author: Allen W. Bird II, Special Chief Justice. David Newbern, Justice,

text:
    Jim C. PLEDGER, Tim Leathers, et al. v. Stanley BOSNICK, et al.
    90-39
    811 S.W.2d 286
    Supreme Court of Arkansas
    Opinion delivered June 10, 1991

      Winston Bryant, Att’y Gen., by: Lynley Arnett, Asst. Att’y Gen., for appellant Jimmie Lou Fisher.

      Wm. E. Keadle, Revenue Legal Counsel, for appellants Jim C. Pledger and Tim Leathers.

      Hilburn, Calhoun, Harper, Pruniski & Calhoun, Ltd., by: Carrold E. Ray, for appellee.
   Allen W. Bird II, Special Chief Justice.

Appellants, Jim C. Pledger, Director of the Arkansas Department of Finance and Administration, and Tim Leathers, Commissioner of Revenues, were charged with the enforcement of the Arkansas Income Tax. Appellees consist of a certified class of Arkansas residents who have retired from employment with various United States civil service agencies, with the various branches of the United States Armed Services, and with other states’ agencies and political subdivisions.

Appellees filed suit in the Chancery Court of Pulaski County, Arkansas, against appellants Pledger and Leathers in their respective capacities, along with Jimmie Lou Fisher, in her capacity as Treasurer of the State of Arkansas. Appellees contended that the provisions of Ark. Code Ann. § 26-51-307 (1987), which provided a full exemption from Arkansas Income Tax for the retirement income received by retirees from the Arkansas Public Employees, Teachers, State Highway Police, and State Highway Employees Retirement Systems, while allowing an exemption for only the first $6,000 of appellees’ and all other retirees’ retirement income, was in violation of the principles of intergovernmental tax immunity by favoring retired employees of the State of Arkansas and local government employees over retired federal employees and retired employees of other states and political subdivisions thereof. The Chancellor, citing the United States Supreme Court case of Davis v. Michigan Dep’t of Treasury, 489 U.S. 803 (1989), agreed with appellees’ contention, and on November 1, 1989, ordered the appellants to refund to all members of the class all such income tax collected on their retirement income since 1985 and awarded appellees’ counsel an attorney’s fee from a portion of this refund. From this decision and decree entered by the Chancellor appellants have perfected this appeal. We affirm the lower court.

Initially we must determine whether the appeal herein is final for the purposes of Rule 2 of the Arkansas Rules of Appellate Procedure. Neither the appellants nor the appellees have raised this issue; however, we addressed the issue during oral argument of the case. Even though the parties to an appeal do not raise the issue of the appealability of an order, it is the duty of this court to do so, as a determination that the order appealed from is not final would deprive this court of jurisdiction to hear the appeal. Associates Fin. Serv. Co. of Okla., Inc. v. Crawford County Memorial Hosp., Inc., 297 Ark. 14, 759 S.W.2d 210 (1988). The existence of a final order is a jurisdictional requirement for bringing an appeal, which this court is obliged to raise even though the parties do not. 3-W Lumber Co. v. Housing Auth., 287 Ark. 70, 696 S.W.2d 725 (1985); John Cheeseman Trucking Inc. v. Dougan, 305 Ark. 49, 805 S.W.2d 69 (1991).

The Arkansas Rules of Appellate Procedure state at Rule 2:

(a) An appeal may be taken from a circuit, chancery, or probate court to the Arkansas Supreme Court from:
1. A final judgment or decree entered by the trial court; . . .
9. An order certifying a case as a class action in accordance with ARCP Rule 23. . . .

This action was filed as a class action, and the complaint and its amendments specifically prayed that a class be certified pursuant to Arkansas Rule of Civil Procedure 23. The Chancellor entered his order on August 22,1989, finding that class certification was proper under Rule 23.

In addition, the complaint asked the lower court to: (i) find that the Arkansas Income Tax unconstitutionally discriminates against retired federal employees and retired employees of other states who receive or have received retirement benefits in excess of $6,000; (ii) enjoin the defendants from appropriating and expending any of the funds collected pursuant to a levy of the illegal income taxes and account for the amounts so collected to date; (iii) refund to the class the illegally collected income taxes, together with interest; and (iv) award reasonable attorney’s fees and reimbursement of costs under Ark. Code Ann. § 26-35-902 (1987).

On November 1,1990, the Chancellor entered his order and (i) found that the Arkansas income tax laws violated the principles of intergovernmental tax immunity and 4 U.S.C. § 111; (ii) enjoined the defendants from collecting the income tax found to be unconstitutional; (iii) ordered an accounting for and refund of the income taxes to all taxpayers represented by the class to the extent such taxes were collected in excess of the lawful taxes as determined by the court; and (iv) stated an intention to allow a reasonable part of the taxes to be refunded as attorney’s fees.

The class certification order entered on August 22, 1989, was an.appealable order pursuant to Arkansas Rule of Appellate Procedure 2(a)(9). International Union of Elec., Radio and Mach. Workers v. Hudson, 295 Ark. 107, 747 S.W.2d 81 (1988). Although the appellees have not raised the issue of timeliness of appeal of the class certification issue, timeliness of the appeal is also jurisdictional for this court. LaRue v. LaRue, 268 Ark. 86, 593 S.W.2d 185 (1980). However, whether the appellants failed to appeal that order in a timely manner is moot because we affirm for the reasons set forth below. The remaining issue on appealability is whether the balance of the appeal is properly before this court as a final order.

The test of finality and appealability of an order is whether the order puts the court’s directive into execution, ending the litigation or a separable branch of it. Mueller v. Killam, 295 Ark. 270, 748 S.W.2d 141 (1988). We have often held that in order for an order to be appealable it must be such a final determination of the issues as may be enforced by some appropriate manner. Estate of Hastings v. Planters and Stockmen Bank, 296 Ark. 409, 757 S.W.2d 546 (1988); Cigna Ins. Co. v. Brisson, 294 Ark. 504, 744 S.W.2d 716 (1988). The members of the class, in the court below, asked for relief common to the class, including a declaration that certain provisions of the income tax laws of the state are unconstitutional, an injunction against using the funds illegally collected, a refund to the class, and attorney’s fees for the attorney. The order of the Chancellor granted the prayer in favor of the members of the class on all of those issues. There appears to be no question that the Chancellor’s rulings are final as to those issues which are common to the class. The only real issue as to appealability before this Court is whether the final rulings on those issues are rendered nonappealable when coupled with the ruling awarding attorney’s fees in an unliquidated amount, and a requirement that the appellants submit a plan for providing notice to the class of their rights to a refund and establishing the procedures for such refunds.

We view the action left to be taken after the entry of the order appealed from, relating to notice to the members of the class (1) to be remote and collateral to the main issues before the court, (2) to require an examination of factors beyond the issues needed to be decided with the merits of the original complaint, and (3) to be a largely ministerial task similar to assessing the traditional items of cost. Collateral action, such as this, is action that does not make any direct step toward final disposition of the merits of a case, will not be merged in the final judgment, is not an ingredient of the cause of action, and does not require consideration with the main cause of action. Such collateral and ministerial orders need not be final for purposes of Arkansas Rule of Civil Procedure 54 nor Arkansas Rule of Appellate Procedure 2. In Farm Bureau Mutual Ins. Co. v. Southall, 281 Ark. 141, 661 S.W.2d 383 (1983) we were faced with a property insurer who was faced with a second action based upon a policy. The insurer had confessed judgment and tendered the policy limits, plus penalty and interest into the registry of the court in an action in Hot Spring County. The matter of attorney’s fees was still pending in the Hot Spring County action when the insured filed a second action in Pulaski County. We said in that action, “The only part of the Hot Spring County case still pending is that of determining the amount of the attorney’s fees to be assessed against [the insurer]. For- all practical purposes the original action is not pending.” 281 Ark. at 145, 662 S.W.2d at 386.

The same is true in the case at bar. The order appealed from in this matter otherwise terminates the action as it was requested by the moving parties in the complaint on the issue of the constitutionality of the tax, the injunction and the refund. We view the matter of the details of notice and attorney’s fees to be primarily collateral and ministerial and in furtherance of the enforcement of the court’s decision. It is not required under our interpretation of Rule 2 that such collateral ministerial matters be final. The order appealed from granted all the relief prayed for in the complaint and was thus final. See Terket v. Lund, 623 F.2d 29 (7th Cir. 1980).

