text:
    William E. HENSLEE, Katherine L. Henslee, Stephen A. Wilson, and Lois M. Napper v. MADISON GUARANTY SAVINGS AND LOAN ASSOCIATION
    88-45
    760 S.W.2d 842
    Supreme Court of Arkansas
    Substituted opinion delivered January 9 1989.

      Crockett and Brown, P.A., by: Robert J. Brown, for appellants William E. Henslee, Katherine L. Henslee, Stephen A. Wilson, and Lynn R. Wilson.

      Steven Napper, Ltd., by: Steven Napper, for appellant Lois M. Napper.

      Cuffman & Cuffman, by: Phillip Cuffman, for appellee.
   Jack Holt, Jr., Chief Justice.

This appeal involves two issues: (1) whether under the facts of this case a one percent (1 %) commitment fee constituted interest which, when added to the interest on a particular loan, tainted the transaction with usury; and (2) whether the adoption of Amendment 60 to article 19, § 13 of the Arkansas Constitution had the effect of repealing Ark. Code Ann. §§ 4-57-106 and 4-57-107 (1987). We find that both issues require an affirmative response.

Separate appellants William and Katherine Henslee and Stephen and Lynn Wilson obtained a $121,600.00 three-year loan from appellee Madison Guaranty Savings and Loan (“Madison”) in order to fund the purchase of a building. Interest on the loan was at a fixed rate of twelve and one-half percent (12.5%) per annum — the maximum legal rate at the time. Before closing the loan, Madison required payment of a one percent (1 %) commitment fee. Sometime later, the Henslees and Wilsons defaulted on the loan. Madison then filed suit to foreclose its mortgage lien on the property. Separate appellant Lois M. Napper had a second mortgage lien on the same property and was joined as a party.

The Henslees, the Wilsons, and Napper filed counterclaims in the Madison suit alleging that the commitment fee constituted interest which, when added to the 12.5 % interest, tainted the loan transaction with usury. Napper also requested that her lien be declared superior to that of Madison by virtue of Ark. Code Ann. § 4-57-107(b) (3). The trial court concluded that the commitment fee did not make the loan usurious and that the Napper lien remained inferior to that of Madison. A foreclosure decree was then entered. From that order comes this appeal.

Appellants first argue that the chancellor erred in his determination that the commitment fee did not make the Madison loan usurious. Next, it is argued that the adoption of Amendment 60 to article 19, § 13 of the Arkansas Constitution neither expressly nor by implication repealed our code provisions on usury and interest, which in part allowed second lien creditors such as Napper to assert priority over liens securing usurious agreements.

We find that the chancellor’s determination with regard to the issue of usury was clearly against a preponderance of the evidence. In doing so, we conclude that Napper’s lien remains inferior to Madison’s as we find that Amendment 60 repealed Ark. Code Ann. § § 4-57-106 and 4-57-107(1987) by implication. We therefore reverse and remand for proceedings not inconsistent with this opinion.

On appeal, this court reviews chancery cases de novo on the record. We do not reverse unless the chancellor’s findings are clearly erroneous. Milligan v. General Oil Co., 293 Ark. 401, 738 S.W.2d 404 (1987).

Appellant Bill Henslee first discussed the loan in April 1985 with Don Denton, chief loan officer for Madison. Sometime in May 1985, Henslee sent Denton a loan application which apparently proposed a “one point interest” “fee paid to lender.” It is unclear from the record what part Henslee’s application played in the subsequent loan transaction. However, Denton testified that during negotiation of the loan it was emphasized to Henslee that Madison would require a one percent (1 % ) commitment fee for taking the market risk of funding a fixed interest loan at some future date. Denton’s testimony included the following:

The purpose of my collecting the 1 % was to pass on the risk that interest rates might go up and you would have a fixed rate loan. [Emphasis ours.]

According to Denton, Henslee was told there would be a 30-day period between acceptance of the commitment and closing of the loan.

Denton also testified that commitment fees were not charged on all of Madison’s loan transactions; rather, only commercial loans that would be on the books for an extended period of time. Finally, Denton testified that commitment fees were only required in cases where the loan would be funded some time after the commitment, not in cases where loans were funded on or about the same day Madison agreed to make the loan.

On the other hand, Henslee denied that during negotiation of the loan Denton ever mentioned that Madison would require payment of a one percent commitment fee; though this testimony is at variance with the proposal contained in Henslee’s application and with the testimony of Don Denton. In any event, Henslee received a letter from Madison on or about June 19 which included the following language:

We are pleased to extend a commitment for a loan in the amount of $121,600.00 for the purchase of real property .... This loan will be amortized over twenty-five years with a three-year balloon at 12½% rate.
Prior to closing and funding of this loan... a fee in the amount of $ 1,216.00 will be due for this commitment. This commitment fee cannot be funded from proceeds of the loan. Your check for this amount will be appreciated.
Upon the receipt of this commitment fee, final instructions will be given ... for closing.

Despite obvious discrepancies in the testimony as to when Henslee first knew Madison would require a commitment fee, the commitment letter itself fails to reflect the claimed market risk of funding a fixed interest loan at some future date and, as the record clearly shows, Henslee paid the commitment fee immediately upon receipt of the letter and the loan was closed on the same afternoon. It was funded on or about June 20, and the mortgage was filed on or about June 24. Therefore, whatever the negotiations between the parties may have been, the net result was spelled out in the Madison commitment letter of June 19— the loan would not be closed or funded until Henslee paid a one percent (1%) commitment fee.

At the time the loan was made, the federal reserve discount rate was seven and one-half (7.5%) percent. Amendment 60 to Article 19, § 13 of the Arkansas Constitution provided that the maximum legal rate of interest was five percent (5%) above the federal discount rate. Therefore, the loan was for the maximum lawful rate of interest — twelve and one-half percent (12.5%).

The first issue we must address is whether the one percent (1 %) commitment fee can be considered as additional interest on this loan. In Arkansas Savings and Loan Association v. Mack Trucks of Arkansas, 263 Ark. 264, 566 S.W.2d 128 (1978), the loan amount was $340,000.00, which was secured by a mortgage. Arkansas Savings, the lender, made periodic disbursements of the loan proceeds and at one point disbursed to itself $3,400.00 as a “service charge.” This charge was later characterized as a “commitment fee.” The fee was for the stated purpose of “the lender binding itself ‘absolutely and unconditionally to make said loans and advances.’ ” The chancellor determined that the commitment fee was interest which, when added to the interest on the loan, made the agreement usurious. We affirmed.

In Mack Trucks this court cited Sosebee v. Boswell, 242 Ark. 396, 414 S.W.2d 380 (1967), for the principle that “the moneylender cannot impose upon the borrower charges that in fact constitute the lender’s overhead expenses or costs of doing business.” We said in Mack Trucks that the commitment fee constituted a discount — the taking of interest in advance. The commitment fee amounted to interest because it was nothing more than the lender’s overhead or cost of doing business — which the lender could not pass on to the borrower. Because the fee was interest, and because that interest when added to the interest on the loan exceeded the maximum allowable under law, the loan was usurious.

To distinguish Mack Trucks, appellee Madison points out that there the lender apparently charged a one percent fee on all commercial type loans, and that the fee was paid out of the proceeds of the loan. Neither fact is present in the case at bar. However, Madison has failed to provide persuasive reasoning as to why these factors would serve as a valid distinction. The testimony shows that Madison charged commitment fees on many of its loans. Further, we see little difference between the situation where the loan amount is reduced because the creditor disburses to itself a 1% fee out of the loan principal or the situation where the borrower pays the commitment fee out of his own pocket prior to funding of the loan. In either case, the creditor is “passing on” the cost of doing business to the borrower, which we held in Mack Trucks could not be done under the circumstances without running afoul of the proscription against usurious loans.

The issue was later addressed in First National Mortgage Co. v. Arkmo Lumber & Supply Co., 277 Ark. 298, 641 S.W.2d 31 (1982). In an opinion by former justice George Rose Smith, we again affirmed the chancellor’s determination that a loan agreement and mortgage were tainted by usury because of a requirement in the note that the “signers hereby agree to pay 1% commitment fee.” Citing Mack Trucks, this court stated:

We have held that a commitment fee, assessed by the lender for its readiness to have the total amount of a... loan available when needed, is in fact part of the lender’s cost of doing business and must be treated as interest if charged to the borrower.

Nothing we said in Arkmo suggested that the lender must require commitment fees on all loans, nor was there any mention of a requirement that the fee be paid out of the loan principal. Madison basically argues that Arkmo is an unwarranted extension of our decision in Mack Trucks. No convincing argument is made to support that contention.

Madison’s agent and representative, Don Denton, candidly conceded that the one percent commitment fee is normally assessed simply to pass on to borrowers the risk assumed by Madison that its costs might change as to a fixed interest three-year loan which would not be funded until some future date. Here, however, no future date was specified. Although there is some testimony that timing of the closing date was geared to Henslee’s need for immediate funds, the commitment letter on its face demonstrates that payment of the commitment fee would be contemporaneous with Madison’s act of closing and funding of the loan. Accordingly, there was no risk, and Madison did no more than take interest in advance, which when added to the interest stated on the loan agreement made the loan usurious. To that extent, the chancellor’s judgment must be reversed.

It now remains to determine the effect of our conclusion that the loan agreement was tainted by usury. Before the adoption of Amendment 60, article 19, § 13 of the Arkansas Constitution provided:

All contracts for a greater rate of interest than ten percent per annum shall be void, as to principal and interest, and the General Assembly shall prohibit the same by law ....

Pursuant to the requirement that the General Assembly prohibit all such contracts, the legislature enacted Ark. Stat. Ann. §§ 68-601 — 68-614 (Supp. 1985), now compiled as Ark. Code Ann. §§ 4-57-101 — 4-57-108 (1987), which govern interest and usury in commercial law.

