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

text:
    Brenton R. PIERCY v. WAL-MART STORES, INC.
    92-717
    844 S.W.2d 337
    Supreme Court of Arkansas
    Opinion delivered January 11, 1993
    [Supplemental Opinion on Denial of Rehearing February 22, 1993.]

      Sam Sexton III, for appellant.

      Daily, West, Core, Coffman & Canfield, by: Robert W. Bishop, for appellee.

      Dudley, J., not participating.

   Robert L. Brown, Justice.

The appellant, Brenton R. Piercy, raises multiple points for reversal of a jury verdict in favor of the appellee, Wal-Mart Stores, Inc. The points for reversal are meritless, and we affirm.

On October 10, 1988, Piercy claimed that he tripped on a bulge which was several inches high in an unsecured rug-mat at the entrance of a Wal-Mart store in Fort Smith. The mat, he testified, had been pushed up against a door through which customers passed in single file to enter the store. Because his father was directly in front of him, Piercy asserted, he could not see the mat and consequently tripped on it and fell on his left knee. He did not immediately report the injury because at first he did not believe that he had been injured. That night, he went to work and later testified that his leg hurt during his shift. He stated that he thought he had suffered a hamstring injury.

The pain became progressively worse, and on October 19, 1988, Piercy went to see his regular physician, Dr. Ronald P. Robinson, who referred him to Dr. Stephen A. Heim, an orthopedic surgeon. Dr. Heim fitted Piercy with a full-length cast that covered the back of his leg. At this point, he had still not notified Wal-Mart of his injury.

When his leg did not improve, Piercy returned to Dr. Heim, who changed the cast and placed his leg in a brace. He remained in the brace for about two weeks, and his leg showed no sign of improvement. During this period, he testified that he “was in considerable pain” and was unable to walk on the leg and therefore was confined to a wheelchair. On November 7, 1988, Piercy went to see Dr. Douglas W. Parker, Jr., a second orthopedic surgeon, who examined him for five successive days. On the fifth day, Dr. Parker evaluated the leg and returned Piercy to his regular physician, Dr. Robinson, due to the infection. Dr. Robinson then called in a surgeon, a Dr. Hunton, who promptly sent him to St. Edward Mercy Medical Center in Ft. Smith to have his leg drained.

An operation was performed on Piercy’s leg, and he remained in the hospital for eighteen days, spending part of that time in the intensive-care unit. He testified that, when he was dismissed, the “leg was not any better,” and he required physical therapy. Six to eight weeks later, he was able to get up and walk with the assistance of a walker. From that, he progressed to crutches and, eventually, a cane, which he used for about a year- and-one-half. He stated that he still experiences pain and has a limp.

Piercy sued Wal-Mart for damages on grounds that the mat at the entrance had been negligently maintained and that this caused the accident. At trial, Wal-Mart denied any knowledge of the accident prior to a report by Piercy’s father and presented proof that Piercy suffered from diabetes and had a history of various infections. Two days following a jury verdict in favor of Wal-Mart, Piercy’s attorney made a shopping trip to the WalMart store in question and observed that the mats at the entrance had been taped down. Piercy then moved for a new trial, asserting that the taping of the mats constituted newly discovered evidence. The circuit court denied the motion.

I. FAILURE TO GRANT NEW TRIAL MOTION

At trial, Wal-Mart presented considerable testimony on its internal safety procedures. As part of this defense, Wal-Mart’s store manager, Roger Trover, responded to a question on direct examination about taping the entrance mats down:

Well, actually, from a safety standpoint, from my perception, that would cause more of a risk than if they weren’t taped down, because the tape could roll up or it could come unstuck or whatever, and represent more of a trip hazard than the mat, itself, would.

Because two days after the trial the mats were taped down at the store entrance, Piercy wants to use this information to impeach Wal-Mart personnel and urges that the circuit court abused its discretion in refusing a new trial based on newly discovered evidence.

We do not agree. Rule 59(a)(7) of the Arkansas Rules of Civil Procedure states that a new trial may be granted because of “newly discovered evidence material for the party applying, which he could not, with reasonable diligence, have discovered and produced at the trial. . .” A new trial based on newly discovered evidence, however, is not a favored remedy. National Bank of Commerce v. Beavers, 304 Ark. 81, 802 S.W.2d 132 (1991). Whether to grant a motion for new trial based on newly discovered evidence is within the sound discretion of the trial court, whose decision will not be reversed absent an abuse of that discretion. Liggett v. Church of Nazarene, 291 Ark. 298, 724 S.W.2d 170 (1987). When a trial court denies a motion for a new trial, the test is whether the verdict is supported by substantial evidence, giving the verdict the benefit of all reasonable inferences permissible under the proof. Isbell v. Ed Ball Const. Co., 310 Ark. 81, 833 S.W.2d 370 (1992); Scott v. McClain, 296 Ark. 527, 758 S.W.2d 409 (1988).

We have held that in a hearing on a motion for a new trial based on newly discovered evidence, the burden is on the movant to establish that he could not with reasonable diligence have discovered and produced the evidence at the time of the trial, that the evidence is not merely impeaching or cumulative, and that the additional testimony would probably have changed the result of the trial. See Rogers v. Frank Lyon Co., 253 Ark. 856, 489 S.W.2d 506 (1973); see also E.E.O.C. v. Rath Packing Co., 787 F.2d 318 (8thCir. 1986); Chemical Delinting Co. v. Jackson, 193 F.2d 123 (5th Cir. 1951); 6A Moore’s Federal Practice, § 59.08[3], pp. 59-103 - 59-104 (1987); 11 Wright & Miller, Federal Practice and Procedure: Civil § 2808, p. 60 (1973).

Using these standards, the proof in question before us fails primarily for one reason. Piercy admits that he wants to use the new evidence to “totally impeach Wal-Mart’s manager.” The fact that new information has been discovered which might merely impeach or otherwise test the credibility of a witness is not a sufficient reason to warrant a new trial. There was no abuse of discretion in the circuit court’s ruling.

II. THE ‘GOLDEN RULE.’

During Wal-Mart’s closing argument, the defense counsel stated:

All of [us] have a duty of care for our own safety, ordinary care. You can’t just ignore the fact that you’re approaching a curb or you’re approaching some steps or you’re approaching a doorway, that has a rug on the other side of it. You can’t ignore that. You’re duty bound to watch out where you’re going and not be tripping and so forth. Now, the same standard of care applies to me as it does to WalMart, and to you as it does to Wal-Mart. Now, what if somebody comes in your home and you’ve got a rug, there, a throw rug, we call them, at the door, maybe you’ve got an entryway through your garage or patio or whatever, and you’ve got a throw rug, there, for them to clean off their feet, before they come in on the good carpet. If some fellow comes in there and —

At that point, Piercy’s attorney interrupted and urged that this violated the golden rule doctrine:

Judge, this violates what is called the Golden Rule. He’s trying to put the Jury into Wal-Mart’s position, and that is not allowed in (the) province of law.

Following additional statements by counsel at a sidebar conference, the court admonished the jury:

Ladies and Gentlemen, the attorneys can draw what they feel are reasonable inferences from the testimony; what they say is not evidence, what they say is merely argument, how they interpret the evidence. You should remember the facts as you remember them. The attorneys have the right to try to persuade you to be — to go their way, but it’s ultimately up to you as to what you believe to be the facts or don’t believe to be the facts.

There was no objection by Piercy’s attorney to this admonishment.

We question whether Piercy actually objected formally to Wal-Mart’s closing argument, though he did voice his misgivings about it. Furthermore, Piercy did not object at all to the court’s admonition to the jury. But, in addition to these procedural lapses, we do not believe that reversible error occurred. We have previously defined the golden rule doctrine:

A golden rule argument suggests to jurors that they place themselves in the position of a party. (Citation omitted.) An example of such an argument is, “Would you take $15,000 for your father’s life?” (Citation omitted.) Or, conversely, “How would you like to have $ 15,000 taken out of your pocket?”

Smith v. Pettit, 300 Ark. 245, 248, 778 S.W.2d 616, 618 (1989). Based on this definition, Wal-Mart’s counsel was perilously close to consummating a golden rule argument when Piercy’s counsel cut him off.

A comment apposite to this case appears in one of our previous cases:

We have recognized the impropriety of a golden-rule argument such as counsel’s urging the jurors to award what they themselves would take for the life of their father or husband or wife. (Citation omitted.) Here, however, the argument was cut off after counsel had merely said that he thought the jurors were going to have to put themselves in the plaintiff s shoes. That bare remark falls decidedly short of being reversible error.

Collection Consultants, Inc. v. Bemel, 274 Ark. 223, 226, 623 S.W.2d 518, 520 (1981).

Similarly, in the present case, counsel for Piercy halted WalMart’s allusion to the jurors’ personal experiences in midstream. As in Bemel, the argument of Wal-Mart’s attorney falls short of reversible error.

III. ORDER OF TRIAL

Piercy further claims that the circuit court allowed WalMart to present its case-in-chief during Piercy’s own case-in-chief and that this action violated Ark. Code Ann. § 16-64-110 (1987), which governs the order of trial. The issue arose when Wal-Mart requested, after the noon recess, that the circuit court allow it to recall Piercy for several additional questions on cross-examination while Piercy was still putting on his case. Piercy’s counsel objected to this, and the circuit court overruled the objection.

Trial courts are endowed with authority to exercise reasonable control over the order of interrogating witnesses. Ark. R. Evid. 611(a). We have held that Rule 611(a) vests considerable discretion in the trial court in the regulation of the mode and order of interrogating the witnesses and presenting evidence. Freeman v. Anderson, 279 Ark. 282, 285, 651 S.W.2d 450, 452 (1983). In Freeman, we found no abuse of discretion when the trial court allowed a police officer to return to the witness stand after having been excused and released from the witness rule so that he could testify about his qualifications to estimate the repair cost to an automobile. The same holds true in this case. There was no abuse of discretion.

IV. HEARSAY OPINION

Piercy contends that he was required to testify that one of his physicians, a Dr. Holmes, told him in 1989 that he should not have any trouble walking on the injured leg. He urges that the admission of this hearsay was a blatant violation of Ark. R. Evid. 801 and that there is no applicable exception under Ark. R. Evid. 803.

Wal-Mart counters that the purpose of the question about Dr. Holmes’s evaluation related to Piercy’s motive for seeking a second opinion before the trial from Dr. Douglas Parker, whom he had not seen in two-and-one-half years. Dr. Holmes had told Piercy that he should not have difficulty walking on the leg “later on.” Piercy then sought a second opinion, which he testified to on cross-examination:

Q: Now, did your going back to Dr. Parker in 1991, did that have anything to do with this lawsuit being set for trial?
A: Yes, sir, it did.
Q: So, because this lawsuit was set for trial, you went back to see Dr. Parker?
A: Yes, sir, my attorney requested that I get another leg evaluation.