Upon questioning during oral argument, counsel for the appellees was asked whether he was seeking additional attorney’s fees for which additional orders of the chancery court might be necessary. Counsel indicated that he reserved his rights to seek fees pursuant to 42 U.S.C. §§ 1986 and 1988. Does such a stated intention prevent the order from which appeal is taken from being final for the purposes of Rule 2? We think not. Such actions under 42 U.S.C. §§ 1986 and 1988 may in some cases even be by separate action. See Johnson v. Snyder, 639 F.2d 316 (6th Cir. 1981). Such a claim for attorney’s fees raises a collateral and independent claim for determination by the lower court, and thus a judgment on the merits on the other issues raised in the complaint is final as to the relief prayed of that court. See Obin v. Dist. No. 9 of the Int’l Ass’n of Machinists and Aerospace Workers, 651 F.2d 574 (8th Cir. 1981). It would be fruitless, and, under our interpretation of the rule, we are not required to anticipate all of the relief the parties may ask in the future when making determinations as to finality under Rule 2.

We thus hold that the lower court’s order on the issues of class certification, constitutionality of the tax, the injunction, the refund and the right to attorney’s fees to be final for purposes of appeal.

DID THE CHANCELLOR ERR IN INCLUDING WITH THE CERTIFIED CLASS MILITARY RETIREES AND RETIREES FROM OTHER STATES’ GOVERNMENTAL AGENCIES?

For its first ground for reversal, the appellants argue that the Chancellor erred in including within the certified class military retirees and retirees from other states’ governmental agencies. In order to understand the basis for the argument by the appellees, we must consider the United States Supreme Court case upon which the appellants’ case is based, Davis v. Michigan Dept. of Treasury.

Paul S. Davis is a former federal employee. He brought suit in Michigan seeking a refund of state taxes paid on his federal retirement benefits. He argued that the constitutional Doctrine of Intergovernmental Tax Immunity as codified at 4 U.S.C. § 111 prohibited discrimination against him, when compared with an employee retired from the employment of the State of Michigan. Section 111 allows states to tax pay or compensation for personal services as a federal officer or employee if the taxation does not discriminate against the federal employee because of the source of the pay or compensation. Michigan claimed that its laws did not violate section 111 because Mr. Davis was an “annuitant” rather than an employee and therefore section 111 did not protect him from discrimination. All of the courts in Michigan agreed with the state. Davis v. Dep’t of Treasury, 160 Mich. App. 98, 408 N.W.2d 433 (1987).

Mr. Davis asked the Supreme Court to review the matter. The Supreme Court found that section 111 did protect Mr. Davis because section 111 protected current federal employees as well as retirees. The Supreme Court reasoned that retirement pay, though not actually disbursed during the time an individual is working, is based and computed upon the individual’s salary and years of service, and was thus deferred compensation for past service. The Supreme Court reviewed the constitutional Doctrine of Intergovernmental Tax Immunity which bars those taxes that discriminate against a sovereign or those with whom it deals. In Davis v. Michigan Department of Treasury, the United States Supreme Court pointed out that section 111 constitutes an affirmative statutory grant of immunity from discriminatory state taxation equal to the constitutional Doctrine of Intergovernmental Tax Immunity, which applies between the states and the federal government and among the states themselves. Thus, if we find in this case that the Arkansas tax scheme discriminates against retirees from the federal government or other states when compared to the treatment given retirees from the State of Arkansas, we must find that the tax is in violation of the Constitutional Doctrine of Intergovernmental Tax Immunity. Phillips Chemical Co. v. Dumas Indep. School Dist., 361 U.S. 376 (1960).

The appellants argue that in light of our decision in Streight v. Ragland, 280 Ark. 206, 655 S.W.2d 459 (1983), the Arkansas statutory tax scheme is presumptively valid, which is true. However, that presumption is not conclusive. The appellees argue that Davis did not involve military retirees, which is also true. But again, the fact that the taxpayer in Davis was not a military retiree is not determinative of how this Court should rule.

The crux of this first point is whether the tax levied by the State of Arkansas discriminates against the taxpayers because of the source of the pay or compensation. If the source is the basis for the discrimination, then the state tax cannot withstand the constitutional prohibition found in the Doctrine of Intergovernmental Tax Immunity which forbids such discrimination. If the discrimination is based upon the nature of the compensation then the Doctrine does not forbid discrimination. The appellants argue that military pay is not a pension or deferred compensation, but actually represents reduced pay for reduced service, and thus the Arkansas tax is discriminatory only as to the nature of the compensation, i.e., compensation for military service rather than compensation for state civil service. We disagree with the appellants’ argument that military pay is reduced pay for reduced service, and believe that those cases which hold that military pay is actually deferred compensation or in the nature of a pension represent the better reasoned application law. See Young v. Young, 288 Ark. 33, 701 S.W.2d 369 (1986); Askins v. Askins, 288 Ark. 333, 704 S.W.2d 632 (1986), Womack v. Womack, 16 Ark. App. 108, 697 S.W.2d 930 (1985).

Appellants also argue that retirees from another state were not discriminated against under the Arkansas tax laws. Obviously that other state’s retirees’ pay is in the nature of a pension, just like the Arkansas state retirees. Thus the discrimination between the retired Arkansas civil service employee and the retiree from the civil service of another state is even more clear than in the case of the military retiree. The Arkansas tax levied upon the compensation of the military retirees and retirees from the civil service of other states is discriminatory when compared with the tax levied upon the compensation of the Arkansas civil service retirees. In other words, the tax discriminates based upon the source of the payment, since the source of one payment is the State of Arkansas and the source of the military pay is the federal government, and the source of the pay to a retiree from the civil service of another state is that other state’s government, and therefore such tax violates 4 U.S.C. § 111 and the Doctrine of Intergovernmental Tax Immunity. Finally, since the retirees of the governments of other states and the military retirees are part of the same class of plaintiffs here, and are discriminated against on the same basis, they are properly in the same class. Ross v. Arkansas Communities, Inc., 258 Ark. 925, 529 S.W.2d 876 (1975). The Chancellor is given wide latitude in certifying classes, and we find the certification in this case to be correct. International Union of Elec., Radio & Mach. Workers v. Hudson.

DID THE CHANCELLOR ERR IN AWARDING REFUNDS OF THE ARKANSAS INCOME TAX COLLECTED ON RETIREMENT INCOME OF THE CERTIFIED CLASS?

Next the appellants argue that the Chancellor erred in awarding refunds of the Arkansas income tax collected on retirement income of the certified class. The issue here is whether we are to apply retroactively our finding that the Arkansas tax is unconstitutional. Davis is of no value here since there the state of Michigan admitted that under their laws a refund was due. However there is other guidance. Chevron Oil Co. v. Huson, 404 U.S. 97 (1971) sets forth three factors which must be considered in determining the retrospective application of Davis. As made applicable to this case, they are first if the Davis decision establishes a new principle of law, either by overruling clear past precedent on which litigants have relied, or by deciding issues of first impression not clearly foreshadowed, then the decision need not be applied retroactively, otherwise it must. Hanover Shoe v. United Shoe Machinery Corp. 392 U.S. 481 (1968). Second, this court must weigh the merits and demerits of retroactive application based upon the prior history of the doctrine, the purpose and effect and whether retroactive application will further or retard its operation. Linkletter v. Walker, 381 U.S. 618 (1965). Third, if the retroactive application of Davis produces substantial inequitable results, and such hardship may be avoided, the rule need not be applied retroactively. Cipriano v. City of Houma, 395 U.S. 701 (1969).

The Supreme Court of Virginia has held that Davis need not be applied retroactively. See Harper v. Virginia Dept. of Taxation, 401 S.E.2d 868 (Va. 1991). The Virginia Court looked to American Trucking Associations, Inc. v. Smith,_U.S._, 110 S.Ct. 2323, 110 L.Ed. 2d 148, 58 U.S.L.W. 4704 (1990), and determined that the Chevron test must be used. After an analysis of Chevron the Virginia court held that retroactivity was not necessary. We respectfully disagree with that holding.