Amendment 60 changed the law, however, and article 19, § 13 of the Arkansas Constitution now provides that the maximum rate of interest on any contract entered into shall not exceed five percent (5 %) per annum above the federal discount rate. Further:

All such contracts having a rate of interest in excess of the maximum lawful rate shall be void as to the unpaid interest. A person who has paid interest in excess of the maximum lawful rate may recover... twice the amount of interest paid.

The express intent of Amendment 60 is that the taint of usury voids the agreement only to the extent of unpaid interest — persons who have paid interest in excess of the maximum lawful rate may recover twice the amount of interest paid. Amendment 60 further provides:

The provisions hereof revoke all provisions of State law which establish the maximum rate of interest chargeable in the State or which are otherwise inconsistent herewith. [Emphasis ours.]

The issue at this point is the effect of Amendment 60 on existing code provisions which allow second lien mortgage creditors such as Lois Napper to gain priority over Madison’s lien upon a finding that Madison’s agreement was tainted by usury. Ark. Code Ann. § 4-57-107(a)(l) (1987) provides that every “lien created or arising by mortgage ... to secure the payment of a [usurious] contract... is void.” Subsection (b)(3) then provides:

Any creditor [Napper] whose debtor [Henslees and Wilsons] has given a lien by mortgage ... to secure the payment of a usurious contract may bring his suit in equity against the parties to the usurious contract [debtors and Madison] and recover judgment for his debt against the debtor, and a decree cancelling and annulling the usurious lien ....

Ark. Code. Ann. § 4-57-106 (1987) provides:

All bonds, bill, notes, assurances, conveyances, and all other contracts or securities whatever, whereupon there is reserved, taken, or secured, or agreed to be taken or reserved, any greater sum or greater value for the loan or forbearance of any money ... than is prescribed [by law] shall be void.

Madison contends that our code provisions on usury and interest present an irreconcilable conflict with the intent of Amendment 60 that the taint of usury affects only the unpaid interest, whereas section 4-57-107 would void the lien underlying the contract, and section 4-57-106 would void the contract itself. Napper, on the other hand, argues that the legislature could not have intended that parties clearly protected under the laws enacted prior to Amendment 60 should now be without a remedy and that the only purpose of the Amendment was to change the lawful rate of interest.

Our case law provides that the adoption of a particular constitutional amendment does not necessarily have the effect of invalidating every act of the General Assembly bearing upon the subject, particularly those passed prior to the effective date of the amendment, if they are not in irreconcilable conflict with or repugnant to the amendment. McKenzie v. Burris, 255 Ark. 330, 500 S.W.2d 357 (1973). An existing statute is therefore superseded by a subsequent constitutional amendment only when the legislature so provides, or where there is an irreconcilable conflict or the statute is necessarily repugnant to the new constitutional provision. Id. at 341. In this regard, a basic and fundamental rule when considering the effect of both statutes and constitutional amendments is that repeal by implication is not favored and is not allowed except where there is a repugnancy between the former and later such that both cannot stand together. Id. at 341-342.

When we consider the pre-Amendment 60 mandate of article 19, § 13 that usury voids contracts both as to interest and principal, it becomes clear that sections such as 4-57-106 and 4-57-107 were enacted to provide for the obvious; namely, all bonds, bills, notes, assurances, conveyances, contracts, or securities of any kind taken in excess of the lawful rate of interest would be void, and liens securing the applicable agreements could be voided by inferior lien creditors. Those remedies are clearly and necessarily repugnant to the stated provision of Amendment 60 that contracts in excess of the maximum lawful rate of interest are void only as to unpaid interest.

The provisions of Amendment 60 and the remedies provided by our code provisions on usury and interest simply cannot stand together. We therefore conclude that Amendment 60 by implication repealed Ark. Code Ann. §§ 4-57-106 and 4-57-107.

The chancellor’s determination that the Madison loan agreement was not tainted by usury is reversed. We remand for further proceedings and assessments under Amendment 60 not inconsistent with this opinion.

Reversed and remanded.

Purtle and Hays, JJ., dissent.

Steele Hays, Justice,

dissenting. On appeal, we review chancery cases de novo reversing the chancellor only when the findings of fact are found to be clearly erroneous or clearly against the preponderance of the evidence. And since the question of the preponderance of evidence turns to a large extent on the credibility of the witnesses, we should give deference to the chancellor. Milligan v. General Oil Co., 293 Ark. 401, 738 S.W.2d 404 (1987); Jackson v. Farm and Commercial Properties, 284 Ark. 130, 680 S.W.2d 105 (1984); Pirtle v. Opco, Inc., 269 Ark. 862, 601 S.W.2d 265 (1980); Hackworth v. First National Bank of Crossett, 265 Ark. 668, 580 S.W.2d 465 (1979). The majority disregards this well settled principle of law, and therefore I must respectfully dissent.

The only element in this case which even remotely taints the transaction as usurious seems to be the closeness in time in which the payment of the commitment fee and the closing of the loan occurred. The commitment fee constituted a totally separate transaction which was not paid out of the proceeds of the loan as in Ark. S & L Assn. v. Mack Trucks of Ark., 263 Ark. 264, 566 S.W.2d 128 (1978). Testimony indicated that Harry Don Denton, chief lending officer at Madison Guaranty, discussed the requirement of the commitment fee prior to the closing of the loan and in fact sent a letter to William Henslee on June 19th detailing the terms of the commitment fee arrangement. The chancellor, in the superior position to judge the credibility of the witnesses, found that Henslee did know about the requirement of the payment of a commitment fee and that he was under no obligation to close the loan so soon after the payment of this fee.

The commitment fee was not paid out of the proceeds of the loan, nor was the commitment fee arrangement recited in the note which so obviously ties the loan and the fee together as in First Nat’l Mtg. Co. v. Arkmo Lbr. & Supp. Co., 277 Ark. 298, 641 S.W.2d 27 (1982). Here the transactions were separate and distinct.

In Mack Trucks, citing Sosebee v. Boswell, 242 Ark. 396, 414 S.W.2d 380 (1967), we discussed the principles which determine when additional charges, namely, a service charge/ commitment fee, constituted interest. The first principle was that any profit extracted by the lender which depended upon a contingency not within the control of the debtor constituted interest. The second principle stated that the moneylender could not impose upon the borrower charges that in fact constitute the lender’s overhead expenses or costs of doing business or else such charges were deemed to be interest.

In discussing this second principle, the costs of doing business, the court focused on whether the lender, Arkansas Savings and Loan, as a matter of course charged a one percent commitment fee on all of its loans — construction, long term and residential loans. In finding that the one percent commitment fee applied across the board to various Arkansas S&L’s loans the court stated “this is no more than the collection from the borrower of a part of the lender’s overhead or expense of doing business.” Therefore, in Mack Trucks the court determined that a commitment fee paid out of the proceeds of the loan, by a lender who, regardless of the type of loan, charges the one percent commitment fee, constituted interest, and when added to the stipulated interest fee of the loan, the loan was usurious.

Subsequently, in First National Mortgage Co. v. Arkmo Lumber & Supply Co., 277 Ark. 298, 641 S.W.2d 31 (1982), this court held that a commitment fee not charged separately at the outset but recited in the note inextricably tied the note and the commitment fee together, and thus the commitment fee could be considered interest and when added to the loan interest rate, the loan was usurious.

The majority opinion said:

We have held that a commitment fee, assessed by the lender for its readiness to have the total amount of a construction loan available when needed, is in fact part of the lender’s cost of doing business and must be treated as interest if charged to the borrower.

The majority apparently equates Madison Guaranty’s assessment of a commitment fee for agreeing to grant the loan at a later date on certain terms and conditions as passing on the cost of doing business. If this is indeed its position, then it seems that the majority believes that a commitment fee per se should be considered as interest because it inevitably passes on the lender’s cost of doing business. However, the majority opinion only hints at this reasoning.

The facts of this case certainly distinguish it from both Mack Trucks and Arkmo in that the commitment fee was not paid from the proceeds of the loan, nor was the recitation of the commitment fee inextricably bound up with the note, and Madison Guaranty did not charge this one percent commitment fee as a matter of course on all its loans. Therefore, the only possible taint of usuriousness would be the proximity of the time between the closing of the loan and the payment of the commitment fee. The closeness was not the intention of the bank, but rather at the insistence of the customer.

The majority states that the June 19th letter to Henslee “on its face demonstrates that payment of the commitment fee would be contemporaneous with Madison’s act of closing.” This letter on its face only states that prior to the closing of the loan, this commitment fee must be paid and once the fee is paid, instructions for the closing will be given. I can find no basis for the majority’s deduction that this letter anticipated a contemporaneous payment of the commitment fee and the closing of the loan. In fact, the chancellor found that the closing so close in time to the payment of the commitment fee was for Henslee’s benefit and the testimony of Mr. Denton that “it was my understanding that the loan would be funded some date in the future,. . . but I certainly did not anticipate that it would be funded the next day,” was deemed credible by the chancellor.

Despite citing language from Arkmo the majority shys away from stating that a commitment fee per se constitutes interest because it is simply the lender passing off its costs of doing business to the borrower. In fact, the majority opinion states that because of the closeness in time, the bank undertook no business risk, and thus had no risk to pass onto the borrower. Yet, the majority ignores the reason for the closeness as well as the chancellor’s determinations as to credibility. The majority leaves open the possibility that under the right circumstances — keeping the commitment fee and the loan separate as in this case — but without such closeness in time, that a commitment fee may be charged by a lender without constituting interest. However, what would be an appropriate length of time so as not to be deemed too close? Today’s holding is an invitation for a case in which an arbitrary distinction will have to be drawn as to what exactly is too close in time.

Purtle, J., joins this dissent.


source: Caselaw Access Project

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

license: Public Domain

text:
    Gene RIDGEWAY v. Donald RAY; Steve Scudder; Jackson County Democratic Party, Its Officers; Fred Pickens, Secretary; Sam Wheeler, Chairman; Jackson County Republican Party, Its Officers; Billy Ivy, Secretary; and Paul Clayton, Chairman
    88-204
    760 S.W.2d 848
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      Joe Peacock and Robert Meurer, for appellant.