The circuit court did not err in overruling Piercy’s objection on hearsay grounds. The fact that Dr. Holmes advised Piercy that he would be able to walk on the leg was offered on cross-examination to prove why Piercy sought a second opinion from Dr. Parker prior to trial. As such, it was not offered, according to Wal-Mart, to prove that Piercy could walk in the future, but rather to show why he went to Dr. Parker. Statements proving motive are not excluded by the hearsay rule. Ark. R. Evid. 803(3); see also Tandy Corp. v. Bone, 283 Ark. 399, 678 S.W.2d 312 (1984). This ruling was discretionary with the circuit court, and that discretion was not abused.

V. RESPONSES TO INTERROGATORIES

Piercy also contends that the circuit court erred in not allowing him to introduce certain responses to interrogatories by Wal-Mart. Piercy’s Interrogatory 5 asked whether any persons had slipped on mats at the Wal-Mart store in question over the past five years and Interrogatory 11 asked if any persons had fallen on mats at any Wal-Mart stores. Wal-Mart responded to both interrogatories by objecting to them as overly broad, burdensome, irrelevant, and not likely to lead to admissible evidence. Piercy sought to present these objections to the jury, and Wal-Mart objected on relevancy grounds. The circuit court sustained Wal-Mart’s objection.

We observe no abuse of discretion in the court’s ruling. Piercy would have us believe that Wal-Mart’s objections to these interrogatories was an admission of sorts but cites us to no authority supporting his position. We do not agree. Wal-Mart was perfectly within its rights to object to any interrogatory. If the objection was unreasonable or without basis, then Piercy’s remedy was to move to compel a response.

Piercy is correct that, under Ark. R. Civ. P. 33, answers to interrogatories may be used to the extent permitted by the rules of evidence. However, objections to interrogatories are not answers. The circuit court correctly sustained Wal-Mart’s objection at trial.

Piercy further attempted to introduce into evidence answers to other interrogatories such as answers to Interrogatories 19 and 20 relating to the positioning and cleaning of the mats at the store entrance. Answers to interrogatories are hearsay and generally are inadmissible as part of a party’s case-in-chief. See Hunter v. McDaniel Bros. Constr. Co., 274 Ark. 178, 623 S.W.2d 196 (1981). Nevertheless, such answers may be admissible to impeach the answering party. Here, however, no attempt was made by Piercy to impeach Wal-Mart personnel at trial. The circuit court correctly refused to allow the answers to Piercy’s interrogatories into evidence.

VI. ADDITIONAL MEDICAL TREATMENT

For his sixth point, Piercy argues that evidence was admitted of twelve instances of his hospitalization, before and after the Wal-Mart accident, and that this was prejudicial and irrelevant. He cites us to the following principle:

[W]hen a defendant’s negligence aggravates, or brings into activity, a dormant or diseased condition or one to which the injured person is predisposed, the defendant is liable to the injured person for the full amount of the damages which ensue, notwithstanding such diseased or weakened condition.

Owen v. Dix, 210 Ark. 562, 196 S.W.2d 913, 915 (1946).

This is a correct statement of the law. However, the issue here, unlike the Dix case, is whether the twelve hospitalizations were at all relevant to the trial. The circuit court found that they were, and we cannot say that this ruling was error.

Piercy had a preexisting diabetic condition, and Wal-Mart argues that a diabetic condition for which Piercy was hospitalized correlates directly with poor eyesight due to cataracts and Piercy’s resulting fall. It further contends that Piercy had been hospitalized for various infectious conditions such as cellulitis, and this evidences a susceptibility to infection such as that which afflicted Piercy’s leg. Certainly, medical history which relates to the cause of an alleged accident or to resulting injury is relevant information for the jury to assess.

Rulings on the relevancy of evidence are discretionary with the trial court and are not to be reversed absent an abuse of discretion. Jim Halsey Co. v. Bonar, 284 Ark. 461, 683 S.W.2d 898 (1985). Given the apparent relevance of the medical records, it is difficult to conclude that the court abused its discretion.

VII. SPECULATIVE QUESTIONING

Piercy was asked on direct examination: . .[I]f that carpet, that piece of rug, had been flat at Wal-Mart that day, would you have tripped over it?” Wal-Mart promptly objected to the “speculation,” and the court sustained the objection and added that it was interested only in knowing what the facts were.

We do not agree with Piercy that he could answer this question as a lay expert under Ark. R. Evid. 701. Rule 701 provides for opinion testimony rationally based on the perception of the witness. In this case, Piercy testified that the mat was not flat but had been pushed up to the door. Hence, the question was hypothetical and did not pertain to the circumstances which, Piercy contended, caused the accident.

While allowing Piercy to testify that he would not have tripped over a flat mat seems relatively innocuous to us, we cannot say that the circuit court’s disallowance of this testimony was error or an abuse of discretion. Had Piercy responded negatively to the question, instead of being helpful to the jury, this would have fallen more readily into the category of a meaningless assertion. See Felty v. State, 306 Ark. 634, 816 S.W.2d 872 (1991).

Affirmed.

Dudley, J., not participating.

Sam Sexton III, for appellant.

Daily, West, Core, Coffman & Canfield, by; Robert W. Bishop, for appellee. ’

SUPPLEMENTAL OPINION ON DENIAL OF REHEARING FEBRUARY 22, 1993

Robert L. Brown, Justice.

Petitioner Brenton R. Piercy raises several points on rehearing. The petition is denied but additional comment on the use of answers to interrogatories at trial is required.

We stated in our opinion that answers to interrogatories are generally inadmissible as hearsay in a party’s case-in-chief, though they may be used for impeachment purposes, and we cited Hunter v. McDaniel Bros. Constr. Co., 274 Ark. 178, 623 S.W.2d 196 (1981) for the proposition. That statement is only partially correct. Answers to interrogatories may qualify as admissions by a party-opponent which are not hearsay, as defined, and therefore may constitute substantive evidence and be admissible in a party’s case-in-chief. Ark. R. Evid. 801 (d)(2). If an objection to such answers is raised on foundational or other grounds, it then becomes a matter for the trial court’s discretion. Answers to interrogatories are also admissible for consideration in summary judgment proceedings. Ark. R. Civ. P. 56(c).

In the present case, the circuit court denied admission of all answers to interrogatories as part of Piercy’s case-in-chief on grounds of irrelevancy. On appeal, Piercy contends that answers to interrogatories 19 and 20 were relevant and constituted admissions under Rule 801 (d)(2). That precise rule of evidence was not argued to the circuit court; nor were the two answers to interrogatories 19 and 20 specifically brought to the court’s attention. Moreover, Wal-Mart’s store manager, Roger Trover, who verified the answers, was called as a witness by Piercy. However, no attempt was made by Piercy to impeach Trover with the answers. Under the circumstances, the circuit court did not abuse its discretion in refusing to admit the answers to interrogatories into evidence.

Dudley, J., not participating.


source: Caselaw Access Project

author: Robert L. Brown, Justice. Tom Glaze, Justice,

license: Public Domain

text:
    Ripple Wayne SUTTON v. STATE of Arkansas
    CR 92-347
    844 S.W.2d 350
    Supreme Court of Arkansas
    Opinion delivered January 11, 1993

      Val P. Price, for appellant.

      Winston Bryant, Att’y Gen., by: J. Brent Standridge, Asst. Att’y Gen., for appellee.
   Robert L. Brown, Justice.

The appellant, Ripple Wayne Sutton, raises numerous issues on appeal. One of these issues has merit — the circuit court’s failure to sever the charge for a felon in possession of a weapon for trial purposes. We reverse on that point and remand for a new trial.

On August 13, 1990, Lyle Boliou was murdered. His body was found in a pickup truck parked by an offshoot of the St. Francis River near Paragould. He had three gunshot wounds to the back of the head. On December 10,1990, Sutton was arrested on a felon/firearm charge, the firearm being a .22 caliber pistol. Sutton had been convicted of grand larceny in 1974. Six months later, on May 6, 1991, he was arrested for the murder of Boliou and subsequently charged with first-degree murder. At the time, Kathy Riggsbee, who was an eyewitness to the shooting and who had been charged with hindering the apprehension of Sutton, was also under suspicion as an accomplice to the murder. She told investigating authorities that Sutton was the culprit.

The two charges, felon/firearm and first-degree murder, were then consolidated for trial. On August 19,1991, which wasa week before trial, Sutton orally moved the trial court to sever the two charges so that the murder charge could be tried first. Sutton’s counsel advised the court that he would be filing a written motion before trial. He did so on the day of the trial, August 26, 1991, and the motion was denied. The court’s stated reason for denying the motion was that the two offenses joined were part of a single scheme and plan, which eliminated grounds for severance under Ark. R. Crim. P. 22.2(a). Sutton further moved in limine to exclude cross-examination on his felony conviction because it was more than ten years old. That motion, too, was denied.

The trial took place over three days. A certified copy of Sutton’s 1974 conviction for grand larceny was introduced as part of the state’s case-in-chief. No additional objection was made to the felony conviction at time of introduction. At the end of the trial, the jury was instructed that the conviction could only be considered for credibility purposes. Sutton was convicted on both charges and sentenced to life imprisonment on the murder charge and six years on the weapon charge, with the sentences to be served consecutively.

I. JOINDER OF THE FELON/FIREARM CHARGE

In the last year and a half, we have examined the prejudicial impact that occurs when a felon/firearm charge is combined with a murder charge for trial on two occasions. Sullinger v. State, 310 Ark. 690, 840 S.W.2d 797 (1992); Ferrell v. State, 305 Ark. 511, 810 S.W.2d 297 (1991). In each instance, we affirmed the conviction and judgment, though we held that the trial court had erred in failing to sever the charges for trial. We did so, based on what amounted to a harmless error analysis. Though there was error, we held that the error was not prejudicial to the defendant because of the existence of one or more overriding factors, including: (1) the overwhelming evidence of guilt; (2) cross-examination of the defendant on the prior conviction; and (3) a limiting instruction to the jury.

In both Sullinger and Ferrell, we scrutinized the circumstances of the case in light of these factors and concluded that the joinder error was harmless, primarily due to overwhelming evidence of guilt and the fact that the defendant would have taken the stand in any event and been cross-examined about his felony conviction.