The appellees argue that regardless of the three Chevron factors, our ruling here must be applied retroactively, citing McKesson Corporation v. Division of Alcoholic Beverages and Tobacco, 110 S.Ct. 2238 (1990), Dep’t of Business Regulation, 110 L.Ed. 2d 17, (1990), American Trucking Associations, Inc. v. Smith,_U.S_, 110 S. Ct. 2323, 111 L.Ed.2d 148 (1990); Ashland Oil, Inc. v. Caryl, Tax Commissioner,_U.S_, 110 S.Ct. 3202, 111 L.Ed. 2d 734 (1990) and National Mines Corporation v. Caryl, Tax Commissioner,_U.S. _, 110 S.Ct. 3205, 111 L.Ed. 2d 740 (1990). Under either theory, we hold that Davis, 489 U.S. 803, must be applied retroactively.

In support of the satisfaction of the first Chevron prong, the appellants argue that Davis and thus presumably our holding here, would be a new principle of law and a case of first impression, and therefore need not apply retroactively. We disagree. We believe that neither Davis nor our opinion here establishes a new principle of law. A review of the extensive historical discussion in Davis will clearly show that the Doctrine of Intergovernmental Tax Immunity has been applied for decades. The fact that this issue has never been before this court, or the Supreme Court, on these facts does not make this a new principle of law or a case of first impression, just a fresh statement of the applicability of a long standing doctrine.

In support of the applicability of the second Chevron prong, the appellants argue that since the General Assembly immediately changed the law to comply with Davis retroactivity would not advance the Doctrine of Intergovernmental Tax Immunity. Again, we disagree. Obviously retroactive application will advance the doctrine for the members of this class. Also, a refusal to apply the doctrine in this case may retard the recognition of it in other matters which come before the Arkansas legislature which might fall under the scope of the doctrine.

As to the third prong, the appellants argue that evidence presented at trial showed that the retroactive application of this decision would create hardships for the State of Arkansas, its political subdivisions, and taxpayers. No doubt the State of Arkansas will suffer financial loss by making a refund to the members of this class who follow the procedures for such refund. However, the third prong of Chevron requires that the decision be applied retroactively unless a substantial inequitable result will occur as a result of the decision. If inequitable results occur whether retroactively is applied or not, we must make the ruling retroactive. Our decision in this case itself does not create the hardship. It will exist regardless of the outcome of this case. Clearly if the members of this class are not given the relief they have prayed for, they will be treated inequitably in that they will have paid an unconstitutional tax. Someone here will suffer, either the state or the taxpayers. We are not simply picking the class for refund based on need, nor are we penalizing the state. We are determining that since one of two inequitable results must occur, we are required to apply the ruling retroactively.

DID THE CHANCELLOR ERR IN ALLOWING REFUNDS TO MEMBERS OF THE CLASS WHO HAD NOT FILED AMENDED INCOME TAX RETURNS FOR 1985?

Next the appellants urge for reversal the proposition that the Chancellor erred in allowing refunds to members of the class who had not filed amended income tax returns for 1985. Appellants point to Ark. Code Ann. § 26-18-507 (1987) as the authority for its proposition. That statute sets forth the procedure for making a claim for a refund. The appellees argue that requiring strict compliance with § 26-18-507 by every member of the class would ignore one of the bases for class actions suits, i.e. to deal with these types of issues in a single action rather than requiring all members of a class to bring suit. Although this court has not ruled on this precise issue as applicable to tax refunds, there is ample authority for the appellees’ position and we adopt that reasoning. See Santa Barbara Optical Co. v. State Bd. of Equalization, 47 Cal. App.3d 244, 120 Cal. Rptr. 609, (1975); Ware v. Idaho State Tax Commission, 98 Idaho 477, 567 P.2d 423 (1977); Clark v. Lee, 273 Ind. 572, 406 N.E.2d 646 (1980); Thorn v. Jefferson County, 375 So.2d 780 (Ala. 1979); and Florito v. Jones, 39 Ill. 2d 531, 236 N.E.2d 698 (1968).

Our decision in International Union of Elec., Radio & Mach. Workers discusses the issues presented here as applicable to class actions generally, and we believe supports the Chancellor in his application of the rules to this class.

DID THE CHANCELLOR ERR IN AWARDING ATTORNEY’S FEES?

Finally, the appellants argue that the Chancellor erred in awarding attorney’s fees in this case. This assignment of error is based upon an argument that only when the attorneys for the class establish or preserve a fund for the class are they entitled to attorney’s fees. The appellants maintain that the fund here is established by the legislature as the Income Tax Refund Account for the payment of refunds to all taxpayers. The appellees maintain that the appellants have no standing to argue that attorney’s fees should be awarded under the common fund doctrine, citing Boeing Co. v. Van Gemert, 444 U.S. 472 (1980).

An order of the Chancellor, obtained though the efforts of the attorneys for the appellees, required the Income Tax Refund Account to be maintained at an amount not less than $8,000,000. Presumably this account would have been depleted or returned to the state treasury if not needed for other refunds if the order had not been entered. The attorneys for the class obtained the order which kept the fund at a minimum of $8,000,000 and thus we hold that the common fund was preserved by the attorneys for the class, and thus an award from that fund was proper.

Affirmed.

Special Justices Ray Baxter and Carolyn Clegg join in this opinion.

Holt, C.J., and Glaze and Corbin, JJ., not participating.

Dudley, Hays, and Newbern, JJ., dissent.

David Newbern, Justice,

dissenting. There is no final, appealable order in this case. See Ark. R. App. P. 2(a). We, therefore, lack jurisdiction to hear the appeal. Wilburn v. Keenan Companies, Inc., 297 Ark. 74, 759 S.W.2d 554 (1988); Kilgore v. Viner, 293 Ark. 187, 736 S.W.2d 1 (1987).

The Trial Court’s order establishes that the state taxes paid on retirement income received by the appellee class members were unlawfully collected and that the members are entitled, individually, to refunds for a period governed by the statute of limitations. The order then speaks of a “common fund” from which counsel representing the class will be entitled to be paid a fee. The amount of the “common fund” is undecided. We do not know how much money will be returned to the class or to any member. The amount they will receive will depend upon the amount of the attorney’s fees to be paid from the fund. A dissatisfied class or class member may wish to appeal with respect to that determination once it has been made.

In Estate of Hastings v. Planters and Stockmen Bank, 296 Ark. 409, 757 S.W.2d 546 (1988), and in Thomas v. McElroy, 243 Ark. 465, 420 S.W.2d 530 (1967), we determined that an order for a money recovery which is not reduced to a specific dollars and cents amount is not a final order. We said it must be such a final determination as may be enforced by execution or in some other appropriate manner. In this case, it is obvious that neither the class nor any claimant can proceed to execute the judgment. While it may be that “some other appropriate manner” would include presentations of individual tax return claims, if indeed there is a “common fund” from which recovery is to be claimed by individuals, the amount of that fund has not been ascertained.

If the question in this case were simply the amount a party was to pay his or her attorney, having nothing to do with the recovery to be awarded ultimately to the party, I might agree with the majority’s characterization of the issue as a “collateral” or “ministerial” one. The question here, however, is much more fundamental as it will determine the actual recovery to be had by the class and its individual members.

I predict there will be additional questions, such as prejudgment and post-judgment interest, which may, along with the attorney’s fee question, also give rise to questions for appeal in this matter. The reason for our finality rule is to discourage piecemeal appeals. Wilburn v. Keenan Companies, Inc., supra; Mueller v. Killiam, 295 Ark. 270, 748 S.W.2d 141 (1988). It should be applied in this case.

I respectfully dissent.

Dudley and Hays, JJ., join in this dissent.


source: Caselaw Access Project

author: Per Curiam. Newbern, J., Tom Glaze, Justice,

license: Public Domain

text:
    Mary Anne STEPHENS v. Jackson T. STEPHENS
    91-94
    810 S.W.2d 946
    Supreme Court of Arkansas
    Opinion delivered June 10, 1991

      Philip E. Dixon, W. Michael Reif, Norman Sheresky, and Lisa Roday, for appellant.

      C.J. Giroir, Jr., Sam Hilburn, Kenneth R. Shermin, Jerry C. Jones, and Judson C. Kidd, for appellee.
   Per Curiam.

Appellant Mary Anne Stephens (defendant below) brings this interlocutory appeal from the following orders;

Order of March 12, 1991
Order of March 14, 1991
Restraining Order of April 1, 1991
Order for Attorney’s Fees of April 11, 1991

Appellant Jackson T. Stephens has moved to dismiss the appeal on the grounds that appellant’s Notice of Appeal, filed on April 12,1991, is untimely as to the March 12 order. Moreover, he contends the orders appealed from are interlocutory and not appealable under Arkansas Rules of Appellate Procedure, Rule 2.