      Sam Boyce, for appellee.
   Jack Holt, Jr., Chief Justice.

On January 26, 1988, appellant Gene Ridgeway filed a petition requesting that separate appellees Donald Ray and Steve Scudder be declared ineligible as candidates for their respective party primaries because they failed to file the requisite political practice pledges “in person” before the county clerk in violation of Ark. Code Ann. § 7-6-102 (1987). Ridgeway further requested a writ of prohibition prohibiting the separate appellee political parties and their officers from certifying Ray and Scudder as candidates.

The trial court determined that section 7-6-102 does not require that candidates file their petitions “in person” and that political practice pledges had been timely filed on behalf of Ray and Scudder. Accordingly, the petition for writ of prohibition was denied. Ridgeway argues the court erred in its interpretation of section 7-6-102. We disagree and affirm.

Section 7-6-102(a)(l) in relevant part provides:

Candidates ... for county, municipal, or township offices shall file with the county clerk ... a pledge in writing, stating that they are familiar with the requirements of §§ 7-1 -103,7-1 -104,7-3-108, and 7-6-101 — 7-6-104 and will, in good faith, comply with their terms.

On the issue before us, the trial court’s findings and judgment can be summarized as follows:

(1) . Donald Ray signed and filed his political practice pledge with Betty Boyd, the elected assistant secretary of the Jackson County Democratic Party, who in turn filed Ray’s documents with the Jackson County Clerk within the time prescribed by law.
(2) . Steve Scudder signed and filed his political practice pledge with Billy Ivy, the secretary of the Jackson County Republican Party, who in turn, with the party chairman, filed Scudder’s documents with the Jackson County Clerk within the time prescribed by law.
(3) . If the legislature had intended to require a candidate for political office to appear only in person, and not by designated representation, the legislature should have so stated.
(4) . Public policy suggests that, when possible, the law, as well as party rules, should be interpreted to encourage, rather than to discourage, participation by the electorate in the political process.
(5) . The obvious purpose of the applicable statute is to insure that a prospective candidate has in fact signed the required documents to qualify as a candidate for office, has complied with the rules prescribed by the particular political party, and that the documents required by law have been timely filed in the county clerk’s office.
(6) . The evidence reflects that the purpose and requirements of the law were met by the defendants, and that plaintiff’s petition should be denied.

The record clearly supports the trial court’s findings of fact. Further, we find no fault with the court’s rationale and conclusions of law. Nowhere in section 7-6-102 is there a requirement that candidates file their political practice pledges in person, nor has appellant Ridgeway offered any convincing argument or citation of authority to show otherwise.

Affirmed.

Hickman and Glaze, JJ., concur.

Tom Glaze, Justice,

concurring. Because the appellant filed an improper action, I would not reach the issue raised in this appeal even though I agree with the majority’s interpretation of Ark. Code Ann. § 7-6-102 (1987).

Appellant petitioned for a writ to prohibit the Jackson County Democratic Committee from certifying Donald Ray and Steve Scudder as candidates and from printing their names on the ballots for the 1988 Democratic Primary Elections. A writ of prohibition, of course, is an extraordinary writ and is only granted against a lower court which is wholly without jurisdiction of the subject matter. The remedy lies when there are no disputed facts, where there is no remedy otherwise, and the writ is clearly warranted. See Miller v. Lofton, 279 Ark. 461, 652 S.W.2d 627 (1983). Appellant here sought prohibition against the Jackson County Democratic Committee, not a court. Clearly, appellant, in these circumstances, sought the wrong remedy and for this reason alone, his petition should have been dismissed.

Appellant’s remedy was one of mandamus, an action in which he could have alleged that Ray and Scudder failed to comply with § 7-6-102 and therefore, the Democratic Committee should be compelled to omit the printing of Ray’s and Scudder’s names on the primary election ballots. Of course, under the court’s interpretation of § 7-6-102, appellant’s request for a mandamus against the Jackson County Democratic Committee would also be denied because this court’s interpretation of § 7-6-102 is that Ray and Scudder had complied with the terms of that statute. However, I write this concurring opinion to point out that the court was not obliged to reach the merits of appellant’s argument and his argument could have failed even if he had stated sufficient facts to have shown noncompliance with the requirements of § 7-6-102. See Stillinger v. Rector, 253 Ark. 982, 490 S.W.2d 109 (1973) (where this court held the names of certain candidates should have been omitted from the general election ballots because they failed to file their political practice pledges with the city clerk within the time provided by law).

For the foregoing reasons, I concur.


author: Darrell Hickman, Justice.

text:
    Alvin FLAHERTY, Lonnie Flurry, and Glenn Sexton v. STATE of Arkansas
    CR 88-69
    761 S.W.2d 167
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      J. Randolph Shock, for appellant Lonnie Flurry; John R. VanWinkle, for appellant Alvin Flaherty; and Gary D. Person, for appellant Glenn Sexton.

      Steve Clark, Att’y Gen., by: Theodore Holder, Asst. Att’y Gen., for appellee.
   Darrell Hickman, Justice.

We affirm this appeal from an order denying relief under A.R.Cr.P. Rule 37.

The three appellants were charged with capital murder in the shooting death of Wayne Lanier. On January 29,1986, they pled guilty to the reduced charge of first degree murder and each received a forty year sentence.

In 1987 they filed petitions for postconviction relief, asserting numerous reasons for setting aside their pleas. The issues we deal with are whether a factual basis existed for the guilty pleas, whether the pleas were voluntary, and whether Glenn Sexton was denied effective assistance of counsel. After a hearing, the trial court denied the relief requested. We affirm.

It is significant that the appellants put on no evidence at all to support their petitions. The record of the plea hearing reflects that the court asked the prosecutor what evidence the state had against the three defendants. He also asked the appellants’ attorneys if a factual basis existed and they replied that it did. But the appellants claim the court failed to comply with A.R.Cr.P. Rule 24.6 since they were not asked if they were pleading guilty because they were in fact guilty.

As we point out in Furr v. State, decided this same date, the better practice is to ask the accused if he committed the acts with which he is charged. But failure to do so will not automatically result in setting aside a guilty plea. A.R.Cr.P. Rule 24.6 contains no requirement that the accused be addressed personally.

A factual basis for the guilty pleas can be supplied at the Rule 37 hearing. Branham v. State, 292 Ark. 355, 730 S.W.2d 226 (1987). At the Rule 37 proceeding in this case, the state introduced the written statement of a witness to the crime, Charles Henson. The statement clearly implicated all three appellants.

The appellants objected to the use of Henson’s statement claiming it was hearsay. They misunderstand a Rule 37 hearing. It is not a trial. The petitioners have the burden of proof — -not the state. The petitioners offered no proof. Actually, Henson’s statement was not hearsay; it was not presented to show the truth of Henson’s accusations. It was presented to show that had the defendants stood trial, evidence was available to convict them. A.R.E. Rule 801(c). All the defendants knew of Henson’s statement and it affected their decision to plead guilty. We uphold the trial judge’s finding that a factual basis existed.

The trial judge must also determine if the plea is voluntary. He must ask the defendant whether any force or threats, or any promises, apart from the plea bargain, were used to induce the plea. A.R.Cr.P. Rule 24.5. But substantial compliance with the rule is all that is necessary. If there are deficiencies in the record of the plea hearing, they can be remedied at the Rule 37 hearing. Reed v. State, 276 Ark. 318, 635 S.W.2d 472 (1982).

At the sentencing hearing, the judge asked the defendants if they understood the nature of the charges against them and the terms of the plea bargain. Each answered yes. Before entering their pleas in court, each defendant had also signed a plea statement in which it was asked, “Are you entering your plea of guilty on your own free will and accord without anyone causing you to do so on account of any promises or threats?” All signed the statement, answering yes. At the hearing, the judge asked the men if they understood the statements and had discussed them with their attorneys. Again, they answered yes. None of this was refuted at the Rule 37 hearing.

In Simmons v. State, 265 Ark. 48, 578 S.W.2d 12 (1979), the plea statement and the appellant’s acknowledgment that he understood the charges and the plea arrangement were sufficient to show the plea was voluntary. There is an even stronger case against these petitioners.

First, the three attorneys for the petitioners, all experienced lawyers, said their initial strategy was to attack the weaknesses in the state’s case. But when the Charles Henson statement came to light, the strategy changed and the appellants decided to plead guilty to a reduced charge. They said that Henson’s statement and the desire to avoid the death penalty inspired the guilty pleas.

The burden was on the petitioners to prove their allegations for postconviction relief, and we will not overturn the trial court’s finding unless it is clearly wrong. Branham v. State, supra; Robbins v. State, 288 Ark. 311, 705 S.W.2d 6 (1986). Considering the lack of evidence presented by the appellants, we cannot say the trial court’s ruling was wrong.

Finally we consider appellant Sexton’s allegation of ineffective assistance of counsel. He has the burden of showing a reasonable probability that, but for counsel’s errors, he would not have pled guilty but would have insisted on going to trial. Hill v. Lockhart, 474 U.S. 52 (1985); Garmon v. State, 290 Ark. 371, 719 S.W.2d 699 (1986).

Sexton claimed his attorney, Franklin Wilder, was ineffective for a number of reasons. But again, he offered no evidence.

Wilder denied that he had failed to discuss the case with his client or to file motions on his behalf. He said he had talked with Sexton numerous times and filed several motions in preparation for trial. He also filed motions to secure medical treatment for Sexton who was suffering from tuberculosis.

Sexton claimed he was erroneously told his entire criminal record, including convictions more than ten years old, could be introduced into evidence should he go to trial. Wilder denied this but noted they discussed the prosecution’s possible use of more recent convictions. Wilder also denied he misinformed Sexton on parole eligibility.

Sexton claimed that Wilder failed to explain the habitual offender act to him but does not say how this affected his decision to plead rather than go to trial. The same is true of the allegation that Wilder did not understand the plea was made to first degree murder rather than capital murder. Wilder admitted he thought the charge was still capital murder. But Sexton has not shown what bearing this had on his decision to plead.