The state now urges us either to affirm Sutton’s conviction using the Sullinger and Ferrell analysis or on the basis of McEwen v. State, 302 Ark. 454, 790 S.W.2d 432 (1990). In McEwen, a felon/firearm charge and aggravated robbery charge were tried together and convictions for both resulted. Prejudice was argued on appeal due to the joinder, and we rejected the argument on the basis that severance was a matter discretionary with the trial judge. We noted that the judge’s discretion was not abused by the ruling in McEwen because it was premised on the fact that the same gun was used in both offenses and that severance would have meant two trials and a duplicative effort. We also observed in that case that the prior felony conviction could have been brought out on cross-examination and, thus, no prejudice resulted from the joinder.

We first consider in the case at hand whether Sutton’s motion to sever the murder and felon/firearm charges and his motion in limine to exclude the prior felony conviction preserved the issue for appeal without a further objection made at trial. We have held that raising an objection by pretrial motion without a corollary objection at trial is sufficient to preserve the issue for appeal, but failure to object at trial precludes the party from relying on anything disclosed at trial which was not brought out at the pretrial hearing. Rowe v. State, 271 Ark. 20, 607 S.W.2d 657 (1980), cert. denied 450 U.S. 1043 (1981) (pre-trial motion to suppress lineup identification which was denied preserved the issue without additional objection at trial); see also Ward v. State, 272 Ark. 99, 612 S.W.2d 118 (1981) (when a motion in limine is overruled, no further objection is needed). Here, Sutton moved to sever the charges and moved in limine on the prior conviction. Under these circumstances, an additional objection to the felony conviction at trial was not necessary.

In examining the approach taken to the joinder issue in other jurisdictions, we observe a wide range of solutions. Some jurisdictions have balanced judicial efficiency against prejudice to the defendant and denial of a fair trial under the Due Process Clause and held in favor of severance. See, e.g., State v. Cook, 673 S.W.2d 469 (Mo. App. 1984). The District of Columbia Court of Appeals, while noting that joinder may not always be an abuse of discretion, has held that a high level of care is necessary to avoid prejudice when a felon/firearm charge is joined for trial. U.S. v. Dockery, 955 F.2d 50 (D.C. Cir. 1992); but see United States v. Daniels, 770 F.2d 1111 (D.C. Cir. 1985) (district court did not abuse its discretion in denying severance). The D.C. Circuit in Dockery stated:

The primary concern is that prior crimes evidence “weigh[s] too much with the jury and . . .' overpersuade [s] them as to prejudge one with a bad general record and deny him a fair opportunity to defend against a particular charge.”

955 F.2d at 53; quoting Michelson v. United States, 335 U.S. 469, 476 (1948). The D.C. Circuit concluded that the defendant was prejudiced and looked to factors such as the government’s refusal to admit the prior conviction by stipulation rather than proof and the absence of a cautionary instruction on inferences to be drawn from the conviction as reasons for reversal.

The Ninth Circuit Court of Appeals had held in a case where evidence was sparse on the primary charge of murder and a cautionary instruction on the prior felony was not given until the end of a three-day trial that the defendant was manifestly prejudiced. United States v. Lewis, 787 F.2d 1318 (9th Cir. 1986). Though the Ninth Circuit did not dwell on this point, the defendant also did not take the stand; thus, the prior felony would not have been otherwise admissible.

Similarly, the Kentucky Supreme Court has held that failure of the trial court to sever a felon/firearm charge for trial was prejudicial error. Hubbard v. Commonwealth, 633 S.W.2d 67 (Ky. 1982). In a dissenting opinion, it was noted that the defendant had not testified at trial. He was, therefore, not subject to cross-examination on his felony record.

Other state appellate courts have also held that prejudice results from joinder and introduction of a felony record at trial where otherwise the felony conviction would have been inadmissible. See, e.g., Elerson v. State, 732 P.2d 192 (Alaska App. 1987). In addition, the Georgia Court of Appeals, though it did not reach the merits due to the appellant’s assertion of a new ground attacking joinder on appeal, observed that a felon/firearm offense is not an included offense of armed robbery and may be an existing offense before and after the commission of armed robbery. Coleman v. State, 163 Ga. App. 173, 293 S.E.2d 395 (1982).

It is clear from this authority that foreign jurisdictions have engaged in the same analysis as we have in assessing prejudicial error in these cases. Turning to the merits in the case before us, the evidence for conviction is much weaker than the evidence presented by the state in either Sullinger or Ferrell. The eyewitness testimony is from a witness, Kathy Riggsbee, who was under suspicion as an accomplice and who was charged with hindering apprehension. Moreover, the prior conviction sustaining the felon/firearm charge — grand larceny — was more than ten years old and could not have been used for impeachment purposes under Ark. R. Evid. 609(b).

Where a felon/firearm charge is tried with a second felony, the jury is confronted at the opening of the trial with the stark and highly significant fact that the defendant is a convicted felon. The felon/firearm charge generally has no relevance to the second charge being tried and serves only to sully the defendant in the minds of the jurors. In the present case, the previous conviction occurred in 1974 and was for grand larceny. It had no probative value in Sutton’s trial for the murder of Lyle Boliou. At the end of the trial, the jury was instructed that a prior conviction could only be used to assess credibility and not as evidence against the accused. However, we are of the opinion that this general instruction did little, if anything, to offset the effect of the criminal record.

The state argues that Sutton, in fact, did commit the felon/ firearm offense at the same time he purportedly shot Boliou on August 13, 1990. In other words, he was a convicted felon illegally in possession of a firearm at that moment. Hence, so the argument continues, the two offenses were part of a single scheme or plan under Ark. R. Crim. P. 22.2(a) at the time the trigger was pulled. We are mindful that at least one other jurisdiction had adopted this point of view. See State v. Illig, 237 Neb. 598, 467 N.W.2d 375 (1992). However, we are not convinced by this argument for two reasons. First, the prejudice caused by evidence of a prior conviction in the state’s case is great. Secondly, we do not believe that an ongoing violation of a felon’s possession of a firearm should be telescoped into one moment in time in order to enhance the prosecutor’s case on a second, more serious charge.

We are disinclined, as are other jurisdictions, to conclude that joinder of a felon/firearm charge with a second felony charge constitutes prejudice by that fact alone in all instances. See, e.g., United States v. Daniels, supra. However, we agree with the Ninth Circuit Court of Appeals “that the danger that the jury’s perception of the defendant will be adversely affected is so strong as to create a presumption favoring severance.” 787 F.2d at 1322.

Further, we do not believe that the circumstances in this case are sufficient to overcome that presumption of prejudice. The evidence of guilt was weak, and the prior felony was inadmissible for purposes of impeachment. In addition, the error was not cured by the instruction on the prior conviction and credibility at the end of the trial. Sutton, accordingly, was prejudiced by the joinder and is entitled to a new trial.

We, therefore, hold that the trial of the felon/firearm charge with the murder charge was prejudicial error and that the circuit court abused its discretion in denying the motion to sever. Because McEwen v. State, supra, is inconsistent with our holding in this case, we overrule it.

Sutton makes numerous other assertions of error, and we address those that may arise on retrial.

II. IMPEACHMENT

Kathy Riggsbee testified that Boliou was killed during the day. Lieutenant Sam Poe of the Greene County Sheriff’s Department testified that he was never able to ascertain the Boliou was seen alive at 9:00 p.m. on the day of the murder. Sutton claims that had he been able to pursue cross-examination of Lieutenant Poe about his conversation with a waitress at the Red Onion Bar, Poe would have been forced to admit that the woman told him she had seen Boliou at the bar at about 9:00 p.m. on that day. He argues that this cross-examination was necessary to impeach Lieutenant Poe’s earlier testimony on that point.

Sutton, however, was attempting to impeach Lieutenant Poe with another officer’s field notes on what was a collateral matter which, as the trial court correctly ruled, was improper. A witness cannot be impeached by extrinsic evidence on a collateral matter. See Teas v. State, 23 Ark. App. 154, 744 S.W.2d 739 (1988). Sutton could easily have called the waitress as a witness on this point and, in fact, did so. There was no prejudice to Sutton. The trial court did not abuse its discretion in its ruling.

III. OFFER OF IMMUNITY

Sutton next argues that an agreement was made with law enforcement officers not to charge him with a felon/firearm offense if he gave a statement. Because he gave the statement, the failure to honor that agreement, according to Sutton, should void the felon/firearm charge. In support of his argument, he cites us to Davis v. State, 275 Ark. 264, 630 S.W.2d 1 (1982), where we held that a confession induced by promises of immunity may be involuntary.

Sutton, however, has pursued the wrong remedy, as the trial court appropriately noted in denying the motion. His motion filed on August 26, 1991, the day of the trial, prayed that the felon/firearm charge be dropped rather than that the statement be ruled inadmissible. His remedy for an involuntary confession, however, was to have the statement suppressed. Cf. Davis v. State, supra. The trial court further observed that only prosecutors, not law enforcement officers, can drop charges, and that Sutton’s attorney knew that. The evidence that Sutton possessed the pistol was ample apart from his statement. We cannot say that the trial court erred in its ruling on this point. See Patterson v. State, 306 Ark. 385, 815 S.W.2d 377 (1991).

IV. MISCELLANEOUS

There was no error in three other points raised by Sutton. The trial court properly refused to allow the testimony of the waitress of the Red Onion Bar regarding the name of the man who was with Boliou at the bar on either August 13 or August 14, 1990, between 6:30 and 7:00 p.m. The report of that name was hearsay. Moreover, by the description of the man from the waitress, it was clear to the jury that the man was not Sutton. Hence, there was no prejudice to the appellant.

At trial, Ruth Boliou, the widow of the victim, was called by Sutton as a witness, and she invoked the Fifth Amendment against self-incrimination. Sutton advances the theory that Mrs. Boliou should have had an attorney appointed for her which would have enabled him to question her about her husband’s death. The theory has no merit. Mrs. Boliou was under suspicion by the authorities for the murder of her husband, according to her testimony. She was perfectly within her rights to seek Fifth Amendment protection. Sutton, in addition, offers no authority for why counsel must be appointed for Mrs. Boliou under these circumstances. See Dixon v. State, 260 Ark. 857, 545 S.W.2d 606 (1977).

There is, finally, Sutton’s argument that the trial court should have admitted into evidence a letter by Riggsbee’s attorney to the prosecutor which, Sutton contends, was in the nature of a plea bargain for her hindering-apprehension charge. Alternatively, Sutton argues that he should have been allowed to use the letter to impeach Riggsbee’s testimony that she had no deal with the state.