The order of March 12 contains findings of fact and conclusions of law in response to a request by the plaintiff for a protective order as to discovery matters and for closed hearings and trial. Citing Rule 26(c) of the Arkansas Rules of Civil Procedure, which gives the trial court broad authority to enter protective orders, and Ark. Code Ann. § 16-13-318 (1987), empowering chancery courts in domestic cases either upon application of all litigants or upon their own initiative, to hear such matters in chambers, the trial court found and concluded that such orders should be entered. The order of March 14, styled “Protective Order” constitutes the protective order adverted to in the March 12 order.

The order of April 1 is responsive to motions of both parties for restraining orders and generally enjoins either party from disposing of or removing from this jurisdiction any property belonging to the parties except by agreement, ordinary course of business or further orders of the court. “Ordinary course of business” is defined as including transactional moves in both parties’ stock and bond trading accounts at Stephens, Inc., including buying and selling of stocks or bonds and payments of calls and dividends to prevent a loss or realize a gain and for the general preservation of the assets reflected by these accounts. The order directs Stephens, Inc. to hold all assets of either party in trust pending a final determination as to ownership.

The order of April 11 is in response to defendant’s petition for attorney’s fees and recites that some $80,000 has been expended to date on attorney’s fees. The order recognizes the plaintiffs ability to pay suit money and the propriety of both parties having legal and accounting services. The order finds that $400 per hour for defendant’s New York counsel is not reasonable by Arkansas standards, that the defendant will be responsible for such portion of attorney’s fees from her separate assets but that such out-of-state fees would be considered by the court in the final disposition of assets. The order directs each party to submit monthly requests for fees and costs as they accrue and refers to the final disposition of the case as a determinant of fees.

Appellee’s motion to dismiss, as we have noted, is grounded on the premise that these orders merely establish the procedures by which the chancellor will administer this divorce case during discovery and trial and do not finally resolve any separable part of this action. Appellee cites John Cheeseman Trucking, Inc. v. Dougan, 305 Ark. 49, 805 S.W.2d 69 (1991); Ricks Pro Dive 'N Ski Shop v. Jennings-Lemon, 304 Ark. 671, 803 S.W.2d 934 (1991); Arkansas Department of Human Services v. Lopez; 302 Ark. 154, 787 S.W.2d 686 (1990); Tate v. Sharp, 300 Ark. 126, 777 S.W.2d 215 (1989); Budd v. Davis, 289 Ark. 373, 711 S.W.2d 478 (1986).

Appellant responds that these orders are “injunctive in nature” and therefore appealable under Rule 2. We disagree with that contention. We note that the orders restrain both parties from disposing of marital assets and do not purport to affect one party more or less than the other. They appear to be the type of preliminary order entered routinely in divorce suits and are expressly subject to further orders of the court as the case evolves. Appellant has not shown how the orders operate with finality in any sense and we can conceive of none.

There is a clear and distinct thread that binds our cases relative to appealability and that is that the order must end the litigation or some separable branch of it. See generally, Malone & Hyde, Inc. v. West & Co. of L.A., Inc., 300 Ark. 435, 780 S.W.2d 13 (1989); Cash v. Cash, 273 Ark. 32, 616 S.W.2d 13 (1981); Hyatt v. City of Bentonville, 275 Ark. 210, 628 S.W.2d 326 (1982); Bonner v. Sikes, 20 Ark. App. 209, 727 S.W.2d 144 (1987); Scoff v. Scoff, 5 Ark. App. 300, 635 S.W.2d 292 (1982).

Appellant contends that Ark. Code Ann. § 16-13-318 (1987), permitting private hearings in divorce actions is unconstitutional, citing Arkansas Television Co. v. Tedder, 281 Ark. 152, 662 S.W.2d 174 (1983). But the issue in Tedder was the extent to which the media can be denied access to a criminal trial and has only scant relevance to this case. Suffice it to say that we are unwilling to address the constitutionality of a legislative enactment in the context of a summary review of the appealability of interlocutory orders, particularly when the Attorney General has been afforded no opportunity to defend those enactments. Arkansas Code Ann § 16-111 -106(b) (1987). If there is an appeal after this case is finally concluded at the trial level, and the defendant can demonstrate prejudicial error attributable to the orders of March 12 or March 14, we see no reason it cannot be corrected in conventional fashion, by reversal and remand.

For the reasons stated, the appeal is dismissed.

Newbern, J.,

dissents and would permit the appeal on the basis of Ark. R. App. P. 2(a)(6);

Glaze, J., concurs; Corbin, J., not participating.

Tom Glaze, Justice,

concurring. Among other things, the appellant seeks to appeal the lower court’s order closing all proceedings of the parties’ divorce pursuant to Ark. Code Ann. § 16-13-318 (1987). She claims the closure is violative of her First Amendment rights to an open trial which, she argues, the state guarantees under Ark. Code Ann. § 16-10-105 (1987). Appellee responds the lower court’s order is interlocutory, not final, and therefore not applicable. While I agree with the majority that the appellant has no right to appeal under ARAP Rule 2, I write to express my concerns.

The chancellor’s rejection of the appellant’s First Amendment argument effectively eliminates any right she might have to an open trial. True, if she chooses later to appeal from the chancellor’s decree on the merits, appellant can then raise her First Amendment issue. But, even if this court agrees with her argument, this court generally decides chancery cases on de novo review, thereby avoiding further trial proceedings below. Thus, while appellant might prevail in her constitutional argument on appeal, the decision granting her an open trial, most likely, would prove moot as to her.

Appellant suggests that, because the chancellor’s closure ruling effectively precludes her from obtaining an enforceable decision granting her an open trial, she should be able to appeal under Rule 2(a)(2) of the Arkansas Rules of Appellate Procedure. However, that rule provides that an appeal may be taken from an order which in effect determines the action and prevents a judgment from which an appeal might be taken, or discontinues the action. Of course, the chancellor’s closure order here in no way determines the parties’ action even though it might be argued the appellant is effectively prevented from appealing the order. Such difficulty for appellant aside, her request to appeal under the circumstances described simply fails to come within the terms set out in Rule 2(a)(2). Nor can she appeal under the terms of Rule 2(a)(1) because the chancellor’s order fails to put the court’s directive into execution, ending the litigation or a separable branch of it. Festinger v. Kantor, 264 Ark. 275, 571 S.W.2d 82 (1978).

For the above reasons, I agree with the court’s decision to dismiss the appeal. The parties, of course, are free to better develop below the First Amendment — Right of Privacy constitutional arguments posed in this attempted appeal so this court can consider the constitutionality of § 16-13-318 in any future appeal from the lower court’s decree in this case.

       Of course, if appellant prevailed on appeal, the earlier closed trial proceeding, which is required to be reported in its entirety, would become open in the sense that a transcript would then be available. See In the Matter of Administrative Order Number 4, per curiam (May 6, 1991).


author: Jack Holt, Jr., Chief Justice.

text:
    WEINGARTEN/ARKANSAS, INC. v. ABC INTERSTATE THEATRES, INC. Plitt Southern Theatres, Inc., and Warco, Inc.
    90-151
    811 S.W.2d 295
    Supreme Court of Arkansas
    Opinion delivered June 17, 1991

      Wilson, Engstron, Corum & Dudley, by: Wm. R. Wilson, Stephen Engstrom; and Rose Law Firm, A Professional Association, by: Richard T. Donovan, for appellant.

      Eichenbaum, Scott, Miller, Liles & Heister, P.A., by: Leanard L. Scott, and Frank S. Hamlin, for appellees.
   Jack Holt, Jr., Chief Justice.

This case involves a dispute over a lease agreement. We granted certiorari to review the Arkansas Court of Appeals’ decision, as the issues involve matters of legal principles of major importance and significant public interest. See Weingarten/Arkansas, Inc. v. ABC Interstate Theatres, Inc., 31 Ark. App. 109, 789 S.W.2d 1 (1990).

On June 10, 1975, appellant Weingarten/Arkansas, Inc. (Weingarten), as owner of the Markham Plaza Shopping Center in Little Rock, leased 12,000 square feet of space in that center to appellee ABC Interstate Theatres, Inc. (ABC). The lease was for a term of 25 years, with an annual rent of $54,000, payable in monthly installments of $4,500. In addition, ABC agreed to pay an additional rent equal to 10 % of the gross receipts for each year in which receipts exceeded $540,000.