The assertion that all the attorneys worked together rather than pursuing the interest of their individual clients is not borne out by Wilder’s testimony or that of the other lawyers. Sexton claims Wilder failed to check on Charles Henson’s availability to testify at trial. There is nothing in the record to indicate Wilder had any reason to believe Henson would be unavailable.

Affirmed.

Purtle, Dudley and Newbern, JJ., dissent. See dissenting opinion in Furr v. State, No. CR 87-42, decided this date.


author: John I. Purtle, Justice.

text:
    Larry T. BENNETT and Dorothy Bennett v. Gregory Don TROUT and Jo Lavonne Trout
    88-177
    760 S.W.2d 850
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      McDaniel & Wells, P.A., by: Bobby McDaniel & John

      Barttelt, for appellant.

      Walker, Snellgrove, Laser & Langley, by: Frank Snellgrove and Todd Williams, for appellee.
   John I. Purtle, Justice.

This is an appeal from an order granting summary judgment against the appellants on their claims against the appellees for damages arising out of an automobile accident. We agree with the appellants that the court erred in holding that there was no genuine issue of a material fact to be resolved.

The facts concerning the accident are not relevant because the appellees have admitted liability. The issue concerns a draft release which was issued by appellees’ insurance carrier and negotiated by appellant, Larry Bennett.

Sometime after the accident, Steve Skinner, the claims specialist for the appellees’ liability insurance carrier, contacted the appellants and agreed to pay “all necessary and reasonable expenses.” He subsequently issued a draft in the amount of $1,208.00 for payment of damage to the Bennett vehicle. Later, Skinner issued a second draft for $333.30 representing medical bills incurred to that date. Still later, he issued a third draft on a release form in the amount of $572.00, the amount of the chiropractor bill. The back of the draft contained the following language:

The undersigned payee accepts the amount of this payment in full settlement of all claims and damages to property and for bodily injury, whether known or unknown, which payee claims against any insured under the policy shown on the face hereof, or their respective successors in interest, arising out of an accident which occurred on or about the date shown. THIS RELEASE RESERVES ALL RIGHTS OF THE PARTIES RELEASED TO PURSUE THEIR LEGAL REMEDIES AGAINST SUCH PAYEE.

After negotiating the draft, the appellant continued to incur medical expenses. When informed by Skinner that the matter was closed so far as the insurance carrier was concerned, the appellants filed suit for damages against Gregory Don Trout for negligence and against Jo Lavonne Trout for negligent entrustment of an automobile. The appellants also alleged that the appellees were engaged in a joint venture. In their answer the appellees contended that the third draft constituted a full and complete accord and satisfaction in settlement of all claims. The appellees then filed a motion for summary judgment and supporting brief. An affidavit by Skinner was made in support of the motion for summary judgment; in it he stated that he had told the appellants that he would pay all necessary and reasonable expenses resulting from the occurrence. Skinner’s affidavit also stated that Larry Bennett had agreed to sign a release after Dr. Chester quit treating him and sent a final bill. Skinner stated that he issued the draft in the amount of Dr. Chester’s bill as a complete release. It was his contention that Bennett understood that he was signing a full release.

Appellants responded to the motion for summary judgment. Bennett filed an affidavit in support of the response in which he stated that he was receiving treatment from a doctor in Paragould and one in Memphis at the time he received the final bill from Dr. Chester. He also stated that the draft for $572.00 was the exact amount of Dr. Chester’s bill and that he understood it was simply another payment on what Skinner had already agreed to pay. Bennett’s statement included the following:

I understood the language on the back of the check as releasing the final bill from Dr. Chester. Mr. Skinner did not tell me he would require a complete release in our conversation of September 21,1984. He told me to let him know about any other medical bills.

Bennett further stated that he had informed Skinner that unless his condition improved he would have to seek additional treatment.

It is obvious from the matters presented to the trial court on the motion for summary judgment that there is a direct conflict between the testimony of Bennett and that of Skinner. Additionally, the release on the back of the draft ended with the statement that “this release reserves all rights of the parties released to pursue their legal remedies against such payee.” Apparently the insurance company was reserving its right to go against Bennett, the payee. The language is, at the very least, ambiguous.

We have many times held that a summary judgment should be granted only when it is clear that there are no genuine issues of material fact to be litigated. Ford v. Cunningham, 291 Ark. 56, 722 S.W.2d 567 (1987). In order to settle the issue in this case it is necessary to weigh the credibility of the statements of Bennett and Skinner. Certainly the status of the release is material in-as-much as if it was final, the case is over. On the other hand, if it was merely an interim payment, no release was bargained for. There was unquestionably a substantial issue of material fact to be resolved in the proceeding, and summary judgment should not have been granted.

A decision concerning a somewhat similar issue is found in Creswell v. Keith, 233 Ark. 407, 344 S.W.2d 584 (1961), where this court reversed the trial court’s order dismissing the complaint. In reversing, this court stated:

There are several allegations in the response filed by Creswell that if true would render the release ineffective. Lack of consideration, misrepresentation amounting to fraud, and also duress may be shown to set aside a release, and these are questions of fact.

In Wilson v. Southwest Casualty Insurance Company, 228 Ark. 59, 305 S.W.2d 677 (1957), we held that a misunderstanding or unilateral mistake, when accompanied by fraud, misrepresentation, or inequitable conduct, is sufficient to invalidate a release. In Wilson, the parties testified that the adjuster had told them that if they would sign the release for their personal injuries he would settle with their insurance carrier for the property damage. However, after signing the release, the adjuster refused to settle with the insurance carrier for the property damage. This court held that since the parties understood that there would be a settlement with their insurance carrier on the property damage if they would settle the personal injury claim, this statement amounted to possible fraud in the procurement of the release, and consequently there was a matter to be decided by the trier of facts. The Wilson case stands for the proposition that a representation may be the basis of fraud in procuring a release if there was never any intention on the part of the promisor to fulfill the promise. In the present case the adjuster admits he never intended to pay any more on this claim. Whether he made an unfulfilled promise in order to obtain the release is a fact question which should have been decided by the trier of fact.

Reversed and remanded.


text:
    Billy F. PSCHIER v. STATE of Arkansas
    CR 88-109
    760 S.W.2d 858
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      Murphy & Carlisle, by: John Wm. Murphy, for appellant.

      Steve Clark, Att’y Gen., by: R.B. Friedlander, Solicitor General, for appellee.
   John I. Purtle, Justice.

On appeal from the decision of the West Fork Municipal Court, the appellant was convicted of DWI in the Washington County Circuit Court. For reversal of that judgment he contends that his constitutional rights were violated by his trial in the West Fork Municipal Court, and that the trial in that court was in violation of Ark. CodeAnn.§ 16-85-201 (1987). We find no error in the appellant’s trial in circuit court and therefore affirm that decision.

On August 1,1987, the appellant was attempting to operate his vehicle at about 2:30 a.m. on Highway 16, slightly east of Elkins, Arkansas, when he ran into a ditch. A deputy sheriff picked him up at the scene and transported him to the Washington Regional Hospital where blood samples were drawn for the purpose of testing the appellant’s blood alcohol content. The appellant was taken from the hospital to the Washington County Jail in Fayetteville. He was charged with driving while under the influence, failing to keep his vehicle under control, and refusing to take further tests pursuant to the implied consent law.

The appellant was assigned to be tried in the West Fork Municipal Court on August 25, 1988. The record shows that on that date he was found guilty of DWI in the West Fork Municipal Court and sentenced to seven days in jail and a fine of $442.00. That judgment was then appealed to the circuit court. There is no record of the proceedings in the municipal court other than the judgment. However, at the trial de novo in circuit court, the appellant argued that is was prejudicial error to have allowed the appellant, who was arrested near Elkins, where a municipal court existed, to be taken to Fayetteville, where another municipal court existed, and then to be ordered to the West Fork Municipal Court for trial.

The arguments made in the circuit court concern only the jurisdiction and venue of the municipal court. However, we are not reviewing the conviction and judgment in municipal court in this appeal. Here, we consider only the judgment appealed from, which is a judgment of conviction from the circuit court of Washington County. That circuit courts have county-wide jurisdiction is not contested in this appeal. A trial de novo was held in the circuit court and the appellant apparently received a fair trial on the merits of his case. There is no allegation to the contrary.

In a companion case, Griffin v. State, 297 Ark. 208, 760 S.W.2d 852 (1988), we have reached the same conclusion. We therefore do not deem it necessary to cite the decisions discussed in the Griffin opinion.

It is apparent that the appellant’s disagreement with the manner in which his case was handled concerns alleged forum shopping on the part of arresting officers. He also argues that municipal judges, who are not elected county-wide, should not have jurisdiction beyond the geographical boundaries of their respective municipal courts. We do not reach the merits of either contention. Moreover, this opinion should not be interpreted to mean that municipal courts may take jurisdiction of any and all cases which may arise in their respective counties.

Affirmed.

Glaze, J., concurs.

Holt, C.J., Hickman and Newbern, JJ., dissent.

See dissenting opinions in Griffin v. State, decided this date.


author:
Robert H. Dudley, Justice.
      Tom Glaze, Justice, Darrell Hickman, Justice,
      David Newbern, Justice,

text:
    Garry GRIFFIN v. STATE of Arkansas
    CR 88-115
    760 S.W.2d 852
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      Murphy & Carlisle, by: John Wm. Murphy, for appellant.

      Steve Clark, Att’y Gen., by: R.B. Friedlander, Solicitor General, for appellee.
   Robert H. Dudley, Justice.

The appellant, a resident of Springdale, was arrested in Springdale, in Washington County, at 2:30 a.m. for driving while intoxicated and three related traffic offenses. He was taken to the Washington County jail in Fayetteville, where a gas chromatograph test was administered. He was then given a citation which directed him to appear in the Elkins Municipal Court for his trial. Elkins is also in Washington County, but about 18 miles from Springdale.