Sutton correctly maintains that Ark. R. Evid. 410 provides that evidence of an offer to plead guilty is not admissible against the person making the offer and that here the offer of proof is not made against that person. Nevertheless, the letter was clearly hearsay and was proffered to prove the truth of the assertions made in the letter. Refusing its admission into evidence as part of Sutton’s case was appropriate.

Whether the letter should have been allowed for impeachment purposes against Riggsbee is a different matter. Kathy Riggsbee denied that she had entered into an agreement with the state. Sutton’s counsel then tried to impeach her with her attorney’s letter. The letter read in part: “If she cooperates with authorities, I would think a nolo plea and a probationary sentence would be generous to the prosecution.” Had the letter indicated that a plea bargain agreement had actually been struck, it might well have been admissible for impeachment purposes. See Henderson v. State, 279 Ark. 435, 652 S.W.2d 16 (1983). Here, though, the letter from Riggsbee’s counsel suggests little more than an effort to explore the potential for a negotiated plea. The trial court correctly ruled that the letter did not rise to the level of an agreement. We have upheld a trial court’s ruling that when a plea agreement has been withdrawn, a witness may not be questioned about it. See Smith v. State, 310 Ark. 247, 837 S.W.2d 279 (1992). Similarly, in this case the letter did not evidence a consummated agreement or, indeed, a firm offer. We can observe no prejudice to Sutton emanating from the trial court’s ruling on this point.

Reversed and remanded.

Hays and Glaze, JJ., dissent.

Tom Glaze, Justice,

dissenting. I respectfully dissent. In Ruiz & Van Denton v. State, 273 Ark. 94, 617 S.W.2d 6 (1981), this court held that where criminal offenses constitute one criminal episode and when a series of acts are committed, that is enough to give the state a right to join them in a single information. See also ARCP Rule 21.1 (b). The majority relies on Rule 22.2(a), which gives a defendant the absolute right of severance when the offenses have been joined solely on the ground that they are of the same or similar character. Here, the state’s reason for joining Sutton’s murder and felon/firearm charges was Sutton used a handgun to kill his victim, so much of the proof in proving both charges is the same. See Brown v. State, 304 Ark. 98, 800 S.W.2d 424 (1990).

Finally, the majority court seems concerned Sutton is wrongly prejudiced by his 1974 theft conviction being revealed to the jury in the same trial in which he is being tried for murder. Of course, under A.R.E. Rule 609(b), such conviction could not ordinarily have been used against him in his murder case. However, in the circumstances presented, Sutton, as a convicted felon, used a gun to commit murder. As a consequence, the felon/ firearm violation is a current offense which makes his sixteen-year-old theft conviction relevant. I do not believe this is the type prejudice our severance rules protect against.

The trial court had discretion in my view to deny Sutton’s severance motion, and on the record provided this court in review, I cannot say the court abused its discretion.

Hays, J., joins this dissent.


author: Per Curiam.

text:
    Phillip G. KELLETT v. STATE of Arkansas
    CR 92-1426
    843 S.W.2d 318
    Supreme Court of Arkansas
    Opinion delivered January 11, 1993

      Harold W. Madden, for appellant.
    No response.
   Per Curiam.

Appellant, Phillip G. Kellett, by his attorney has filed for a rule on the clerk.

His attorney, Harold W. Madden, admits that the failure to file the record in time was due to a mistake on his part.

We find that such an error, admittedly made by the attorney for a criminal defendant, is good cause to grant the motion. See our Per Curiam opinion dated February 5, 1979, In Re: Belated Appeals in Criminal Cases, 265 Ark. 964. A copy of this opinion will be forwarded to the Committee on Professional Conduct.


author: Per Curiam. Robert L. Brown, Justice,

text:
    Robert Earl TUCKER, Jr. v. STATE of Arkansas
    CR 92-1252
    844 S.W.2d 335
    Supreme Court of Arkansas
    Opinion delivered January 11, 1993

      Maxie Kizer, for appellant.
    No response.
   Per Curiam.

Robert Earl Tucker has filed a motion for rule on the Clerk contending it was error for the Clerk to refuse to docket his appeal from a burglary conviction. The Clerk properly declined the appeal because Tucker’s notice of appeal was untimely. If we were simply to deny the motion, Tucker’s counsel could then seek a belated appeal. Rather than require that additional procedure, we choose to treat the motion now before us as one for belated appeal and to grant it.

Tucker was convicted of burglary and sentenced as an habitual offender on July 21, 1992. He filed his notice of appeal July 23,1992. Judgment was not entered, however, until July 24, 1992. Tucker filed a second notice of appeal on September 8, 1992. The Clerk correctly refused to lodge the transcript with this Court. The first notice was ineffective because it was premature. Kelly v. Kelly, 310 Ark. 244, 835 S.W.2d 869 (1992). The second notice was more than 30 days after entry of the judgment and thus too late. Ark. R. App. P. 4(a).

Our decision in the Kelly case overruled the holding in State v. Joshua, 307 Ark. 79, 818 S.W.2d 249 (1992), which was to the effect that a notice of appeal filed prior to entry of judgment is to be treated as being filed when judgment is entered.

If this were a case in which the attorney had, by inadvertence, failed to file a timely notice of appeal, we would grant the rule and forward the attorney’s name to the Committee on Professional Conduct under the authority of Harkness v. State, 264 Ark. 561, 572 S.W.2d 835 (1978). This is not such a case.

In Harkness v. State, supra, we pointed out that if we did not grant a belated appeal in a case where a lawyer had inadvertently missed the 90-day deadline for docketing the record in a criminal case with this Court, the defendant would be able to obtain a new trial or belated appeal on the basis of ineffective assistance of counsel. In civil cases we routinely deny such motions, as there is no Sixth Amendment consideration.

In a per curiam order subsequent to the Harkness decision we outlined the procedure to govern in criminal cases when the appeal was untimely'without good reason. We said we would take the practical measure of allowing the appeal to be filed and would forward the name of the inadvertent counsel to the Committee on Professional Conduct. Here is the last paragraph of that per curiam order:

The controlling rule provides: “The Supreme Court may act upon and decide a case in which the notice of appeal was not given or the transcript of the trial record was not filed in the time prescribed, when a good reason for the omission is shown by affidavit." (Italics supplied.) Rules of Criminal Procedure, Rule 36.9. The purpose of the exception, to take care of hardship cases, is being disregarded, in that counsel tender out-of-time transcripts without a good reason for the delay. In order to put the responsibility where it belongs, on the shoulders of the lawyer who is at fault, hereafter when no good cause for the error is shown, the court will publish a per curiam order allowing the appeal, giving the name of the lawyer, and stating why no good reason has been shown for the omission. A copy of the order will be sent to the court’s Committee on Professional Conduct, to be kept in its files for the Committee’s information if any complaint of any kind should later be filed against that lawyer.

In this case there is, as Ark. R. Crim. P. 36.9 requires, a “good reason” for the failure to file the appeal. There has been some justifiable confusion about whether our decision in the Kelly case, which was civil in nature, applies to criminal appeals as well. This is not a case of inadvertence to which the Harkness decision and our explanatory per curiam order apply. Treating the motion as one for belated appeal pursuant to Rule 36.9, we find good reason to grant the motion.

Motion for belated appeal granted.

Holt, C.J., and Brown, J., dissent.

Robert L. Brown, Justice,

dissenting. Our procedures are defective when we make a sweeping rule change in an opinion and expect compliance from lawyers before any possibility of notice of that change has gotten out to the legal community. The effect is akin to mandating compliance with a rule before its promulgation.

In this case, Tucker was convicted on July 21,1992. He filed his notice of appeal two days later on July 23, 1992. Judgment was not entered, however, until July 24, 1992. Eleven days prior to entry of judgment, we held in an unrelated case that this violated Appellate Rule 4 because the notice of appeal was filed before entry of judgment. Kelly v. Kelly, 310 Ark. 244, 835 S.W.2d 869 (1992).

Kelly, however, was a civil case which overruled a criminal case, State v. Joshua, 307 Ark. 79, 818 S.W.2d 249 (1991), on this point. Thus, the import of Kelly was that it interpreted an appellate rule to apply to criminal appeals when we had not done so as recently as nine months previously in Joshua.

The Kelly decision had not had time to appear in the Arkansas Advance Reports when the Tucker facts occurred, because the Tucker notice of appeal and judgment took place within ten or eleven days of that decision. In sum, we made a significant change in appellate procedure affecting criminal appeals. We did so in a civil case. And there was no notice of change to the bar at the time of the Tucker facts.

Now in this per curiam order, we apply a Band-Aid solution and say that we will treat this motion for rule on the clerk as a motion for belated appeal even though no affidavit of good reason accompanied the motion as required by Ark. R. Crim. P. 36.9. What we should do with a major rule change — even one embodied in an opinion such as in Kelly — is publish a per curiam order with an effective date for the rule so that notice is assured to be given to the bar and attorney error thereafter has some basis in reality.

I would grant the motion for rule on the clerk.

Holt, C.J., joins.


text:
    WESTARK CHRISTIAN ACTION COUNCIL v. Mark STODOLA
    92-1034
    843 S.W.2d 318
    Supreme Court of Arkansas
    Opinion delivered January 12, 1993

      DeLay Law Firm, by: R. Gunner DeLay, for appellant.

      Winston Bryant, Att’y Gen., by: Clint Miller, Senior Asst. Att’y Gen., for appellee.
   Per Curiam.

On May 1, 1992, a hearing was held on the motion of the appellant, Westark Christian Action Council (Westark), that a special prosecutor be appointed to investigate a charge that Dr. Joycelyn Elders, a state employee, had been guilty of improper political practices in violation of Ark. Code Ann. § 7-l-103(2)(B) (Supp. 1991). The motion was denied on May 26, 1992. A notice of appeal was filed, and the record was filed with this Court September 11, 1992.

On January 4, 1993, Westark filed its motion asking for expedited hearing of its appeal because, if Dr. Elders is to be charged, the charge must be filed before January 18,1993, or the statute of limitations will have run. The motion brought the case for the first time to the attention of this Court.

In view of the fact that this Court could not possibly set a briefing schedule, do the necessary research, conduct the necessary conferences, and reach a decision between now and January 18, 1993, the motion is denied.


author: Robert H. Dudley, Justice.

text:
    J.D. FISHER v. Gerald JONES, Jones Olds-GMC-Buick, Inc., Mercedes-Benz of North America, Inc. and Mercedes-Benz Credit Corporation
    92-763
    844 S.W.2d 954
    Supreme Court of Arkansas
    Opinion delivered January 19, 1993
    [Rehearing denied February 22, 1993.]