ABC subsequently assigned the lease to appellee Southern Theatres, Inc. (Plitt) in 1978, who, in turn, assigned the lease to appellee Warco, Inc. (Warco), in 1981. It is undisputed that in assigning the lease, both ABC and Plitt agreed to remain responsible under its terms.

Warco defaulted on the lease in July, 1986, when it ceased making payments. In March, 1987, Weingarten filed suit against the appellees in the Pulaski County Circuit Court alleging joint and several liability for Warco’s default.

In its second amended complaint, Weingarten sought possession of the premises without terminating the lease agreement in accordance with section 18.03(b) of its lease agreement. The complaint declared that Weingarten “must obtain immediate possession of the premises, in order to mitigate damages by cleaning and generally making such repairs and improvements as are necessary and to show the premises to prospective tenants.” It prayed for a writ of possession and “for all unpaid back rent and rent which continues to accrue.”

Warco filed an answer to the second amended complaint on April 22,1987, stating that it had quit possession of the premises, and praying that the complaint against it be dismissed.

The trial court granted a writ of possession to Weingarten on May 5,1987. Thereafter, Weingarten conducted a market survey to determine the best rental value for the space and began negotiations with a number of prospective tenants. Weingarten eventually arranged to lease the premises to two retail stores, one of which was to occupy 8,000 square feet and the other to occupy the remaining 4,000 square feet. The leases were of shorter duration and higher rent per square foot.

Thereafter, ABC and Plitt amended their answer to Weingarten’s first and second amended complaints by affirmatively alleging that Weingarten failed to mitigate damages for the period of August 1, 1986 through February, 1988. In addition, they filed a counterclaim for declaratory judgment, requesting the trial court to construe the lease and subsequent assignments as having been “constructively terminated” by Weingarten as to any future liability of ABC and Plitt for the remainder of the lease term. Specifically, ABC and Plitt alleged that Weingarten failed to mitigate its damages by refusing to accept another theatre business for the same rent and, furthermore, that its conduct in completely changing the premises to accomodate retail stores, rather than another theatre enterprise, constructively terminated the lease. Alternatively, they requested a credit for any rents from new lessees, over and above the amount of base rent in the original lease, for the remainder of the term.

A trial was conducted before the circuit judge sitting as jury. The parties stipulated as to the provisions in the lease, Warco’s default and abandonment of the building, and the appellees’ joint and several liability.

The trial court found that Warco had made its last payment on July 26, 1986, and that charges were due and payable under the terms of the lease from July 1, 1986, through May 5, 1987 (the date Weingarten was granted a writ of possession). The amount owed consisted of rent and general property taxes and totalled $56,878.24. The trial court further found that Weingarten had adequate opportunities, since May 5,1987, to rent the premises to a Texas based cinema corporation, upon the same terms and conditions set forth in the lease, but refused to do so. It recited the following conclusions of law: 1) Arkansas law imposes a duty on the landlord to mitigate its damages and such duty arose when Weingarten was awarded a writ of possession; 2) Weingarten failed to mitigate is damages when it refused to rent the premises to the Texas theatre corporation and thus all damages ceased accuring as of May 5,1987; 3) Weingarten was entitled to damages from the appellees, jointly and severally, in the amount of $56,878.24; and 4) Weingarten’s remodeling and reletting of the premises did not amount to an acceptance of Warco’s surrender of the property; however, the appellees were entitled to a credit against any future liability to the extent of any payments made by present and future tenants. The counterclaim for declaratory relief was otherwise dismissed with prejudice.

On appeal to the Arkansas Court of Appeals, Weingarten raised five points of error, all challenging its duty to mitigate. It claimed damages of $107,367.24, allegedly sustained from July, 1986 through February, 1988. The appellees cross-appealed, claiming that the trial court erred in finding that Weingarten’s actions did not amount to an acceptance of surrender of the lease.

The court of appeals declined to address Weingarten’s arguments, as it agreed with the appellees that Weingarten’s conduct, in refusing to relet the premises to an interested theatre chain and in completely altering the nature of the premises, was so inconsistent with its claim to be acting for the benefit of the appellees, that it amounted to an acceptance of surrender of the lease agreement. Thus, the appellate court affirmed the trial court’s judgment holding the appellees liable for lease rentals due before May 5, 1987, but reversed that portion of the judgment holding the appellees liable for any obligation on the lease after that date.

Weingarten’s petition to the court of appeals for rehearing was denied. On review, we disagree with the decisions of both the court of appeals ?.nd the circuit court and, accordingly, reverse and remand to .he circuit court.

Included in Weingarten’s petition for review is the question upon which our decision hinges: Can the parties to a lease agreement provide that a landlord’s reentry and reletting of the premises will not constitute an acceptance of surrender and, further, that the landlord has no duty to mitigate upon the tenant’s default? We hold that they can, if expressly stated in their contract.

The traditional view, under common law, gives a landlord three options when a lessee abandons the premises: 1) he may refuse to accept abandonment; let the premises lie idle, and sue the tenants as the rent matures; 2) accept the keys as a surrender of possession, thereby terminating the lease and reenter on his own account; or 3) reenter and relet for the tenant’s account and hold the tenant liable for any difference in the agreed rent and that of the new tenant. See Grayson v. Mixon, 176 Ark. 1123, 5 S.W.2d 312 (1928); R. Cunningham, W. Stoebuck and D. Whitman, The Law of Property, § 6.80, 403 (1984).

Weingarten asserts that in order to avoid any disagreement as to its remedies under these general principles, the parties negotiated a lease agreement containing the following pertinent provisions:

18.03 This Lease and the term and estate hereby granted and the demise hereby made are subject to the limitation that if and whenever any Event of Default shall occur, the Landlord may, at its option, in addition to all other rights and remedies given hereunder or by law or equity, do any one or more of the following:
(a) Terminate this Lease, in which event, Tenant shall immediately surrender possession of the premises to Landlord;
(b) Enter upon and take possession of the leased premises and expel or remove Tenant and any other company therefrom, with or without having terminated the Lease;
provided, however,that Landlord shall not expel or remove Tenant from the leased premises or take possession thereof except pursuant to a judgment entered or writ issued in an appropriate legal proceeding.
18.04 Exercise by Landlord of any one or more remedies hereunder granted or otherwise available shall not be deemed to be an acceptance of surrender of the premises by Tenant, whether by agreement or by operation of law, it being understood that such surrender can be effected only by the written agreement of Landlord and Tenant.
* * * *
18.06 In the event that Landlord elects to repossess the premises without terminating the Lease, then Tenant shall be liable for and shall pay to Landlord ... all rent and other indebtedness accrued to the date of such repossession, plus rent and other indebtedness hereunder required to be paid by Tenant to Landlord during the remainder of the lease term until the date of expiration of the term as stated in Article I diminished by any net sums thereafter received by Landlord through reletting the leased premises during said period (after deducting expenses incurred by Landlord as provided in Section 18.07 hereof). In no event shall Tenant be entitled to any excess of any rent (or rent plus other sums) obtained by re-letting over and above the rent herein reserved. Actions to collect amounts due by Tenant as provided in this Section 18.06 may be brought from time to time, on one or more occasions, without the necessity of Landlord’s waiting until expiration of the lease term.
18.07 In case of an Event of Default, Tenant shall also be liable for and shall pay to Landlord . . . broker’s fees incurred by Landlord in connection with re-letting the whole or any part of the premises; the costs of removing and storing Tenant’s or other occupant’s property; the costs of repairing, altering, remodeling or otherwise putting the leased premises into condition acceptable to a new tenant or tenants, and all reasonable expenses incurred by Landlord in enforcing Landlord’s remedies, including reasonable attorney’s fees. . .
18.08 In the event of termination or repossession of the premises for an Event of Default, Landlord shall not have any obligation to re-let or attempt to re-let the premises, or any portion thereof, or to collect rental after re-letting; and in the event of re-letting Landlord may re-let the whole or any portion of the premises for any period, to any tenant, and for any use and purpose. [Emphasis added.]

Here, Weingarten elected to proceed with remedies under its contract, pursuant to sections 18.03(b) and 18.06, and resume possession of the premises without accepting surrender of the lease agreement. Such a “surrender clause” is well recognized in the law. Normally, if the landlord reenters and resumes the use and enjoyment of the premises for his own account, he terminates the lease, as a matter of law, insofar as his right to recover subsequently accruing rent is concerned. 49 Am. Jur. 2d, Landlord and Tenant §620, 592 (1970). See also Hayes v. Goldman, 71 Ark. 251, 72 S.W. 563 (1903). This rule will not hold true where the lease, via a “Surrender Clause,” expressly allows a resumption of possession without surrender. See Id.; 52 C.J.S. Landlord and Tenant § 493, 433 (1963).