In the Elkins Municipal Court the appellant objected to venue based upon due process, equal protection, and Ark. Code Ann. § 16-85-201 (1987). The municipal court overruled the objections to venue and found the appellant guilty of all four charges. He then appealed to circuit court and, for his defense, relied upon error in the municipal court’s ruling. The circuit court provided him a trial de novo, and he was found guilty of the driving while intoxicated charge and one of the other misdemeanors. He now appeals to this Court and argues that the municipal court erred in its ruling. We find no basis for setting aside the circuit court’s judgments.

Even though the municipal court venue might have been erroneous, a point we do not reach, the applicable statute provides for an appeal to circuit court, where the accused is entitled to an entirely new trial, “as if no judgment had been rendered” in municipal court. Ark. Code Ann. § 16-96-507 (1987). The appellant does not question the fact that he received a fair trial, with proper venue, in circuit court — a trial that was not influenced or affected by what took place in the municipal court. Therefore, there is no basis for reversing the judgment of the circuit court. Killion v. City of Waldron, 260 Ark. 560, 542 S.W.2d 744 (1976).

An accused is not without a remedy when he is cited into a municipal court which he believes to be improper venue. In such a situation, the accused should seek a writ of prohibition in circuit court. A writ of prohibition will issue when a lower court without venue is about to act. Tucker Enterprises, Inc. v. Hartje, Judge, 278 Ark. 320, 650 S.W.2d 559 (1983); Beatty v. Ponder, Judge, 278 Ark. 41, 642 S.W.2d 891 (1982); International Harvester v. Brown, Judge, 241 Ark. 452, 408 S.W.2d 504 (1966); and Monette Road Improvement District v. Dudley, Judge, 144 Ark. 169, 222 S.W. 59 (1920).

Affirmed.

Holt, C.J., Hickman, and Newbern, JJ., dissent.

Glaze, J., concurs.

Tom Glaze, Justice,

concurring. The majority indicates venue in this case may have been erroneous but does not reach the issue because the appellant failed to seek a writ of prohibition in circuit court. Based upon that portion of the majority’s holding, I concur in the result it reached. I write because the court is divided four to three in this decision, and I wish to make my position clear that I may well have gone the other way if the court had considered the venue issue.

The venue question posed, but not answered here, arises when a municipal court entertains a state’s misdemeanor action against a defendant where the commission of the crime occurred outside the territorial limits of the municipality but within the county where the alleged violation was committed. Concerning a municipal court’s jurisdiction, the Arkansas Constitution clearly empowered the General Assembly to invest such jurisdiction as may be necessary in municipal corporation courts. This court has approved the General Assembly’s granting such jurisdiction in a number of cases. Pulaski County Municipal Court v. Scott, 272 Ark. 115, 612 S.W.2d 297 (1981); Johnson v. State, 200 Ark. 969, 141 S.W.2d 849 (1940); Brickell v. Guaranty Loan & Trust Co., 192 Ark. 652, 93 S.W.2d 656 (1936); State ex rel. Moose v. Woodruff, 120 Ark. 406, 179 S.W. 813 (1915). In this respect, Ark. Code Ann. § 16-17-206(b) (Supp. 1987) provides the jurisdiction of a municipal court is coextensive with the county except that, in counties having two judicial districts, the jurisdiction is limited to the district in which the court is situated. Of course, venue is distinguishable from criminal jurisdiction, which refers to the judicial power to hear and determine a criminal prosecution, in that it commonly pertains to geographical subdivisions, relates to practice and procedure and may be waived. In the instant case, as Justice Hickman notes in his dissent, five municipal courts have been established by law in Washington County, Arkansas. While each of the five courts has subject matter jurisdiction of traffic offenses, such as those brought against the appellant in this cause, I can find no venue statute that actually provides these misdemeanor offenses must be filed in a municipal court located within a prescribed geographical boundary.

Arkansas statutory law, Ark. Code Ann. § 16-17-116 (1987), does provide for a rather restrictive change of venue procedure from one municipal court to another once a criminal proceeding is filed and two or more municipal courts are located in the county. Section 16-17-116, however is not definitive concerning the court in which the initial criminal proceeding must be filed. I suppose it could be assumed the venue requirement in municipal court is coextensive with that court’s countywide jurisdiction, and it does not matter that the criminal offense occurred or the defendant resided outside the municipality’s territorial limits. However, if that were true, such misdemeanor proceedings can be brought against a defendant in one municipal court in the county no matter how many municipal courts there may be. Also, such a construction of § 16-17-116 would give municipal courts extra-territorial venue — which is not the situation with any other Arkansas trial court with criminal law subject matter jurisdiction. See Ark. Code Ann. § 16-19-402 (1987) (action brought before justice of peace where defendant resides or is found); Ark. Code Ann. § 16-18-110 (1987) (police court has authority to hear criminal offenses committed within the limits of the corporation); Ark. Const, art. 2, § 10 (accused has right to impartial jury trial in county where crime is committed and venue may be changed to any other county within the judicial district upon application of the accused).

The General Assembly’s failure to provide a venue law for bringing criminal proceedings in municipal court was not argued in this cause. Thus, what effect this omission might have remains unanswered. I have no doubt that the General Assembly has the authority, as well as the responsibility, to resolve this venue question. See Brickell, 192 Ark. at 655, 93 S.W.2d at 657; see also 22 C.J.S. Criminal Law § 176 (1961); 21 Am. Jur. 2d Criminal Law % 365 (1981). If the General Assembly fails to act, I am sure this court can expect some defendant to raise this venue question properly. When that occasion arises, confusion in the state’s municipal court process will surely result if this court holds — contrary to present practice and apparent belief — that a municipal court does not have venue of a crime or misdemeanor offense committed outside its territorial or city limits.

Darrell Hickman, Justice,

dissenting. The folly a court can reap when it will not follow the constitution is demonstrated by this case and its companion case, Pschier v. State, decided this same date. The 1874 Arkansas Constitution created a logical and comprehensive court system. It consisted of an appellate court, a general trial court which was the circuit court, a court of equity, a probate court and a county court. See Ark. Const, art. 7, §§ 1, 2, 11, 14, 28 and 34.

Lower level courts consisted of courts of common pleas, which could have county-wide jurisdiction on certain civil matters, justice of the peace courts with modest civil and criminal jurisdiction, and what were called corporation courts for towns and cities. These city courts were given the same subject matter jurisdiction as justice of the peace courts. Ark. Const, art. 7, §§ 32, 40 and 43. The legislature provided for three types of city courts: municipal courts, Ark. Code Ann. §§ 16-17-201 to 614 (1987); police courts, Ark. Code Ann. §§ 16-18-101 to 112 (1987); and mayor courts, Ark. Code Ann. § 14-44-108 (1987) and § 14-45-106 (1987).

In 1915, this court made a serious mistake in its interpretation of the constitution and decided that the Little Rock and North Little Rock municipal courts could have county-wide jurisdiction, that is, jurisdiction beyond their geographic limits, even though the judges were only elected as city officials. State ex rel. Moose v. Woodruff, 120 Ark. 406, 179 S.W. 813 (1915). The reasoning behind the decision was that the constitution did not say you couldn’t give a city court extra-territorial jurisdiction. Of course, the constitution doesn’t say that Arkansas cannot annex Oklahoma either.

The decision ignored entirely the overall scheme for lower courts and paved the way for the current proliferation of municipal courts operating beyond the bounds of constitutional restraints. Generally, these courts all have equal jurisdiction throughout the county, just like a circuit court. But unlike other courts, they can get their cases merely on the basis of the decision of the arresting officer. It is undoubtedly a one of a kind court system.

Act 87 of 1915 effectively provided for the creation of municipal courts only in the Pulaski County area; at the time it applied just to Little Rock and North Little Rock. I can only suppose that the court in 1915 thought there would never be more than one or perhaps two courts in a county. Perhaps the court thought is was improving the system by providing for a court for the whole county with a lawyer sitting as judge. Maybe the court wanted to accommodate the powers that be; or maybe the court didn’t understand the consequences of its decision. In any event, could it be seriously argued that the court, or the drafters of the constitution, envisioned a situation like the one in present-day Pulaski County: six municipal courts, most empowered to hear identical cases, and, with no legal means of preventing overlapping jurisdiction, receiving their cases on the whim of the arresting officer?

The constitution’s scheme, if it had been followed, would have worked perfectly. A city court would have jurisdiction over matters within its city limits and coexistent with justices of the peace over townships located in the city limits. Justices of the peace would handle certain civil and criminal matters within their townships; a court of common pleas could be established to handle civil matters for the whole county (there are such courts in 13 counties in Arkansas). There was no mention of or contemplation by the drafters of a city court that could rule the county.

The Moose v. Woodruff decision left to the legislature unrestrained power to create city courts with county-wide jurisdiction and the power to decide what cities could have such municipal courts. If this court had followed the constitution, reform of our lower court system could have occurred properly by constitutional amendment. Instead the way was paved to permit every hamlet in the state to have a municipal court and that is what has happened. There are now 124 municipal courts in Arkansas.

I cannot say exactly when it occurred to some cities and counties that getting a municipal court was the thing to do, but the idea has caught on. Forty-five municipal courts, nearly one-third of the current total, have been created since 1970. Part of this is due to the passage of Act 240 of 1973 which allowed municipal courts to be established in second class cities under some circumstances.

We have had opportunities to minimize the impact of Moose v. Woodruff. In Lawson v. City of Mammoth Spring, 287 Ark. 12, 696 S.W.2d 712 (1985), and Littleton v. Blanton, 281 Ark. 395, 665 S.W.2d 239 (1984), two municipal courts were declared illegal because they were based on local legislation. In City of Springdale v. Jones, 295 Ark. 129, 747 S.W.2d 98 (1988), we held a municipal court cannot have jurisdiction in another county even though the city extends into the other county.