      Raymond C. Smith, P.A., for appellant.

      Davis, Cox & Wright, by: Wm. Jackson Butt //and Tim E. Howell, for appellee Mercedes-Benz Credit Corp.

      Ball & Mourton, by: E.J. Ball and Andy E. Adams, for appellee Gerald Jones and Jones Olds-GMC-Buick, Inc.

      Newbern, J., not participating.

   Robert H. Dudley, Justice.

The plaintiff, J.D. Fisher, filed a multi-count suit in chancery court against ten defendants. The chancellor transferred to circuit court the counts that sought remedies at law. Those law counts were against four of the defendants and are the counts involved in this appeal. The chancellor tried the equitable counts against the other six defendants and, after a trial on the merits, ruled in favor of those defendants. The plaintiff appealed, and we affirmed. Fisher v. Jones, 306 Ark. 577, 816 S.W.2d 865 (1991). Subsequently, the four defendants with counts remaining against them in circuit court filed motions for summary judgment. The circuit court granted the motions, and the plaintiff appeals. We affirm, mainly because the primary issue is precluded by the prior holding.

J.D. Fisher, the plaintiff-appellant, was one of three principal owners of Fisher Buick, Inc., which held the Mercedes Benz franchise in Fayetteville for several years before February 26, 1986. On that date, Fisher Buick entered into a contract to sell the dealership to Kelly Hill and others with the consideration to be paid in monthly installments. The contract restricted Hill from reselling the franchise or the other property without the prior approval of Fisher Buick, and further gave Fisher Buick the right of first refusal to repurchase the franchise and other assets. It also provided that Mercedes Benz of North America (MBNA) had to approve any sale of the dealership made before the purchase price was paid in full. A copy of the contract was provided to MBNA’s agents in its Houston, Texas zone office. An agent for MBNA, at its Houston office, told plaintiff that he saw no reason why the franchise would not be re-awarded to plaintiff if Hill went out of business. However, the agents at the. Houston zone office did not have authority to bind MBNA to a contractual agreement for the granting of a franchise, and plaintiff knew they had no such authority.

In May 1986, Hill was awarded the Mercedes Benz franchise in Fayetteville. At that same time, Fisher Buick dissolved its corporate charter.

Hill financed his inventory of Mercedes Benz automobiles through the Mercedes Benz Credit Corporation (MBCC). Hill, who apparently was undercapitalized, sold automobiles but failed to reimburse MBCC. By the end of October 1989, Hill had closed the dealership and vacated the premises. MBNA terminated the franchise in November 1989.

In October 1989, defendant Gerald Jones saw that the Mercedes Benz dealership had gone out of business and called MBNA to see about obtaining the franchise. MBNA advised Jones that he needed to contact Hill. Jones did so and began negotiating with Hill in the latter part of October 1989. The negotiations resulted in the execution of a franchise sales agreement between Hill and Jones Olds-GMC-Buick, Inc., dated October 28,1989. The agreement was supplemented on November'3, 1989, to address a settlement of Hill’s debts to MBNA and MBCC. Hill neither informed plaintiff of the pending sale nor offered him first refusal.

Plaintiff learned of the pending sale and, on October 31, filed two suits in the Chancery Court of Washington County. The first was against Kelly Hill, Thelma Hill, Hill Investment Co., Hill Motor Cars, Inc., Hill Motor Cars II, Inc., and Mcllroy Bank and Trust Company, the escrow agent-bank into which Hill was supposed to make the monthly installment payments. The second complaint was against Gerald Jones, Jones Olds-GMC-Buick, MBNA, and MBCC. The two chancery court suits were consolidated, but the law counts, which were contained in the second complaint and form the basis of this appeal, were transferred to circuit court. The chancellor heard the equitable counts and ruled in favor of the defendants remaining in chancery court. The plaintiff appealed, and we affirmed. Fisher v. Jones, 306 Ark. 577, 816 S.W.2d 865 (1991). Following the affirmance of the chancery case, the circuit court counts remained pending against four of the defendants. Those four defendants filed motions for summary judgments. The circuit court granted summary judgment in favor of each of the defendants, and the plaintiff appeals. We affirm.

The first assignment of error involves the summary judgment in favor of Gerald Jones and Jones Olds-GMC-Buick. The plaintiff alleged that Jones and Jones Olds-GMC-Buick tortiously interfered with his contractual relations or business expectancy. The circuit court ruled that there were no genuine issues of material fact involving two of the elements of this tort. That ruling was eminently correct.

In Walt Bennett Ford v. Pulaski County Special School District, 274 Ark. 208, 214, 624 S.W.2d 426, 429 (1981), we set out the elements of the tort as follows:

The basic elements going into the prima facie establishment of the tort are (1) the existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy on the part of the interferer; (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy; and (4) resultant damage to the party whose relationship or expectancy has been disrupted.

Plaintiff could not establish that a material issue of fact existed about element one above; that is, plaintiff could not show that there was a material dispute about the existence of a valid contract. He was prevented from doing so by the doctrine of collateral estoppel, or issue preclusion, because, in the first appeal, we affirmed the chancellors’ ruling that plaintiff did not have a contract with MBNA to re-award him the franchise. Fisher v. Jones, 306 Ark. at 582, 816 S.W.2d at 868.

Collateral estoppel, or issue preclusion, requires four elements before a determination is conclusive in a subsequent proceeding: (1) the issue sought to be precluded must be the same as that involved in the prior litigation; (2) that issue must have been actually litigated; (3) it must have been determined by a valid and final judgment; and (4) the determination must have been essential to the judgment. East Texas Motor Freight Lines, Inc. v. Freeman, 289 Ark. 539, 543, 713 S.W.2d 456, 459 (1986). All four elements are met in this case, and, since we previously held that there was no contract with MBNA, the issue is precluded from being relitigated.

While the claim of tortious interference with a contractual relationship is claim precluded by collateral estoppel, the claim of tortious interference with a business expectancy might not be so precluded. However, we need not decide whether the business expectancy was certain enough to give rise to such a cause of action in this case, because, even if it were, the plaintiff could not show any dispute of material fact involving element two, or knowledge of the expectancy of business on the part of the interferer. Jones attached an affidavit to his motion for summary judgment in which he stated that he had no knowledge of the 1986 agreement between Hill and plaintiff before he entered the contract with Hill on October 28, 1991. Plaintiff did not counter Jones affidavit in any manner. Other evidence corroborates Jones’s statement. Plaintiff only showed that on October 31, 1989, plaintiffs attorney sent a letter to Jones. This was after the date of the contract, and the contents of the attorney’s letter were not disclosed. Jones testified that he received the letter from plaintiffs counsel before he executed an addendum on November 3, 1989, but he testified that the contract between Hill and himself was complete and that the addendum was related to negotiations conducted with MBCC and MBNA on October 30, 1989, which, again, was before he was aware of a possible business expectancy on the part of plaintiff. In sum, plaintiff did not show any dispute of material fact involving defendant Jones’s lack of knowledge that he was interfering with plaintiffs reasonable expectation of a business relationship. Accordingly, the trial court correctly granted summary judgment in favor of defendant Jones.

The plaintiff argues that collateral estoppel should not be applied, and the issue of tortious interference should not be precluded because Jones was not a party to the first appeal. At one time, mutuality was a requirement of res judicata or claim preclusion, and also of collateral estoppel or issue preclusion. See, e.g., Restatement of Judgments § 93 (1942); see also Bigelow v. Old Dominion Copper Co., 225 U.S. 111 (1911). While still a requirement of res judicata, the requirement of mutuality has been abandoned by most jurisdictions for collateral estoppel. 18 Charles Wright, Arthur Miller & Edward Cooper, Federal Practice and Procedure § 4464 (1981); Stuart Johnson, Note, North Carolina Abandons the Mutuality Requirement for Defensive Collateral Estoppel, 66 N.C. L. Rev. 801 (1988). The case at bar deals with the defensive use of collateral estoppel. The U.S. Supreme Court first approved the defensive use of collateral estoppel in Blonder-Tongue Laboratories v. University of Illinois Foundation, 402 U.S. 313 (1971). While the offensive use of collateral estoppel has also been approved, it is more controversial, and not at issue in this case. (The Supreme Court approved the offensive use of collateral estoppel in Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979)). Other state supreme courts have abandoned the mutuality requirement for the defensive use of collateral estoppel. See, e.g., Silva v. State, 745 P.2d 380 (N.M. 1987); Thomas M. McInnis & Assocs., Inc. v. Hall, 349 S.E.2d 552 (N.C. 1986); Black Hills Jewelry Mfg. Co. v. Felco Jewel Indus., 336 N.W.2d 153 (S.D. 1983). In the present case, plaintiff chose to file his case against all of the defendants in chancery court and requested that the legal counts against four of the parties be transferred to circuit court, which they were. The chancery case was fully litigated and involved some of the same issues in the circuit court counts. We have no hesitancy in holding that mutuality of parties or privity in the chancery case and its appeal is not required for the defensive use of collateral estoppel in the circuit court case.

The next assignment of error involves the summary judgment in favor of MBNA. Plaintiff pleaded MBNA was liable for damages for breach of contract. A part of our holding in the first appeal was concerned with this claim: “In sum, we hold the evidence supports the chancellor’s decision that no express or implied contract existed and therefore no judgment against MBNA for specific performance could be granted.” Fisher v. Jones, 306 Ark. at 582, 816 S.W.2d at 868. The trial court held that plaintiff’s claim of MBNA’s breach of contract was barred by the doctrine of res judicata.

In Bailey v. Harris Brake Fire Protection District, 287 Ark. 268, 269, 697 S.W.2d 916, 917 (1985), we set out the elements of res judicata as follows:

(1) the first suit resulted in a final judgment on the merits; (2) the first suit was based upon proper jurisdiction; (3) the first suit was fully contested in good faith; (4) both suits involve the same claim or cause of action; and (5) both suits involve the same parties or their privies.

All of the elements are met with regard to plaintiff’s breach of contract claim, and the chancellor was thus correct in concluding this claim was barred by res judicata.

Plaintiff also pleaded that MBNA was also liable for tortious interference with contractual relations. No mention of interference with business expectancy is made in this assignment. Initially, since MBNA is one of the parties to the alleged contract with plaintiff, it is difficult to understand how MBNA could be the interferer in the contract. In the chancery suit, the chancellor ruled that the plaintiff failed to meet his burden of proving the existence of a contract requiring MBNA to re-award the franchise to him. The chancellor additionally found that MBNA agents in the Houston office lacked the authority to bind MBNA to such a contract and that plaintiff was aware of this lack of authority. In affirming the chancellor we held the evidence supported the chancellor’s decision that no express or implied contract existed between plaintiff and MBNA. That issue was precluded from further litigation in the counts that remained in circuit court. Thus, plaintiff was precluded from establishing the first element of the tort of interference with contractual relations.