In his treatise, Friedman on Leases, Vol. 2 § 16.302 (3d ed. 1990), Milton Friedman cautions, however, that in order for a “surrender clause” to be upheld, it must expressly define the parameters under which a landlord may reenter and assume possession and still hold the tenant liable. Such a clause should, for example, “permit the landlord to make a change in the character of the premises, structurally or otherwise.” Section 18.07 of the lease meets this requirement by holding the tenant liable for “the costs of repairing, altering, remodeling, or otherwise putting the leased premises into conditions acceptable to a new tenant or tenants. . .” Section 18.08 further allows Weingarten to “re-let the whole or any portion of the premises for any period, to any tenant, and for any use and purpose.” As stated by the Indiana Court of Appeals: “As long as the landlord does no more than exercise the rights accorded to it under the lease, the lessor’s conduct will not result in a surrender of the lease by operation of law.” Grueninger Travel Serv. of Fort Wayne, Ind., Inc. v. Lake County Trust Co., 413 N.E.2d 1034 (1980). The lease provisions here were, admittedly, quite comprehensive. As a result, however, we do not find that Weingarten, in remodeling the premises and reletting to two retail businesses, acted outside its rights provided by the lease agreement.

We remand the case to the Pulaski County Circuit Court for a determination of damages not inconsistent with this opinion.

Corbin and Brown, JJ., not participating.


author: Steele Hays, Justice.

text:
    Alvin Bernal JACKSON v. STATE of Arkansas
    CR 90-257
    811 S.W.2d 299
    Supreme Court of Arkansas
    Opinion delivered June 17, 1991

      William R. Simpson, Jr., Public Defender, Thomas B. Devine III, Deputy Public Defender, Jerry J. Sailings, Deputy Public Defender, by; Didi H. Sailings, Deputy Public Defender, for appellant.

      Winston Bryant, Att’y Gen., by: Clint Miller, Senior Asst. Att’y Gen., for appellee.
   Steele Hays, Justice.

Appellant Alvin Bernal Jackson was charged with the capital felony murder of Charles Colclasure during an aggravated robbery which occurred on July 30, 1989. Additional counts of the information alleged burglary and theft of property committed on the same date. Other counts included two attempted capital murders on August 2,1989. The trial court granted a motion to sever the July 30 offenses from the August 2 offenses. Jackson was tried and convicted of capital felony murder, burglary, and theft of property and sentenced to life without parole. Sentences on the lesser offenses were enhanced by reason of three prior felony convictions.

Alvin Jackson appeals from the judgment, asserting that the trial court erred in denying his motion to suppress statements he gave to the police while in custody and used against him in the trial. Finding no error, we affirm the judgment of conviction.

This case involves a series of incidents in an area of Little Rock known as the “East End.” The incidents occurred between July 29 and August 2 of 1989. Subsequently they were found to be interrelated. On July 29 there was a disturbance at National ByProducts involving two black males using a .25 calibre pistol. On July 30, a Sunday, Mr. Charles Colclasure went to his office at International Business Forms (IBF) at 1600 East 26th Street in Little Rock but never returned home. On July 31 his wife reported his disappearance to the Little Rock police. Later that day Mr. Colclasure’s body was found in the Arkansas River some two or three miles from IBF. He had been shot numerous times with rat shot, but the cause of death was determined later to be a traumatic injury. On August 1 Colclasure’s 1985 gray Buick Riveria was found in the 500 block of Bender Street in the East End.

In the early morning of August 2 a guard at Little Rock Crate & Basket Company in the East End discovered two black males inside a security fence engaged in an attempted burglary. Shots were exchanged as the two men fled. One of the men was firing rat shot.

At 1:17 p.m. on August 2 the police responded to a disturbance call from Carlon Marshall at 809 Carson in the East End. He stated that his uncle, Alvin Jackson, and brother, Charles Jackson, had been chasing him with a weapon. He explained that he had been riding with them in a grey Buick automobile which had been impounded the previous day. He told the police that Alvin and Charles Jackson had killed the man who owned the car. Marshall gave the police a description of Alvin and Charles Jackson and both were apprehended in the area within the hour. As Alvin Jackson was being apprehended the police were informed by radio of seven outstanding warrants against him—one for failure to appear, one for fleeing from arrest and five for traffic offenses.

During the afternoon Alvin and Charles Jackson were interrogated separately. Alvin Jackson gave a statement denying any involvement in the murder of Charles Colclasure but admitting that he had driven the Buick, which he said had been given to him by an acquaintance named Eric. During the course of the interrogation the police obtained a television set from Alvin Jackson’s residence which belonged to IBF. In the late afternoon or early evening Alvin Jackson admitted having robbed and killed Charles Colclasure. He confessed soon thereafter to the episode at the Little Rock Crate & Basket Company.

Appellant’s theory of error is threefold: One, his statements were the proximate result of an illegal arrest, there being no probable cause to charge him; two, his statements came after he had invoked his right to remain silent; and, three, he did not knowingly and intelligently waive his Fifth Amendment rights against self-incrimination. We can find no merit in the arguments.

Probable cause for appellant’s arrest can be grounded on one or all of three factors. Car Ion Marshall reported to the police that Alvin Jackson had accosted him with a weapon, a direct accusation of a crime by the purported victim. W. LaFave, Search and Seizure § 3.4 (1987); J. Hall, Search and Seizure § 5.31 at 224 (Supp. 1988). Marshall also reported to the police that appellant and Charles Jackson had murdered Charles Colclasure, whom the police by then knew to have been the victim of a homicide. Lastly, the police learned in timely fashion that appellant was named in seven warrants of arrest, the validity of which is not challenged. Viewed separately or collectively, the police had ample reason to take Alvin Jackson into custody based on information they had no reason to question. Woodall v. State, 260 Ark. 786, 543 S.W.2d 957 (1976).

Turning to the allegation that the statements were obtained after appellant asserted his right to remain silent, Jackson points out that the first statement he gave the police admitted only that he and Charles had been in the Colclasure automobile. As the statement was being concluded by the interrogating officer he asked Jackson, “Okay. Is there anything else you want to say?” Jackson said, “No, sir.”

Appellant insists that by his response to the final question he made it clear that he was involving his right to remain silent, that under the rationale of Miranda v. Arizona, 384 U.S. 436 (1966), he was entitled to have that right scrupulously honored. He urges that when an accused in custody indicates in any manner that he does not wish to submit to further interrogation, the police may not continue to question. But here it is entirely clear, as the trial court found, that rather than invoking his right to remain silent, the appellant was merely declaring that there was nothing he wished to add to his statement. Similar contentions have been considered by other courts and found wanting: State v. Lawson, 144 Ariz. 547, 698 P.2d 1266 (1985); Commonwealth v. Messere, 14 Mass. App. 1, 436 N.E.2d 414 (1982).

Finally, appellant maintains that from a totality of the circumstances it is evident he did not knowingly and intelligently waive his Fifth Amendment rights against self-incrimination. He cites the testimony of Dr. Glenn White, a clinical psychologist, who administered tests to the appellant to gauge his intelligence, that he determined Jackson’s IQ to be borderline, or possibly mildly retarded. He testified that Jackson’s school records and 1986 IQ test of 74 more nearly reflected Jackson’s true intelligence, which he estimated to be between 74 and 81.

We have reviewed the testimony elicited at the omnibus hearing independently of the trial court’s findings and do not find ourselves at odds with the trial court. See Giles v. State, 261 Ark. 413, 549 S.W.2d 479 (1977). There is the testimony of the appellant that an officer shoved him against the police car when he was being arrested and his assertion that he was promised a measure of leniency if he would confess, but we cannot say those claims are persuasive against the proof to the contrary. There were issues of credibility and the trial court’s findings are largely determinative. Harvey v. State, 272 Ark. 19, 611 S.W.2d 762 (1981).

Under Ark. Code Ann. § 16-91-113 (1987), as put into effect by our Rule 11(f), we consider all objections brought to our attention in the abstracts and briefs in appeals from a sentence of life imprisonment or death. In this case we find no prejudicial error in the points argued or in the other objections abstracted for review.


author: David Newbern, Justice.

text:
    Vernon Keith FRANKS v. STATE of Arkansas
    CR 90-265
    811 S.W.2d 301
    Supreme Court of Arkansas
    Opinion delivered June 17, 1991

      David R. Goodson, Greene County Public Defender, for appellant.