But in Pulaski County Municipal Court v. Scott, 272 Ark. 115, 612 S.W.2d 297 (1981), we compounded our past error and approved the creation of an entirely new court creature — a county municipal court. That such a county-city court was authorized by the constitution is simply laughable. We have said repeatedly that the legislature does not have the power to create courts, Walker v. Ark. Dept. of Human Services, 291 Ark. 43, 722 S.W.2d 558 (1987); Ward School Bus Manufacturing Inc. v. Fowler, 261 Ark. 100, 547 S.W.2d 394 (1977), yet we approved this new breed of court quite readily.

The Pulaski County “municipal court” was created to make money for the county (Pulaski County would not have to share in the fine revenues from other municipal courts). The court has done well. In fiscal year 198 8, it collected $413,596.00 in fines and costs.

Our decisions have created confusion beyond the question of a court’s jurisdiction. Is a municipal judge a city official or a county official? In Beshear v. Clark, 292 Ark. 47, 728 S.W.2d 165 (1987), we held it to be a municipal office. Would that be true of a judge of a county municipal court, or a municipal judge of part of a county? See Pulaski County Municipal Court v. Scott, supra.

This case and the Pschier case concern the court system in Washington County. There are five municipal courts in that county, one each in Fayetteville, Springdale, Prairie Grove, West Fork and Elkins. We have reviewed another case in which a Washington County law enforcement officer took a defendant across the county to another city’s municipal court. See Horn v. State, 282 Ark. 75, 665 S.W.2d 880 (1984).

In this case, did deputy sheriff Vernon Sizemore who arrested Garry Griffin in Springdale, a city of 25,556, take him to be tried in Elkins, a town of 673, because the justice was better there? I expect not. Perhaps he wanted to help Elkins out in its revenue raising efforts. In fiscal year 1988, Elkins collected $46,353.00 in fines. Perhaps the sheriff’s office favors Elkins, or maybe it is just a matter of spreading business around. Whatever the motivation, I cannot think of one good reason for taking Griffin, a Springdale resident arrested in Springdale, to the Elkins court.

The same question can be asked in the companion case. Why on earth would Pschier, who was arrested near Elkins, be tried in West Fork, which has a population of 1,580 and is about 15 miles from Elkins. Is the justice better there?

Is this the kind of court system the drafters of the constitution created? Nonsense.

The question is should we continue to tolerate such a system. For myself, I will stay with the constitution as I have in the past. See City Court of Pea Ridge v. Tiner, 292 Ark. 253, 729 S.W.2d 399 (1987) (Hickman, J., dissenting). To me the question is jurisdiction, which we can raise on our own. The municipal courts of Elkins and West Fork have no jurisdiction over misdemeanors committed outside their city limits. I can understand the court’s reluctance to go back to the constitution at this late date, but the alternative is fostering a system that leaves a defendant, guilty or not, with the impression he has been railroaded.

The court can hope the legislature will come to its rescue and regulate the jurisdiction of these courts to prevent policemen from forum shopping. But the municipal courts and their cities are a strong lobby and their newfound power and revenues will not be easily surrendered. The municipal judges could work to change the system but they are unlikely to for the same reason.

The court can ignore the problem and hope a constitutional amendment will be passed or that these cases won’t persist. In my judgment, that is essentially what the majority is doing. I would not reach the due process argument. But the majority’s treatment of the question is disturbing; that is, if one can’t find justice in these courts, it can be found in the circuit court. Frankly, that means due process of law can only be obtained if one hires a lawyer and spends several hundred or a thousand dollars for an appeal. The majority is saying the constitution does not count in these courts. There is no doubt that due process of the law encompasses the right to an impartial judge which can be a question in cases such as these. See Ward v. Village of Monroeville, 409 U.S. 57 (1972); Gore v. Emerson, 262 Ark. 463, 557 S.W.2d 880 (1977).

I get the impression that, for some reason, these are considered little cases involving little people who must fend for themselves. I suppose it will take a scandal to remedy this situation and scandal there will be. Because anytime a policeman can decide which judge will determine the fate of the defendant, there is an open invitation to corruption.

I would reverse and dismiss this case.

Holt, C.J., and Newbern, J., join in this dissent.

David Newbern, Justice,

dissenting. Justice Hickman’s dissenting opinion expresses my views. I was tempted to vote with the majority but publish a concurring opinion pointing out that if we hold that municipal courts do not have county-wide jurisdiction we might leave a void in those parts of counties not included in any municipality. Arkansas Const, amend. 55 made true county legislators out of justices of the peace, and we have not yet decided whether they retain any of their judicial powers. I suspect they do not, given our constitutional separation of powers scheme.

Our need for a new judicial article is pressing. This is not a time for timidity. It was our decision in Walker v. Arkansas Dept. of Human Services, 291 Ark. 43, 772 S.W.2d 558 (1987), which brought about the new amendment permitting the creation of juvenile courts. While I am not certain the void created by limiting municipal courts powers to the geographical limits of the cities they serve can be as readily filled as was the temporary juvenile court void, I am convinced it is the price we should be willing to pay to correct an absurd and unfair situation.

My hope is that we can stop dealing with the brush fires created by our antiquated judicial article by addressing the overarching conflagration. Arkansas is ready for a modern court system, like the one recently created in Alabama, including financial and political unification of the state judiciary. Ala. Const, amend. 328. See Crown Equip. Co. v. Robinson Mining Co., 342 So. 2d 910 (Ala. 1977). Cf. Colston v. State, 57 Ala. App. 4, 325 So. 2d 520 (1975), cert. denied, 295 Ala. 398, 325 So. 2d 531 (1976).

Holt, C.J., and Hickman, J., join this opinion.

       Amendment 55 to the Arkansas Constitution has since been enacted, but I note that prior Arkansas statutory law, still compiled in the code, provides for a change of venue from a justice of peace to municipal court. See Ark. Code Ann. § 16-19-409 (1987); see also Ark. Code Ann. §§ 16-19-401 — 408 (1987) for jurisdiction and venue provisions for justice of peace courts and how those provisions are affected where a municipal court exists.

       Some municipal courts have been given jurisdiction of only a part of the county. Act 322 of 1969 provides that in Clay County, Corning has jurisdiction of the county’s western district and Piggott and Rector of the eastern district. Act 616 of 1975, struck down as local legislation in Littleton v. Blanton, 281 Ark. 395, 665 S.W.2d 239 (1984), provided for jurisdiction only in certain townships.

       We do not know for certain if justices of the peace still have judicial powers. Amendment 55, which reorganized county government did not grant them these powers. See Ark. Const. amend. 55.

       In some instances, a municipal judge is elected countywide, undoubtedly in deference to the accepted principle of democratic government that officials can only serve the area that elected them. See Johnson County Board of Election Comm'rs v. Holman, 280 Ark. 128, 655 S.W.2d 408 (1983). See also Ark. Code Ann. § 16-17-120 (Supp. 1987).

       Amendment 64, which intended to transfer some of the civil workload from circuit courts to municipal courts, missed a good opportunity to remedy this situation. Evidently the drafters were unaware of the problem of multiple courts in a county with no scheme to control concurrent jurisdiction. Since Amendment 64 seems to give county-wide jurisdiction to municipal courts in some civil matters, it allows the same problem to persist because a civil claimant can pick his judge to hear his case. The amendment did not alter jurisdiction in criminal matters.


author: Robert H. Dudley, Justice.

text:
    Carl Dale HEGWOOD v. STATE of Arkansas
    CR 88-124
    760 S.W.2d 859
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      John Patton, for appellant.

      Steve Clark, Att’y Gen., by: Lynley Arnett, Asst. Att’y Gen., for appellee.
   Robert H. Dudley, Justice.

Appellant, Carl Hegwood, appeals from a conviction for the rape of a person under the age of eleven years. We affirm the conviction.

Criminal charges were brought against appellant, and trial was scheduled to begin on February 2, 1988. After talking with the victim’s psychologist, the prosecutor determined that it would be difficult for the nine-year-old child to testify at trial. On January 25, 1988, the prosecutor notified appellant’s attorney that he intended to take videotaped testimony from the child on January 30,1988. Appellant contends that the trial court erred in admitting the videotaped deposition of the victim because appellant had not been given twenty (20) days notice prior to the taking of the deposition.

Appellant bases his twenty-day notice argument on Ark. Code Ann. § 16-44-117(a)(2) (1987). The short answer to this argument is that the statute is not applicable to this case. First, Ark. Code Ann. § 16-44-117 has been superseded by AR.CP Rule 27. See In re Statutes Deemed Superseded by the Arkansas Rules of Civil Procedure, 290 Ark. 616, 719 S.W.2d 436 (1986). Second, ARCP Rule 27(a) applies in situations where the petitioner expects to be a party to an action, but is presently unable to bring it. The procedures set out in Rule 27 (a) allow the petitioner to preserve testimony that is critical to his case so that it will be available when the petitioner is able to bring an action. Here, criminal charges had been brought, and the matter was proceeding to trial. Appellant’s reliance upon Ark. Code Ann. § 16-44-117 is simply misplaced for neither it nor Rule 27(a) is applicable here. Further, the applicable statute, Ark. Code Ann. § 16-44-203 (1987), provides that, “upon motion of the prosecuting attorney and after notice to the opposing counsel, the court, may, for good cause shown, order the taking of a videotaped deposition of any alleged victim under the age of seventeen (17) years.” We find no error in the trial court’s determination that the notice given to appellant was adequate.

Alternatively, appellant argues that the trial court erred in permitting the State to introduce the videotaped deposition and also to call the child to testify in person. Appellant made no objection on this basis below, and he is therefore precluded from raising the issue for the first time on appeal. Wicks v. State, 270 Ark. 781, 606 S.W.2d 366 (1980).

Affirmed.


author: Steele Hays, Justice. David Newbern, Justice,

text:
    Bill BOREN, Jr. v. STATE of Arkansas
    CR 88-37
    761 S.W.2d 885
    Supreme Court of Arkansas
    Opinion delivered December 5, 1988

      Joel W. Price, for appellant.

      Steve Clark, Att’y Gen., by: J. Blake Hendrix, Asst. Att’y Gen., for appellee.
   Steele Hays, Justice.