Plaintiffs final assignment of error is that the trial court erred in granting summary judgment in favor of MBCC because there are material facts in dispute involving his claim that it tortiously interfered with his right of first refusal in his contract with Hill. MBCC repossessed the car inventory from the dealership for resale in a commercially reasonable manner. The trial court ruled that even if MBCC had somehow interfered with plaintiffs right of first refusal with Hill, plaintiff could not prove any damages because MBNA was under no contractual obligation to re-award its franchise to plaintiff, and the trial court also ruled that because Hill owed MBCC about $600,000.00, MBCC had a right to lawfully protect its interest.

For an interference to be actionable, it must be improper. Walt Bennett Ford v. Pulaski County Special Sch. Dist., 274 Ark. 208, 214-A, 624 S.W.2d 426, 429 (1981) (supplemental opinion on denial of rehearing). The Restatement (Second) of Torts sets out the factors in determining when interference is improper as follows:

Factors in Determining Whether Interference is Improper.
In determining whether an actor’s conduct in intentionally interfering with a contract or a prospective contractual relation of another is improper or not, consideration is given to the following factors:
(a) the nature of the actor’s conduct;
(b) the actor’s motive;
(c) the interests of the other with which the actor’s conduct interferes;
(d) the interests sought to be advanced by the actor;
(e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other;
(f) the proximity or remoteness of the actor’s conduct to the interference; and
(g) the relations between the parties.

Restatement (Second) of Torts § 767 (1979). The trial court also considered section 769 of the Restatement, which provides:

Actor Having Financial Interest in Business of Person Induced
One who, having a financial interest in the business of a third person intentionally causes that person not to enter into a prospective contractual relation with another, does not interfere improperly with the other’s relation if he
(a) does not employ wrongful means and
(b) acts to protect his interest from being prejudiced by the relation.

As a second ground of the summary judgment in favor of MBCC, the trial court considered MBCC’s financial interest in the business and correctly concluded that there simply was no proof of an improper interference by MBCC.

Affirmed.

Newbern, J., not participating.


author: Robert H. Dudley, Justice. Tom Glaze, Justice, Robert H. Dudley, Justice. Tom Glaze, Justice,

text:
    Robert L. HASHA, Jim McDonald, Marlene Ray, Andre Miller, J.D. Gosnell, and Bradley L. Lewis, Individually and on Behalf of All Other Persons Similarly Situated v. CITY OF FAYETTEVILLE, Arkansas and Arvest Trust Company, National Association
    92-578
    845 S.W.2d 500
    Supreme Court of Arkansas
    Opinion delivered January 19, 1993
    [Supplemental Opinion on Denial of Rehearing March 9, 1993]

      Lisle Law Firm, for appellant.

      Friday, Eldredge & Clark, by: Larry W. Burks, and Jeffrey H. Moore, for appellee Arvest Trust Co., N.A.

      Jerry E. Rose, City Att’y, for appellee City of Fayetteville.

      Hays and Glaze, JJ., dissent.

   Robert H. Dudley, Justice.

This is a illegal exaction suit. The taxpayers allege that a primary purpose of the tax has failed and that an injunction should be issued against its continued collection. The chancellor denied relief. We hold that the tax constitutes an illegal exaction and reverse and remand with instructions.

The constitutional provisions and statutes that are applicable to this case are as follows. Article 12, section 3 of the Constitution of Arkansas, in the material part, provides: “The General Assembly shall provide, by general laws, for the organization of cities . . . and restrict their power of taxation . . . so as to prevent the abuse of such power.” Article 12, section 4 begins: “No municipal corporation shall be authorized to pass any law contrary to the general laws of the state. . . .” A basic premise, to which we have long adhered, is that a municipal corporation has no inherent power to levy taxes, but can levy only such taxes as are authorized by law. Vance v. City of Little Rock, 30 Ark. 435 (1875). Article 16, section 11, in pertinent part, provides: “No tax shall be levied except in pursuance of law, and every law imposing a tax shall state distinctly the object of the same. . . .”

Act 25 of 1981, extraordinary session, authorized cities to adopt a local sales and use tax upon approval by the voters. The act provides that the tax can be abolished either by vote of the city council or by vote of the qualified voters of the city acting in accordance with the initiative procedures of Amendment?. 1981 Ark. Acts 25 § 2(f). The emergency clause of the act provided that the tax was for city “services.” This tax was referred to as the cities’ “operating penny” tax since it could be “used by the city for any purpose for which the city’s general funds may be used.” Id. § 7. Section 2(d) of the act provided that the voters of the city must approve or reject the tax and that:

The ballot title to be used at such election shall be substantially in the following form:
“FOR adoption of one percent (1 %) local sales and use tax within (name of city).”
“AGAINST adoption of a one percent (1%) local sales and use tax within (name of city).”

Act 25 of 1981, summarized above, was amended by Act 726 of 1983 to authorize cities, after a public vote, to pledge tax collections from the “operating penny” to finance capital improvements. See Ark. Code Ann. §§ 26-75-201 — 26-75-223 (1987 & Supp. 1991). Thus, the “operating penny” is no longer limited to providing services, but can now be converted to pay for capital improvements, and, when the tax is imposed for capital improvements, the right to an immediate repeal by initiative is lost since the tax cannot be abolished until the bonds or leases are paid in full. Ark. Code Ann. § 26-75-210 (1987).

Amendment 62 to the Constitution of Arkansas was approved at the November 1984 general election. It is entitled “Local Capital Improvement Bonds” and repealed Amendments 13, 17, 25, and 49. Section 1(a) of Amendment 62 authorizes municipalities to issue bonds, upon approval by the voters, for capital improvements of a public nature and authorizes an ad valorem tax to repay the capital improvement bonds. The same section, 1(a), permits other taxes to be used to repay capital improvement bonds if authorized by the General Assembly.

As legislation implementing Amendment 62, the General Assembly enacted Act 871 of 1985. This act does not repeal Act 25 of 1981, the “operating penny” statute; rather, it recognizes the continuation of Act 25 of 1981 in sections 9(g), 9(h), 9(k), and 10(d). Codified at Ark. Code Ann. §§ 14-164-332(b), 333(2)(a), 336(c), 337(c)(1) (1987 «fe Supp. 1991). Section 9 of Act 871 of 1985, Ark. Code Ann. § 14-164-327 (1987), authorizes a municipality to adopt a new one cent “bond penny” local sales and use tax to retire capital improvement bonds. Section 10 of Act 871, entitled “Pledge of Existing Sales and Use Tax,” provides that a city, after approval by the voters, can pledge all or a portion of a pre-existing sales tax to retire capital improvement bonds. Ark. Code Ann. § 14-164-337(c)(1) (Supp. 1991). In 1988, by Act 25, the General Assembly amended Ark. Code Ann. § 14-164-338 to provide that a city, as an alternative to issuing capital improvement bonds, can construct pay-as-you-go capital improvements by levying a “bond penny” for up to twelve months when that penny, over a twelvemonth period, will be sufficient to construct the improvement.

In this case, the City of Fayetteville sought to assist the Fayetteville School District in a school construction project. In November of 1987, the City asked the Attorney General if it could contribute any part of a city “operating penny”' sales and use tax to the Fayetteville School District. The Attorney General responded that Arkansas statutes “prohibit the City from contributing local sales tax revenue to the schools.” The Attorney General said the City might construct school facilities and rent them back to the school district. In April of 1988, the Attorney General again informed the City that it could not contribute a part of a local sales tax revenue to the local school district.

In October 1988, in spite of the Attorney General’s opinion, the City of Fayetteville, by ordinance 3381, levied a one-cent sales and use tax, subject to approval by the City’s voters at the November 1988, general election. The ordinance, in the material parts, provides:

Section 2. A special election be, and the same is hereby called to be held in the City on the 8th day of November, 1988, at which election there will be submitted to the electors of the City the questions of (a) levying a local sales and use tax at the rate of one percent (1 %), and (b) issuing capital improvement revenue bonds secured by a pledge of a portion of the City’s 1 % local sales and use tax, if approved, to finance the acquisition, construction, reconstruction and equipping of educational facilities for the Fayetteville School District.
Section 3. The questions shall be placed on the ballot for the election in substantially the following form:
FOR adoption of a 1 % local sales and use tax within the City to be levied and collected to a maximum of $25.00 on each single transaction for a period of 20 years.
AGAINST adoption of a 1 % local sales and use tax within the City to be levied and collected to a maximum of $25.00 on each single transaction for a period of 20 years.

Collection of the 1 % local sales and use tax will not commence until collection of the City’s existing 1 % local sales and use tax shall have ceased. It is proposed that proceeds from the tax be used to finance a capital improvement program and economic development program (capital facilities) for the City.

FOR the issuance of revenue bonds secured by a pledge of a portion of the City’s 1 % local sales and use tax, if approved, to finance the acquisition, construction, reconstruction and equipping of $ 10,000,000.00 in educational facilities for the Fayetteville School District.
AGAINST the issuance of revenue bonds secured by a pledge of a portion of the City’s 1 % local sales and use tax, if approved, to finance the acquisition, construction, reconstruction and equipping of $ 10,000,000.00 in educational facilities for the Fayetteville School District.

The proposals were submitted to the voters on ballot forms prepared in compliance with the ordinance. The proposals appeared next to each other on the ballots with a line between them. The $10,000,000.00 educational facilities construction program passed by 8,556 to 4,084 votes, or better than two to one, but the tax was approved by a vote of only 7,643 to 5,260.

After the election, the City was again advised, this time by three different bond counsel, that the City had no authority to construct or finance local school district projects with the sales tax funds. A fourth bond counsel advised that the City might implement the tax, construct the school facilities, and lease them to the school district. There was some discussion among city officials of a “friendly suit” to test the issue, but that was never pursued, and the City’s primary bond counsel wrote:

[W]e do not believe that it would be advisable for the City to seek a declaratory judgment as to the validity of bonds of the City secured by sales and use tax revenues for educational facilities for the Fayetteville School District. The law on a number of the points mentioned above is substantially against a favorable outcome, so that, although it is always possible that the validity of such bonds would be upheld, it seems probable that it would not.