      Winston Bryant, Att’y Gen., by: Sandra Moll, Asst. Att’y Gen., for appellee.
   David Newbern, Justice.

Vernon Keith Franks appeals from his conviction of murdering his grandmother, Lou Emma Franks. He contends the Trial Court erred in failing to grant his motion for acquittal due to mental incapacity at the time the crime was committed. He also argues he was entitled to a directed verdict on that issue. In addition, Franks contends a statement he made while in custody should not have been admitted into evidence and the Court erred by not declaring a mistrial because the jury obtained a dictionary for the purpose of looking up the definition of “premeditated” without notice to the Court or counsel.

We affirm the conviction because, (1) the statute allowing a court to dismiss a charge due to mental incapacity is permissive only, (2) there was evidence on which the jury could base its decision that Franks was not mentally incapacitated at the time of the crime, (3) there was evidence from which the court could have concluded that the statement Franks made while in custody was voluntary, resulting from an initiation by Franks of a conversation with a police officer despite the fact that Franks had earlier insisted on “taking the Fifth” and speaking with a lawyer, and (4) the jury’s procurement of a dictionary without notice to the court or the parties was improper, but no prejudice resulted.

Allen Hicks was an investigator with the Greene County Sheriffs Department. He testified he was called on September 9, 1988, to a residence occupied by the appellant, Keith Franks, and Lou Emma Franks. Mrs. Franks’ body had been found in the yard outside the house lying under a bush. Her head was severely lacerated, and she had blood splashes on her feet. Hicks examined the area and it did not appear to him that a struggle had taken place in the vicinity of the body, nor did it appear that the body had been dragged there.

Hicks went to the residence where he found Keith Franks in the kitchen speaking to Franks’ mother on the telephone. Franks was saying to his mother that his grandmother was dead and apparently had been shot. Hicks asked if Franks knew what had happened to his grandmother, and Franks said he had heard her go out with the dog but she had not returned for about an hour, and he had gotten worried and called relatives to help him look for her, although he had not gone outside to search. Hicks read Franks his rights and told Franks he would like him to come to the sheriffs department to give a formal statement. At that, Franks replied that if he were going to the station he would “plead the Fifth” and wanted to speak to a lawyer. He was taken to the department by another officer.

Hicks and other officers remained at the residence. They found a number of areas and items in the house on which there were stains they suspected to be blood stains. Wet clothing was found on a closet floor, and part of the carpet was wet where apparently there had been an attempt to wash out the stains. Stained towels were found in a dryer. The items and places were later analyzed and found to contain blood.

When Hicks arrived at the sheriffs department later, he was told by Officer Reeves that Franks had asked to speak to him. He had Franks delivered to his office where he asked what Franks wanted. Franks said he wanted to tell what had happened. Hicks readvised Franks of his rights, and a statement was taken. The statement essentially repeated what Franks had said earlier.

After Franks was charged with the crime, he was sent to the State Hospital for mental evaluation. He was diagnosed as schizophrenic and determined to be unable to assist in his own defense. Later, after some five months of treatment, a Dr. Brandt of the State Hospital wrote to the Court that Franks was able to assist in his own defense, but “lacked the capacity to appreciate the criminality of his conduct or to conform his conduct to the requirements of the law” at the time of the crime.

1. Mental capacity

a. Motion to acquit

Franks moved for acquittal in accordance with Ark. Code Ann. §5-2-313 (Supp. 1989) which provides:

On the basis of the report filed pursuant to § 5-2-305, the court may, after a hearing if a hearing is requested, enter judgment of acquittal on the ground of mental disease or defect if it is satisfied that, at the time of the conduct charged, the defendant lacked capacity, as a result of mental disease or defect, to conform his conduct to the requirements of law or appreciate the criminality of his conduct. . . .

At the hearing on the motion, Dr. Marino, a psychiatrist from the State Hospital, testified that Franks was delusional and mentally ill, and with the exception of the delusions, his illness was in remission. The delusions included, but were not limited to thoughts that Franks was a member of the CIA, the FBI, and a deputy provost marshall. Franks’ mother testified about similar delusions Franks had had and that he also had a delusion about his father being someone named “Apocalypse Franks.”

In response, the State pointed out that when Hicks asked Franks to come to the Sheriffs office to make a formal statement, Franks wanted to “plead the Fifth” and asked for a lawyer. The State also noted that Franks attempted to eliminate evidence of the crime and thus seemed to appreciate the criminality of his acts.

The motion was denied, and we cannot say that was error. The basis of the motion is the statute quoted above which clearly says that the Court may acquit on the basis of the motion, but there is no requirement that it do so. Construing a predecessor to the current statute, this Court wrote in Westbrook v. State, 274 Ark. 309, 624 S.W.2d 433 (1981), that “the statute permits the trial judge to acquit the defendant ‘in cases of extreme mental disease or defect where the lack of responsibility on the part of the defendant is clear,’ . . .” While there was strong evidence that Franks has been psychotic for years, we cannot say the Trial Court erred in finding that it was not “clear” that Franks was not responsible for his acts at the time the crime was committed.

b. Directed verdict

At the trial, Dr. Bunten, a State Hospital psychologist, and Dr. Marino testified about Franks psychotic condition, and both opined that Franks was not responsible for his acts at the time of the crime. That evidence was supplemented by testimony of Franks’ mother and an aunt, both of whom gave more information about bizarre delusional conduct on his part.

Dr. Bunten and Dr. Marino conceded that their opinions about Franks’ condition at the time the crime occurred had to be based on his history, and they could not say with certainty that he was delusional on that date or that he was suffering any particular delusion having to do with his grandmother.

The State presented the testimony of Dr. Austin, a psychiatrist who had not examined Franks. Dr. Austin responded to a hypothetical question by stating, in effect, that a person who was a severe schizophrenic could have done a killing like the one in question here either in response to a delusion or in response to a longstanding argument. Testimony had been presented indicating that Franks and his grandmother had argued over time about Franks’ lack of employment.

Franks cites no authority for the proposition that the Court should have directed a verdict in his favor. In Campbell v. State, 265 Ark. 77, 576 S.W.2d 938 (1979), Campbell moved for directed verdict on the basis of lack of mental capacity to commit the crime. We noted that the lack of capacity defense is an affirmative defense to be established by the defendant by a preponderance of the evidence, the question being primarily for the jury, and the judge may direct a verdict only when no fact issue exists. See also McCaslin v. State, 298 Ark. 335, 767 S.W.2d 306 (1989), in which we affirmed a trial courts’ denial of a motion for directed verdict based on the affirmative defense of entrapment because the defendant failed to prove entrapment as a matter of law; Owens v. State, 300 Ark. 73, 777 S.W.2d 205 (1989), also holding that an affirmative defense is established as a matter of law only if there are no factual issues remaining to be resolved by the trier of fact.

While we agree there was very strong evidence that Franks lacked capacity to appreciate the criminality of his acts at the time the crime was committed, we cannot say he had established the defense as a matter of law. If the jury were to find that Franks killed his grandmother and then took fairly elaborate, although not at all successful, steps to hide the crime, that was to be considered on the issue of capacity. So also was Franks’ “pleading the Fifth” and his request for a lawyer. Franks’ mental capacity was a factual issue, and we cannot hold it was error to allow the jury to decide it.

2. The statement

Franks’ argument with respect to keeping his statement out of evidence is that Officer Hicks interviewed Franks after he had said he wanted a lawyer, but before he was successful in contacting a lawyer. If Officer Hicks initiated the contact, that would clearly have been prohibited by Edwards v. Arizona, 451 U.S. 477 (1981). At a pretrial hearing on Franks’ motion to suppress the statement, Officer Reeves, the officer who told Hicks that Franks wanted to talk to Hicks after Hicks reached the sheriff’s department, testified he could not personally say he heard Franks make such a request. Officer Hicks testified that when Franks was brought to him, he asked Franks if he had called his attorney, and Franks replied that he could not get in touch with him. Hicks then testified that Franks “said at that time he wanted to talk to us.”