In this case, Bill Boren, Jr., appeals a conviction under Ark. Code Ann. §4-90-204(d) (1987), failure to disclose the alteration of an odometer on a vehicle offered for sale. He has raised two issues on appeal, neither of which has merit.

Bill Boren, Jr. was operating a used car dealership under the name Boren Motor Company. The police received an anonymous tip that there had been some odometer “rollbacks” on cars connected to that dealership. Further investigations were conducted resulting in appellant being charged with four counts of tampering with odometers, Ark. Code Ann. § 4-90-204 (1987) [Ark. Stat. Ann. § 75-2402(4) (1979)].

On May 20,1987, a jury trial was held in the Circuit Court of Crawford County, Arkansas. When the state rested its case, appellant moved for a directed verdict based on the state’s failure to prove knowledge of alteration. The motion was denied and at the close of the appellant’s case the motion was renewed and again denied. The jury returned a verdict of guilty on all four counts and imposed a fine of $1,000 on each count and additionally, a term of one year on count two.

I

On appeal, Boren first assigns error to the trial court’s denial of his motion for a directed verdict. A motion for a directed verdict is a challenge to the sufficiency of the evidence, not to the nature or character of the evidence, and is proper only when no issue of fact exists. On review, we consider the evidence in the light most favorable to the appellee and affirm if there is any substantial evidence to support the verdict. Only testimony in support of the verdict need be considered. David v. State, 286 Ark. 205, 691 S.W.2d 133 (1985). Our responsibility is to determine whether the verdict is supported by substantial evidence, that is, whether the jury could have reached its conclusion without having to resort to speculation or conjecture. Boone v. State, 282 Ark. 274, 668 S.W.2d 17 (1984). We do not judge the credibility of witnesses, but instead weigh the evidence in the light most favorable to the appellee to see if there is substantial evidence to support the verdict. Thompson v. State, 284 Ark. 403, 682 S.W.2d 742 (1985). Viewing the evidence in that light, we find the trial court’s denial of the directed verdict was proper.

Appellant was prosecuted under Ark. Code Ann. § 4-90-204 (1987), which reads in part:

(d) No person shall sell or offer for sale any motor vehicle with knowledge that the mileage registered on the odometer has been altered so as to reflect a lower mileage than the motor vehicle has actually been driven without disclosing such fact to prospective buyers.

We have not had occasion to interpret our odometer act, Ark. Code Ann. § 4-90-201 (1987) et seq., so we have looked for authority from cases under the federal act, 15 U.S.C.A. § 1981 (1982) et seq., which is very similar to the Arkansas act, and to acts in other states. For the state to prove its case against appellant under § 4-90-204(d) (1987), it was necessary to show that appellant had knowledge that the mileage registered on the odometers had been altered so as to reflect a lower mileage, and that he failed to disclose this fact to prospective buyers.

To prove an alteration of an odometer was done with knowledge and, therefore, intentionally it has generally been held that if it is shown that the alteration took place while the automobile was under the dominion and control of the defendant or his agents the evidence is sufficient. United States v. Hugh Chalmers Chevrolet-Toyota, Inc., 800 F.2d 737 (8th Cir. 1986); State v. Kennedy, 224 N.W.2d 223 (Iowa 1974); State v. Biter, 49 Del. 503, 119 A.2d 894 (1955); and see United States v. Studna, 713 F.2d 416 (8th Cir. 1983), where the evidence on this point was not challenged, but the court noted that on the odometer rollback charge the state had shown that the odometer had been rolled back during the time the cars had been owned by the defendant and that this evidence was overwhelming.

Evidence of alteration is often circumstantial: usually it is shown by contrasting the higher odometer reading prior to the sale to the defendant and the lower reading at the time the defendant sells the vehicle to a customer. 1 Am. Jur. 2d Proof of Facts § 6 (1974); Billings, Handling Automobile Warranty and Repossession Cases § 8.24 (1984). Proof of the earlier higher reading has come from testimony of a previous owner, applications for certificates of title on file in the motor vehicle department, testimony of a mechanic or service manager who recorded the mileage on a repair order, or any official records citing the vehicle’s odometer reading. 1 Am. Jur. 2d Proof of Fact, supra; Billings, supra; and see generally, Annotation Unlawful Tampering with Odometer, 76 A.L.R. 3d 981 (1977).

Here the state presented sufficient evidence to show the automobiles were under the dominion and control of appellant during the time the alteration took place. The state presented evidence regarding the four different cars that were purchased, which essentially related the sales transaction and the odometer reading on each car at the time of purchase. This testimony clearly established, with no dispute from appellant, what the lower reading was at the time of sale to appellant’s customers.

The state also presented sufficient evidence to show the cars were under the control of the appellant at the time the vehicles showed a higher reading on the odometer. The four vehicles in question had been purchased from the 166 Auto Auction. Mary Jo Henson, the office manager of the auction presented invoices for each of the four cars. Each invoice identified the car and indicated the mileage registered on the odometer at the time it was auctioned. In each case, there was a difference ranging from 25,000 to 45,000 miles on the readings at the time of auction and the later sale by the appellant. The name of the buyer on each invoice was Boren Motor Company. The state also introduced a privilege license purchased by appellant, showing that Bill Boren, Jr. was authorized to operate under the name Boren Motor Company.

Appellant concedes he operated as Boren Motor Company, but contends the identity of the auction buyer was inconclusive, as there was other evidence showing the cars had been purchased by Boren Wholesale Motors, a concern allegedly owned by his father, Bill Boren, Sr. Appellant refers us to a computer printout attached to each invoice, showing the buyer of each car was Boren Wholesale Motors and to testimony by Ms. Henson that both appellant and his father had been buyers at the auction in the past, and that she had no information as to the buyer on this occasion other than her records.

We are not persuaded by appellant’s argument. Ms. Henson said when questioned further about the discrepancy between the invoice and the printout, that the invoices were made out first while the printouts were made out later by different clerks. At that point she indicated there was less formality and less concern with the preciseness of the information: “Sometimes it’s just in a man’s name; it may not be in his company name, but it just may be made in his name.” From the evidence presented, it is a permissible inference that appellant had made the purchase as shown on the invoice, and because of the informality of further record keeping, a similarly named company was shown as the buyer on the printout. It is the jury’s sole prerogative to evaluate the conflicting evidence and to draw its own inferences, Williams v. State, 17 Ark. App. 53, 702 S.W.2d 825 (1986), and the jury may draw any reasonable inference from the evidence presented, Upton v. State, 257 Ark. 624, 516 S.W.2d 904 (1974). We find there was sufficient evidence to show appellant’s dominion and control over the vehicles during the time that the alteration of the odometers took place.

In addition to knowledge of the alterations, it was necessary for the state to show the vehicles were sold by appellant, without disclosing to the purchasers the alterations and tjie resultant lower mileage. The purchasers of the cars testified that while appellant had given them a completed disclosure form, there was no other attempt by him to disclose the alteration. In fact, he gave verbal reassurances to two of the customers that the odometers were correct to the best of his knowledge. The disclosure form, however, far from disclosing any alterations, indicated the opposite and there is no way we can find from th? form that appellant had disclosed the required information.

Appellant had checked two statements on the disclosure form. The first read: “I hereby certify that the odometer of said vehicle was not altered, set back, or disconnected while in my possession, and I have no knowledge of anyone else doing so.” This statement is clearly the antithesis of disclosing that there had been an alteration of the odometer.

The second statement checked by appellant stated: “I certify that to the best of my knowledge, the odometer reading as stated above is not the actual mileage of the vehicle described below and should not be relied upon.” Even considering this statement standing on its own, appellant has not given the required disclosure. This statement does not reveal that the reading is actually lower than what has been driven, but only that it is inaccurate. To merely say that the mileage is inaccurate is an ambiguous statement at best and could refer to any number of circumstances. It certainly does not equate to a disclosure that the odometer has been altered so as to reflect a lower mileage than the car has actually been driven. The statement not only misstates the facts as appellant knows them to be, but it deprives the customer of essential information and misleads him or her as to the true circumstances.

A similar situation was considered in Ryan v. Edwards, 592 F.2d 756 (4th Cir. 1979). In that case the court was reviewing the effect of a partial and misleading disclosure, analogous to those in this case. Under 15 U.S.C. § 1988 (the federal odometer disclosure statute) a disclosure must be made that “the actual mileage is unknown, if the odometer reading is known to the transferor to be different from the number of miles the vehicle actually traveled.” In Ryan it was shown that the odometer had “turned over” after 99,000 miles so that the odometer reading was not an accurate reflection of the miles actually traveled, and this fact was known by the defendant. The form used by the defendant to make the disclosure provided a blank on which to record the odometer reading and a second blank on which to record the vehicle’s total cumulative miles if over 100,000. The defendant filled in the low figure the car currently registered in the first blank, left the second blank empty and checked a box indicating that the true mileage was unknown. The defendant told the buyer that the car was a low mileage car but the odometer had been broken for a period of time and another 20,000 miles should be added to what the odometer registered to get an approximate reading of the actual mileage. The court found that the disclosure provisions had been violated and stated:

When a transferor who knows that an odometer has “turned over” merely records the numbers appearing on the odometer and certifies that the true mileage is unknown, the consumer is not simply deprived of accurate mileage information; he is actually misled by the form itself. We cannot believe that Congress intended to enact a statute requiring that consumers be given false or misleading information.

See also Suits v. Little Motor Co., 642 F.2d 1883 (5th Cir. 1981).

Similarly, the evidence in this case showed that appellant had knowledge of the former higher readings and that he had altered the odometer to a lower reading. Yet his disclosure form indicated only that the mileage was not accurate. This disclosure not only deprived his customers of the odometer readings prior to alteration but misled them as to the facts as they actually were.

When we also consider the other statement checked on the form — that there had been no alteration of the odometers — the misleading character of the disclosure document becomes overwhelmingly predominant. If appellant were attempting to neutralize or qualify the false statement as to the alterations, by the second statement of inaccuracy, he has failed. When the statement on inaccuracy is read in conjunction with the statement and there has been no alteration, it becomes even clearer that the customer is not only deprived of essential information, but is misled as to the true nature of the facts.