Two years later the city desired to issue bonds to construct eleven other capital improvement projects. Section 14-164-337(b)(2)(A) of the Arkansas Code Annotated of 1987 provides that when the subsequent issuance of bonds is submitted to the voters, the ballot “[s]hall not resubmit the levy of the tax.” In accordance with that provision, the City, in 1990, by ordinance 3480, submitted to the voters only the question of the issuance of capital improvement bonds for eleven other separate projects. The ballot title also provided:

In addition, such proceeds may be pledged to secure the retirement of not to exceed $10,000,000 of educational facilities bonds of the City approved by the electors of the City at an election held on November 8, 1988.

On May 29, 1990, the city voters voted in favor of the issuance of capital improvement bonds for the eleven separate projects and the schools. On July 17,1990, after voter approval of the eleven capital projects and the schools, the City Board of Directors passed resolution 116-90, which acknowledged that its legal counsel had informed the City that it could not issue sales tax bonds to construct or finance school district projects, and that the only way it could assist the school district was to authorize “the City Manager to seek to escrow $1,000,000 a year plus interest from the General Fund, non-regular fee and tax revenues over a ten-year period to assist the school board in school construction projects.” In sum, in May 1990, the City publicly disclosed that no money from the sales tax would be applied to the Fayetteville School District and that the City Manager was authorized to “seek” to take money from the City’s non-regular general fund revenues for the schools.

On October 15, 1990, the City issued $33,019,000 in sales and use tax capital improvement bonds for the eleven capital improvement projects. Each month, after the sales and use tax funds are collected by the State, the funds are remitted to the bond trustee, intervenor Arvest Trust Company, N.A. The trustee then applies the amounts necessary for the retirement of the outstanding capital improvement bonds, retains a small amount as authorized in the trust indenture, and remits the rest to the city. The City then applies the money it receives to pay-as-you-go capital improvement projects.

On June 20, 1991, within a year after the City’s resolution formally acknowledged that the proposal to issue sales tax bonds to construct or finance buildings for the local school district was illegal, the taxpayers filed this action. The Fayetteville School District and Arvest Trust Company, N.A. were allowed to intervene. As an affirmative defense, Arvest pleaded that the trial court was without jurisdiction to hear the case because this is an election contest and, as such, is barred by the statute of limitations, and also that the suit is barred by the doctrine of estoppel.

The chancellor rejected intervenor Arvest’s affirmative defense of lack of jurisdiction because of limitations and held that it had jurisdiction. The chancellor reached the merits of the case and ruled that the voters, at the 1988 general election, approved the adoption of the sales and use tax for a period of twenty years, and that approval was given separately from the proposed issuance of $ 10,000,000 worth of bonds to construct facilities for the Fayetteville School District. The chancellor also ruled that the “operating penny” tax was validly enacted pursuant to authority found in Act 25 of 1981, and could be used “for any purpose for which the City’s general fund may be used,” the $33,019,000 in bonds issued in 1990 for the eleven separate capital improvement projects were validly issued under authority of Act 871 of 1985, Ark. Code Ann. § 14-164-337(a) (1987), and the current pay-as-you-go projects were validly financed pursuant to Act 25 of 1988, Ark. Code Ann. § 16-164-338 (Supp. 1991). The taxpayers filed a notice of appeal.

Arvest Trust Company, N.A., one of the appellees, argues that we must dismiss the appeal because the suit was an election contest, but it was not filed within 20 days of the election certification. See Ark. Code Ann. § 7-5-801 (d) (1987). As stated, the trial court ruled against Arvest on this argument, and Arvest did not file a notice of cross-appeal. A notice of cross-appeal is necessary when an appellee seeks something more than it received in the lower court. Moose v. Gregory, 267 Ark. 86, 590 S.W.2d 662 (1979). Ordinarily, this failure to file a notice of cross-appeal would end the matter, but since Arvest does not seek any relief it did not receive in the lower court, we address the matter and hold that it is without merit.

An election contest may be generally described as an action to contest the certification of the vote on an issue. See McClendon v. McKeown, 230 Ark. 521, 323 S.W.2d 542 (1989); Ark. Code Ann. § 7-5-801 (1987). Here, the taxpayers do not contest the.vote or the certification of the vote. Rather, as a part of their case, they plead that the tax was passed and certified, and that subsequently the purpose for the tax failed. Such a suit fits within the definition of a suit to prevent an illegal exaction. Hartwick v. Thorne, 300 Ark. 502, 780 S.W.2d 531 (1989). Article 16, section 13 of the Constitution of Arkansas confers upon any citizen the right to institute a suit to protect against an illegal exaction. Accordingly, we decline to dismiss this as the appeal of an election contest, and we reach the merits of the taxpayer’s appeal.

Arvest additionally contends the suit is barred by the doctrine of estoppel. Clearly, in the proper case a taxpayer may be estopped from questioning the validity of a tax. In Lawrence County v. Townsend, 202 Ark. 887, 154 S.W.2d 4 (1941), we held that the taxpayer was estopped to contest the validity of a bond issue when proper notice of the levy of the tax was given, the taxes were levied and collected from the taxpayer for eleven years, those taxes were pledged and paid on bonds for the same eleven year period, and there was no failure of purpose of the bond issue. That is not the case before us. Here, the tax itself is at issue, and the suit was filed within one year after it was publicly known that the principal purpose of the tax had failed. Thus, the doctrine of estoppel is not applicable.

In their appeal on the merits, the taxpayers assign five rulings as error. Those five assignments involve a number of sub-points beginning with the argument that Act 25 of 1981 is either repealed or unconstitutional and running through the chancellor’s construction of Act 25 of 1988, Ark. Code Ann. § 14-164-338 (Supp. 1991). Three of the assignments of error are closely related and involve the trial court’s ruling that the tax is valid even through the voters approved the tax at the same time they approved issuing $10,000,000 in bonds for the Fayetteville School District. We treat those three closely related assignments together. It is not necessary for us to reach the other issues.

The vote to adopt the sales and use tax for twenty years, with its concomitant waiver of the right of initiative during that period, was inextricably linked to the vote to issue $10,000,000 in bonds to construct facilities for the Fayetteville School District. The chancellor found that the voters voted separately on these two issues since there was a line between them on the ballot form, but the fact that there was a line between them is only on the periphery of the issue. From the beginning, the city clearly tied the two issues together. Section 2 of the ordinance calling the election provides:

A special election be, and the same is hereby called to be held in the City on the 8th day of November 1988, at which election there will be submitted to the electors of the City the questions of (a) levying a local sales and use tax at the rate of the one percent (1 %), and (b) issuing capital improvement revenue bonds secured by a pledge of a portion of the City’s 1 % local sales and use tax, if approved, to finance the acquisition, construction, reconstruction and equipping of educational facilities for the Fayetteville School District.

The two proposals were then submitted next to each other on the same ballot form with a line drawn between them. A voter who wished to vote for the issuance of the $10,000,000 in bonds for the school district knew that he or she was required to also vote in favor of the tax because, without the tax, the bonds could not be issued. It is abundantly clear that the proposal for the issuance of the bonds for the construction of the school facilities was popular with the voters. In fact, that proposal received a two to one favorable vote, 8,556 to 4,084. Those voters who wanted the school construction had only one choice — to vote for both the issuance of the school bonds and the twenty-year sales and use tax. There was a natural relationship between them. The two proposals were part of the same plan. They were united. If it were not for the proposed bond issue, the tax would have been only an “operating penny” tax subject to public initiative throughout its levy, and not a “bond penny” levied for twenty years.

Arvest contends that the chancellor’s ruling that the two proposals were completely separate should be affirmed because the last sentence of the sales tax proposal on the 1988 ballot provided: “It is proposed that the proceeds from the tax be used to finance a capital improvement program and economic development program (capital facilities) for the City.” The argument is without merit because the proposed $10,000,000 school bond issue was to be a part of the capital improvement program, and, if anything, this sentence would lead a voter to think the two proposals were linked. It is obvious that the City also thought the school bond issue was a part of its “capital improvement program” because its ordinance placing the “issuance of capital improvement bonds” on the ballot in 1990 stated:

The retirement of the bonds shall be secured by a pledge of all of the proceeds of such tax or such portion of such proceeds as shall be determined by the City to be adequate to obtain satisfactory ratings or insurance on the bonds. In addition, such proceeds may be pledged to secure the retirement of not to exceed $10,000,000 of educational facilities bonds of the City approved by the electors of the City at an election held on November 8, 1988.

The vote on the tax and the vote on the school district bonds were inextricably linked, and the school district bonds were, at the least, a primary purpose of the tax. Three years after the favorable vote on the two proposals, the City admitted that the proceeds from the tax could not be used to issue the $10,000,000 in school bonds. An illegal exaction occurs when the purpose of a tax cannot be accomplished and- the government retains the tax funds. Hartwick v. Thorne, 300 Ark. 502, 780 S.W.2d 531 (1989). We hold that an illegal exaction occurred when a primary purpose of the tax could not be accomplished and the collection of the tax was continued.

Because we hold the tax constitutes an illegal exaction, we reverse the ruling of the trial court and remand for the chancellor to enjoin further collection of the tax. In addition, the chancellor is instructed to conduct a hearing to award an attorney’s fee, see Ark. Code Ann. § 26-35-902 (1987), and to determine whether the City or the trustee now has any funds that rightfully belong to the taxpayers. If it develops that there are such funds, the chancellor should determine their disposition. The general rule is that funds which have been acquired through an illegal exaction are to be returned pro rata to the various taxpayers who initially paid them, but this case involves funds collected through a sales tax, and it is probable that the proof will show that it is impossible to determine, with any degree of economic certainty, who paid the taxes. Thus, it is probable that the funds, if any, cannot be refunded to the initial payers, and the chancellor must hold a hearing to determine how the funds are to be disposed. See City of Jacksonville v. Venhaus, 302 Ark. 204, 788 S.W.2d 478 (1990).

Reversed and remanded with instructions.

Hays, Glaze, and Corbin, JJ., dissent.

Tom Glaze, Justice,

dissenting. The lengthy and complex majority opinion boils down to the following simple issue: Did the citizens and voters of Fayetteville understand they were levying and pledging one penny of the city’s existing local sales and use tax for a capital improvement program? Four members of this court answer, “No,” and effectively set aside two Fayetteville elections where the voters of that city authorized a penny tax for such purposes. The trial judge and three members of this court say, “Yes, the Fayetteville voters did approve a tax for a capital improvements program.” You, as an interested reader, can decide for yourself merely by reading the two ballots that were presented to the Fayetteville electors at elections held on November 8, 1988, and May 29, 1990.

