.W. 388, 388-89 (1908) (citing Eagle v. Franklin, 71 Ark. 544, 75 S.W. 1093 (1903); Head v. Phillips, 70 Ark. 432, 68 S.W. 878 (1902); Ashley v. Little Rock, 56 Ark. 391, 19 S.W. 1058 (1892); Criscoe v. Hambrick, 47 Ark. 235, 1 S.W. 150 (1886); Moore v. Gordon, 44 Ark. 334 (1884); London v. Overby, 40 Ark. 155 (1882); Byers v. Danley, 27 Ark. 77 (1871)). We also agree that an action for ejectment lies in law. Schwarz v. Colonial Mortgage Co., 326 Ark. 455, 931 S.W.2d 763 (1996).

We do not agree, however, that resolution of the title dispute in this case necessarily mandates transfer to the circuit court for a determination of any adverse claims through ejectment. The matter of adverse possession must be proved; mere possession is not enough. Here, there appears to be no dispute that there are people other than the parties to this partition suit living on the land north of Maple Street. Yet, there is an issue about whether those people have a legal claim to part of the land based on their holding the property adversely. As this court stated in Cannon, 88 Ark. at 613, “Merely setting [an adverse-possession defense] forth in the answer did not defeat the jurisdiction of the court.” Thus, until such time as evidence of adverse possession is presented, a transfer to circuit court on a theory of ejectment is premature, as the legitimacy of any potential claim is pure speculation.

Our partition statutes contemplate that persons with any interest in the property be joined as parties to the partition suit. Ark. Code Ann. §§ 18-60-401 to -426 (1987 & Supp. 1997). Section 18-60-401 provides that after a petition for partition has been filed, “all persons interested in the property who have not united in the petition shall be summoned to appear.” Similarly, section 18-60-403 (a) provides that every person having an interest in the partition, as provided in section 18-60-401, “whether in possession or otherwise,” shall be made a party to the petition.

In the instant case, the statutory requirement for joinder of all interested parties was not met. Accordingly, we reverse the order of partition and remand the case with instructions that the chancellor require joinder of those people living north of Maple Street as parties so that any claims they may have to the property can be developed. If it should develop that any of those joined parties are holding the land adversely to the cotenants, then a transfer to circuit court for an ejectment action would be appropriate. See Head, 70 Ark. 432, 68 S.W. 878.

Reversed and remanded.

Smith, J., not participating.