If we were to hold otherwise, a dealer could readily alter the odometers, warrant the opposite on the disclosure statement, and sell cars with impunity by checking a second ambiguous statement on the disclosure form. This cannot have been the intent underlying the required disclosure under state law, or the requirement of the federal disclosures. The purpose of disclosure of odometer information is to “enable the purchaser of a motor vehicle to know how many miles the vehicle has traveled, as a guide to its safety, reliability and value.” Ryan, supra. If the dealers can manipulate the disclosure forms to suit their purposes, the customers would be better off without the required disclosure.

Appellant has also taken issue with the federal disclosure form itself, claiming full compliance to the extent the form allows. His argument is not entirely clear, but we note first that appellant was not prosecuted for non-compliance with, or making false statements on, the required disclosure form, (Ark. Code Ann. § 4-90-206) (1987), and to that extent, the argument is irrelevant. However, he objects to the disclosure form because there was no provision to check if he knew the odometer had been altered. As the disclosure form is a required procedure, appellant contends he was forced to choose from the options available, none of which, he claims, would reflect the true circumstances of his case. We take the point to be that his statements on the form were not competent evidence and should not have been admitted. But no such argument was made in the trial court, in fact, appellant expressly allowed the introduction of the disclosure forms without objection. Any argument on that basis fails for lack of an objection in the trial court.

II

Appellant’s second argument claims error in the trial court’s denial of his motion for a new trial. The decision whether to grant a new trial rests with the sound discretion of the trial judge and will not be reversed in the absence of an abuse of discretion or manifest prejudice to the complaining party. Foster v. State, 294 Ark. 146, 741 S.W.2d 251 (1987); Vasquez v. State, 287 Ark. 468, 701 S.W.2d 357 (1985).

Appellant claims first that a new trial was required on the basis of newly discovered evidence. But that is not a favored ground for a new trial, Vasquez, supra, and evidence which is merely cumulative will not suffice. Orsini v. State, 281 Ark. 348, 665 S.W.2d 245 (1984). Given that, we find no error here because appellant’s new evidence merely showed that Bill Boren, Sr. had purchased seventeen cars from the the 166 Auto Auction. The evidence at trial had already shown that Boren Sr. was a purchaser from the auction, and the “newly discovered evidence” only added to that fact and shed no additional light on the four cars in question at the trial.

Appellant also claims the verdict was against the evidence, Ark. Code Ann. § 16-89-130(5) (1987). We considered this point earlier and find no argument presented that alters our decision on the sufficiency of the evidence to support the verdict, and therefore find no error in the trial court’s denial of the new trial motion on this ground.

AFFIRMED.

Purtle, J., Dudley, J., and Newbern J., dissent.

David Newbern, Justice,

dissenting. The appellant, Bill Boren, Jr., was convicted of four counts of violating Ark. Code Ann. § 4-90-204(d) (1987) which prohibits sale of an automobile with knowledge that the mileage on the odometer shows fewer miles than the automobile has actually been driven without disclosing that fact to the buyer. I agree with Boren’s argument that a directed verdict should have been granted in his favor because the state’s evidence showed that he disclosed to the buyers of the cars that the mileage shown on the odometers was not accurate and was not to be relied on by the buyers.

The state’s witnesses included the purchasers of three cars from Boren Motor Company, owned and operated by Bill Boren, Jr. Chris Fox testified he bought a car from Boren, and Boren told him the odometer mileage was correct to the best of his knowledge. On cross-examination, Fox stated when he bought the car he received from Boren an “Odometer Mileage Statement.” It is a statement made on a form which is prescribed by federal regulations, and it contains basic information about the car, including the mileage shown on the odometer at the time of sale. The form has two groups of three alternative statements. Only one in each group of three may be checked by the seller. Fox testified that on the form he received, the box next to the following statement was checked: “I certify that to the best of my knowledge, the odometer reading as stated above is not the actual mileage of the vehicle described below and should not be relied upon.” The second “not” was underlined. In the second group, the following statement was checked: “I hereby certify the odometer of said vehicle was not altered, set back or disconnected while in my possession, and I have no knowledge of anyone else doing so.” Fox’s signature, acknowledging receipt of a copy of the form appears at the bottom. The form is reproduced below.

John Paschall testified he bought a car from Boren. He asked if it were not common practice for dealers to turn back odometers, and Boren replied that it was practically impossible to do it on the newer models with digital type odometers. On cross-examination, Paschall testified he received an odometer statement like the one given to Fox, disclosing that the odometer reading was not to be relied upon, and his wife signed it.

Jess Staggs testified he bought a car from Boren but kept it only two hours because his son, a police officer, told him to check the mileage, and he compared it with a statement (the origin of which he did not reveal) stating the car had been sold earlier in Springfield, Missouri, showing substantially higher mileage. His money was returned to him when he returned the car. He said nothing about any conversation with Boren about the mileage, but on cross-examination he confirmed receiving a mileage statement like those received by Fox and Paschall disclosing the alteration of the odometer and advising him not to rely on it.

A bank officer testified his bank had financed the purchase of a car from Boren by Herb Sharpe. He presented a copy of Sharpe’s note and the title to the car which showed the mileage at the time the note was made. Also presented was a bill from Boren showing the mileage on the car.

At the conclusion of the state’s case, Boren moved for a directed verdict on the ground that there had been no showing that he knew the odometers had been altered and that he had disclosed to the buyers that they could not rely upon the odometers as correct statements of the mileage on the cars. The motion was denied.

In his case in chief, Boren presented as an exhibit a disclosure statement to Sharpe like the others. The state thus presented three witnesses who testified they had received the disclosure forms from Boren with respect to the cars they purchased from him. As to the fourth car, the one purchased by Sharpe, the state presented no evidence whatever that the sale was made without the disclosure about which Boren testified.

Perhaps the heart of the state’s brief is the following:

Boren knew that the odometer readings had been altered. As shown above, this was sufficiently proved by circumstantial evidence [citations omitted]. With this fact in mind, the state proved beyond a reasonable doubt that Boren failed to meet the disclosure requirement of Ark. Code Ann. § 4-90-204(d) by failing to comply with Ark. Code Ann. § 4-90-206(a); knowing that the odometer readings were inaccurate, it was Boren’s duty under Arkansas law to state that the mileage was unknown. By failing to do so, he failed to comply with the disclosure requirement. But cf. Rider Oldsmobile, Inc. v. Wright, 415 F.Supp. 258 (M.D. Penn. 1976).

Thereafter the state cites cases to the effect that statutes must be given an interpretation which meets the intention of the legislature and does not result in absurdity or injustice. Missing from the state’s brief and from the majority opinion are citations to the cases holding that statutes which criminalize conduct must be construed strictly, e.g., Knapp v. State, 283 Ark. 346, 676 S.W.2d 729 (1984); Dowell v. State, 283 Ark. 161, 671 S.W.2d 740 (1984); Clayborn v. State, 278 Ark. 533, 647 S.W.2d 433 (1983). We recognized in Knapp v. State, supra, that we should also try to give effect to the intent of the legislature. We will not carry the interpretation so far as to favor the accused, Clayborn v. State, supra, to the extent of overruling the clear intent of the legislature, Dollar v. State, 287 Ark. 61, 697 S.W.2d 868 (1985). In this case, however, the statute is clear in its provision that it is the sale of a car having a rolled back odometer without disclosure that is against the law. We should not allow a conviction to stand where each of the witnesses on whose testimony the case stands or falls testifies the accused did the very thing which, according to the words of the statute, absolves him of guilt. The state has not shown that any sale was “without disclosure.”

The odometer disclosure statement form used by Boren is the one federal law requires dealers to use in states which have not adopted an official form which meets federal requirements. See 49 C.F.R. 580.4, 580.6 (1987). We cannot know what the jurors thought, but it may be that they felt Boren had not told the truth when he stated on the form that the odometer on each of the cars was not rolled back while the car was in his possession and that he had no knowledge of anyone else doing so. There was, as the state argues, circumstantial evidence that the rollbacks occurred while the cars were in Boren’s possession. That, however, if it is a crime, is not one with which Boren was charged.

The majority opinion is intent on affirming this conviction because “the misleading character of the disclosure document becomes overwhelming predominate.” It ignores the fact that the form used by Boren is the one he is required to use by federal law. The majority opinion states, “the customer was deprived of essential information and is misled as to the true facts.” The point is that Boren was tried and convicted for selling a car with a rolled back odometer without disclosure. He was convicted of violation of a particular criminal law statute and not some vague concept of misrepresentation.

The effect of the majority opinion is not only to ignore the rule that we construe criminal statutes strictly, it ignores the provision in the statute which permits conviction only for sale of a vehicle with a lowered odometer reading “without disclosing such fact to prospective purchasers.” Given the failure of the state’s evidence to show any sale was made “without disclosure” the judgment of the trial court should be reversed, and the case dismissed.

I respectfully dissent.

Purtle and Dudley, JJ., join this opinion.

       While appellant does not raise this point, we note that in order to prove a defendant had knowledge of an odometer rollback, the state need not show any intent to defraud or any evil purpose. In a similar federal statute, the alteration of an odometer is a criminal offense if done “knowingly and willfully.” 15 U.S.C. 1984, 1990(C). This was interpreted to mean only an intentional violation of a known legal duty, and nothing more was required than to show the intent to do the act. United States v. Studna, 713 F.2d 416 (8th Cir. 1983) (“Alterations performed with innocent motives have the same capacity to mislead purchasers as those done with evil motives.”)

       This conclusion is also reflected in general contract principles, that is, when an express warranty is negated or limited by other language, the disclaimer must fall away. See Walcott v. Steel, 246 Ark. 95, 436 S.W.2d 820 (1969); Ark. Code Ann. § 4-2-316(1) (1987). So in this case, when appellant attempted to certify that the odometer reading was accurate, and in the next breath attempted to qualify that claim by stating he had no knowledge of the actual mileage, the disclaimer was of no effect.