The first ballot giving Fayetteville voters an opportunity to vote for or against such a one penny sales and use tax for capital improvements was printed on the Washington County General Election Ballot on November 8,1988, and in pertinent part reads as follows:

As can be seen, all questions on the 1988 ballot were separated from each other by printed lines. The same is true regarding the sales and use tax and capital improvement question and the question pertaining to the school district bonds. The Fayetteville voter could separately vote for or against either of the two questions — the sales tax and capital projects question or the school bonds question. Instead, they voted for both, 60 % in favor of the tax and city’s capital improvements program and 68 % in favor of the Fayetteville School District’s educational facilities program.

Because the issuance of the bonds for school facilities was a primary purpose, the majority court suggests that the inclusion of the school bonds question on the 1988 ballot misled the Fayetteville voters into passing the city’s sales tax and capital improvements program. Such a suggestion is clearly not supported by the record. No such finding was made by the trial court, nor was evidence submitted to support that finding.

The city improvement project was made a part of the sales and use tax question, and that being so, the city improvement program was clearly the primary purpose of any sales taxes approved by the Fayetteville voters. Nonetheless, to avoid any argument that the voters could have been misled as to the purpose of any approved tax, the city placed its capital improvements program before the voters once again and this time in unmistakable detail. The following ballot was before the Fayetteville voters at a May 29, 1990 election:

As stated above, the city listed the foregoing menu of capital improvements, totaling more than $33 million, to assure the city voters that their one penny sales tax would be utilized for such city improvements, if approved. Obviously, if the voters thought they had been in any misled by their earlier 1988 ballot, they could have voted against any or all of the capital improvements offered them on the May 29, 1990 ballot. They did not.

While the parties in this appeal argue a number of issues, the majority opinion reverses the trial court only because the majority court suggests the vote on the tax and the vote on the school district bonds were inextricably linked, and the issuance of school district bonds was a primary purpose of the tax. The court then concludes the school bonds are illegal, and because they are invalid, the sales tax and capital project purposes must also fail. The majority court further suggests the city admits the tax proceeds cannot be used to issue the school bonds approved at the 1988 election.

Again, the sales tax involved here had a two-fold purpose in 1988 — city improvements and school construction — and clearly the capital improvement purpose was primary and approved by the voters, not once, but twice. If any doubt clouded the 1988 vote, Fayetteville voters removed those doubts when they unmistakably approved those city capital projects in 1990.

Finally, I do not read .the city’s argument on appeal to admit the sales and use tax proceeds cannot be utilized to issue the $10 million in school bonds. However, even if such school bonds would be invalid and could not be issued (which I am inclined to believe), that conclusion under the facts of this case does not defeat the sales tax and city capital improvement bonds approved by the Fayetteville voters.

We do Fayetteville voters a real disservice by assuming, without proof, that they did not know what they were doing when casting their ballots at the 1988 and 1990 elections. This case does not involve a city government that, by intention or deed, exercised bad faith or misled the electorate into approving a sales tax and issuance of bonds without first having an intelligible vote on such questions. The voters are entitled to the city projects they approved even though the school district projects may prove invalid. Accordingly, I would affirm the trial court’s decision.

847 S.W.2d 41

John Lile, for appellant.

Friday, Eldredge & Clark, by: Larry W. Burks and Jeffrey H. Moore, for appellee Arvest trust Company.

Jerry E. Rose, Fayetteville City Attorney, for appellee.

SUPPLEMENTAL OPINION ON DENIAL OF REHEARING MARCH 9, 1993

Robert H. Dudley, Justice.

On petition for rehearing, the City of Fayetteville and Arvest Trust Company, N.A., contend in separate petitions that the majority opinion contains both factual and legal errors. The facts stated in the majority opinion are correct, and we need not discuss the facts.

The petitions also allege that the majority opinion contains a legal error because it misapplies the case of Hartwick v. Thorne, 300 Ark. 502, 780 S.W.2d 531 (1989). The facts in Hartwick were that, in 1975, the citizens of North Little Rock approved an ad valorem tax sufficient to pay the principal and interest on $2,605,000 in bonds issued for the construction of public improvements. The election was called, and the bonds were issued pursuant to Amendment 13 to the Constitution of Arkansas, which has now been repealed by Amendment 62. The city ordinance calling for the election and the ballot title both specifically proposed the construction of a drainage canal as a part of the public improvements.

The City commenced construction of all the improvements except the canal, which was to be constructed with the assistance of the federal government. At that time, 1976, the City placed $700,000 of the bond proceeds in a special account for the City’s share of the cost of the canal. The interest earned was to remain in the account.

The other improvements were completed, but several years later, the United States Army Corps of Engineers determined that the canal was not feasible and the United States would not share in the cost of construction. In 1987, twelve years after the collection of the tax had commenced, the City sought to use the $700,000 principal, plus the $1,100,000 in accrued interest, for the construction of curbs and gutters and published an ordinance to that effect. Some taxpayers filed suit that same year, 1987, and sought a refund of the $1,800,000 in principal and interest.

The taxpayers did not seek to stop the collection of the tax for perhaps either of two reasons. First, after so many years, the bond issue may have been paid in full and the tax collections may have ceased. The opinion does not expressly state that such was the case, but the opinion clearly implies that it was the case because it provides: “The Bell opinion was almost directly on point with respect to the present case when it stated: ‘[W]e have held that the taxpayers, in instances of bond surpluses accumulating as a result of the retirement of the original bond issue, are entitled to a refund.’ ” Id. at 509, 780 S.W.2d at 534 (emphasis supplied). Second, even if the bond issue had not been paid in full at the time the taxpayers filed the suit for the refund, they may well have determined that they would be estopped from contesting the tax after so many years. See Lawrence County v. Townsend, 202 Ark. 887, 154 S.W.2d 4 (1941). After a trial on the merits, the chancellor ruled that an illegal exaction had occurred and ordered a refund. We affirmed and held that an illegal exaction occurs when the purpose of a tax cannot be accomplished and the government retains the tax funds. In the case at bar, we correctly cited Hartwick for the proposition that an illegal exaction occurs when a primary purpose for a tax cannot be accomplished.

In this case, the City of Fayetteville inextricably linked the vote on the tax with the bonds to be issued to finance buildings for the local school district. The school district bonds were a primary purpose of the tax. The City decided not to issue bonds to construct or finance buildings for the local school district. The taxpayers filed this suit to enjoin the future collection of the tax within the same year that the City made it known that it would not issue bonds to construct or finance buildings for the local school district. The taxpayers filed this suit to enjoin the future collection of the tax. We held the injunction should issue.

The petitioners for rehearing contend the holding is inconsistent with Hartwick v. Thorne because, they contend, under that case we should have only enjoined the collection of that portion of the sales tax which would have been required to pay the estimated debt service on the bonds to have financed the school buildings. The argument is without merit for a number of reasons, but the primary one is that Hartwick v. Thorne simply does not contain a holding about when an injunction against a tax should or should not issue. The taxpayers in Hartwick v. Thorne did not ask for an injunction against further collection of the tax, the trial court did not rule on such an issue, and we made no holding on such an issue. The opinion in that case discussed a remedy in light of a “surplus accumulating as a result of the retirement of the original bond issue.”

In the case at bar, the vote for or against the tax was inextricably linked to the bonds to finance buildings for the local school district. Those who voted in favor of the tax solely or primarily in order to finance or construct buildings for the local school district were misled. Soon after they discovered that they had been misled, they filed this suit to enjoin further collection of the tax. They are entitled to such relief. See Arkansas-Missouri Power Co. v. City of Rector, 214 Ark. 649, 217 S.W.2d 335 (1949). This is not a case involving a surplus accumulating as a result of the original bond issue.

Petition for rehearing denied.

Hays and Glaze, JJ., dissent.

Tom Glaze, Justice,

dissenting. The majority tries to distinguish Hartwick by surmising that the bond issue there may have been paid in full and the tax collections may have ceased by the time the taxpayers brought suit to obtain a refund for the one purpose, a drainage canal, which had not been constructed because it became infeasible. Even if the majority court’s guesswork in reading this assumption into the Hartwick opinion were true, it fails to answer the issue here. Nor is an answer to the issue here found in the majority’s recital that Hartwick stands for the proposition that an illegal exaction occurs when a primary purpose of a tax cannot be accomplished.

Here, the trial court made no finding that Fayetteville voters were misled and to the contrary, it spelled out in its order that the ballot contained twenty-two separate issues and the voters voted separately on each one. Yet, the majority in this appeal makes the finding of fact that the Fayetteville voters were misled. The court mentions no evidence to support its finding because there is no such evidence. Again, I suggest the Fayetteville voters read and understood the ballots which separately reflected each construction project issue and the exact amount each project would cost. If any project failed — as was the situation in Hartwick — the taxpayers would be effectually refunded that amount. If the monies were already collected, the funds would be remitted. If such funds had not yet been collected, then the court would enjoin collection of that portion of the sales tax required to pay the debt service on the failed project. In any event, like in Hartwick, this court’s decision finding the $10 million construction of education facilities illegal should not impair the other improvement projects, especially where, as here, the voters separately voted and approved each issue. The court should limit its holding to enjoining the collection of that portion of taxes required to pay the debt service on the $10 million improvement project for the school district.

Although Justices Hays and Newbern took a more expansive view than did the majority in Hartwick, I think the concerns they expressed in their dissent are worth repeating here. Therein, they expressed their beliefs that North Little Rock should still be allowed to use the funds that the voters approved for the canal project for the other purposes stated in the ballot title. My colleagues Hays and Newbern wisely expressed their fear that the Hartwick decision might be misapplied in the future. They stated the following:

[W]e find nothing at all wrong with using the $700,000 plus the accumulated interest for street improvements in the Rose City area which would presumably have benefitted from the canal. Such a holding would not mean that a city government could hoodwink voters by intentionally promising that which it had no intention of delivering. Again, that is not an issue in this case, and [we] fear the precedent we will set by returning the bond money to the taxpayers instead of allowing it to be used for a purpose stated in the ballot title will haunt us. While the disappointment of those who hoped for the construction of the canal is understandable, [we] conclude that the city’s proposed use of the bond money for one of the purposes stated in the ballot title does not constitute an illegal exaction.

This court has in the present case misapplied the Hartwick holding in a manner I find worse than Justices Hays and Newbern predicted. We should correct our error now, not later, by granting the appellees’ petitions for rehearing.

Hays, J., joins this opinion.

       If both the city improvements program and school district construction project failed to obtain voter approval or failed for other legal cause, the tax approved by the voters could not be collected and use for any other purpose, and the taxpayers are then entitled to a refund. Hartwick v. Thorne, 300 Ark. 502, 780 S.W.2d 531 (1989).