In Findley v. State, 300 Ark. 265, 778 S.W.2d 624 (1989) , we pointed out that when an accused initiates contact with police authorities after having requested counsel the right to counsel may be considered waived. If Hicks’ testimony is to be believed, Franks initiated the contact resulting in his statement, and there was no Sixth Amendment violation. The question is one of credibility. Segerstrom v. State, 301 Ark. 314, 783 S.W.2d 847 (1990) ; Findley v. State, supra. We cannot say the Court erred in denying the motion.

3. The dictionary

Without the knowledge of the Court or counsel, the jurors requested that the bailiff bring them a dictionary so they could look up the definition of “premeditation.” The bailiff complied with the request. Franks moved for a new trial, and both sides stipulated that the incident occurred as described above. Franks contends it was error to deny his motion for a new trial.

The Trial Court concluded it was error for the jurors to have received the dictionary but, after reading the dictionary definition and the instruction given to the jury on premeditation, held that the error was not prejudicial. The jury was instructed on premeditation as follows:

In order to find that Vernon Keith Franks acted with a premeditated and deliberated purpose, you must find that he formed that intention before acting as a result of a weighing in the mind of the consequences of a course of conduct as distinguished from acting on impulse without the exercise of reasoning powers.

The definitions seen by the jury in the dictionary were:

Premeditate ... to think over, premeditate;... to think out, plan or scheme beforehand, vi. to think or meditate beforehand.
Premeditation ... a premeditating; specifically, in law a degree of planning and forethought sufficient to show intent to commit an act.

We do not reverse the refusal to grant a new trial unless we find the trial court abused its discretion. Mitchell v. State, 299 Ark. 566, 776 S.W.2d 332 (1989); Langston v. Hileman, 284 Ark. 140, 680 S.W.2d 89 (1984).

We find no abuse of discretion here. An annotation at 35 ALR4th 626, 645, cites many cases in which a jury has somehow obtained a dictionary and looked up words, and it has been held that no prejudice resulted. While we agree that, generally, it is misconduct for a jury to seek out reading material without the knowledge of the court and the parties, prejudice does not occur in every case. We tend to agree with the Trial Court that the dictionary definitions quoted above were clearer than the lawyer words “conscious object” found in the instruction and that nothing in the dictionary definitions was prejudicial to Franks.

Affirmed.


author: Tom Glaze, Justice.

text:
    ARKANSAS ALCOHOLIC BEVERAGE CONTROL DIVISION, Robert S. Moore, Jr., Administrator; and Dr. Carl Hyman, James N. Walters, F.E. Scott, Robert J. Jones and Reid Holiman v. Kenneth M. COX, Jr., d/b/a The Cotton Patch, Inc., And James M. Cox
    91-6
    811 S.W.2d 305
    Supreme Court of Arkansas
    Opinion delivered June 17, 1991

      Donald R. Bennett, for appellants.

      Hoofman & Bingham, P.A., by: Clifton H. Hoofman and Friday, Eldredge & Clark, by: Michael G. Thompson, for appellees.
   Tom Glaze, Justice.

This appeal involves the appellees’ (Coxes’) request to transfer the location of a retail liquor and beer permit to a site on Highway 67 near the Miller CountyHempstead County line. At approximately the same time, a competitor, Margaret Gleason, made a similar request for a permit for a store to be located within a few hundred feet from where the Coxes would have their outlet. The Director of the Arkansas Alcoholic Beverage Control Division (ABC) denied both requests. However, the Coxes and Gleason appealed the Director’s decision to the ABC Board, which granted Gleason’s application, but then denied the Coxes’ request.

The Coxes, who were intervening parties in Gleason’s ABC Board proceeding, appealed the Board’s decision granting a liquor permit to Gleason and that appeal was filed in the Sixth Division, Pulaski County Circuit Court. The Coxes also appealed the Board’s denial of their permit request, but their appeal was lodged in the Second Division, Pulaski County Circuit Court. While these cases appeared to be companion cases, they were not consolidated. However, depositions of two of the ABC Board members, James N. Walters and Reid Holiman, were taken in the Sixth Division proceeding and, over ABC’s objection, admitted into evidence at the trial in the Second Division Circuit Court.

After the trial judge reviewed the records of the Coxes and Gleason proceedings before the ABC Board, the Board’s orders rendered in those hearings, and the Walters and Holiman depositions, he reversed the Board’s denial of the Coxes’ liquor permit request. The ABC Board appeals the trial court’s decision, arguing the lower court erred (1) in admitting into evidence and considering the Gleason record before the Board and the depositions of the two Board members, (2) in ruling the two Board members had improperly engaged in ex parte communications concerning the Coxes’ and Gleason’s applications and (3) in deciding no substantial evidence existed to support the Board’s denial of the Coxes’ liquor permit request.

The ABC Board’s first two arguments focus on separate communications made by Senator Jon Fitch and Betsy Wright of the Governor’s Office to Board members Holiman and Walters regarding the pending requests of Gleason and the Coxes. Walters said that Ms. Wright called and told him the Governor’s Office had “received considerable phone calls about the Cox case, that Walters should be aware there had been calls made, and that ‘they’ knew he [Walters] would do what was right.” Holiman testified that Senator Fitch contacted him about the Gleason’s and Coxes’ requests and wanted to know how Holiman intended to vote. Holiman said that he told Fitch that “he [Fitch] couldn’t expect me to try and help him politically in less than a day, if I could do it.” Holiman said, “[Fitch]” wouldn’t tell me where he was coming from although I believe I know.” Both Walters and Holiman testified that these contacts did not affect their votes on either the Coxes’ or Gleason’s applications.

However, in reversing the Board’s denial of the Coxes’ application, the trial judge, in his order, stated, in addition to finding the evidence was insufficient to support the Board’s denial, that the foregoing contacts with the two Board members had violated the Administrative Procedure Act and that those discussions (contacts) “so tainted the entire proceeding that there is an appearance of impropriety.” The specific statutory provision to which the judge referred is Ark. Code Ann. § 25-15-209(a)(1987). That law in relevant part provides that ABC Board members or employees assigned to render a decision in any case shall not communicate, directly or indirectly, in connection with any issue of fact with any person or party nor in connection with any issue of law, with any party or his representative, except upon notice and opportunity for all parties to participate.

In its argument, the Board does not actually question the court’s finding that the two contacts described above violated § 25- 15-209(a). Instead, it contends the Board members’ depositions relating or describing the two contacts should not have been admitted and considered by the trial judge because Ark. Code Ann. § 25-15-212(g) limited his review of the Coxes’appeal to the record made by the parties in the ABC Board proceeding. In other words, because the Coxes had not presented evidence regarding the ex parte communications in their appeal to the Board, the trial court could not later consider those matters in its review. We disagree.

Section 25-15-212(g) not only provides that the court’s administrative review shall be conducted by the court without a jury and confined to the record before the agency, it also states that, in cases of alleged irregularities in procedure before the agency, not shown in the record, testimony may be taken before the court. In addition, Ark. Code Ann. § 25-15-212(d)(4) (1987) provides that a court may require or permit subsequent corrections or additions to the record. Here, the third-party contacts made to Board members Holiman and Walters violated § 25-15-209(a) and, as procedural irregularities, were properly allowed by the trial court as added testimony describing those contacts and communications.

The Board alternatively claims that even if the contacts were properly considered by the trial court, the third party conversations, as related, amounted to “a big nothing,” were de minimus and no prejudicial error was shown. The trial court found these violations alone would require the Board’s order to be set aside, but, later in the same order, the court said that it did not intend to suggest either member of the Board had been compromised. Regardless of whether the ex parte communications alone warrant reversal of the Board’s decision denying the Coxes a permit, we believe the trial court must be affirmed based upon its further holding that insufficient evidence existed to support the Board’s decision.

In examining the record before the ABC proceeding, the trial court did so in view of the Board’s findings that the Coxes’ proposed outlet was remote and presented a law enforcement problem, their store would be located in an area of limited population and sufficient outlets (including the one the Board just granted Gleason) existed to serve the area, and the economic survival of the permit granted to Gleason would be brought into question if the board granted the Coxes’ application. These findings, the trial court stated, were negated by contrary findings made by the Board when granting Gleason’s permit.

At this point, we note the Board’s argument that part of the Gleason’s proceeding and the Board’s decision in that proceeding were erroneously made a part of the record by the trial court. The Gleason decision, however, was introduced without objection and, while the Board’s challenge of the Gleason transcript is for other reasons dubious as well, the trial court’s decision does not in any way appear to have been affected by the inclusion of the transcript. Instead, the trial court relied on the findings and conclusions set out in the Board’s Gleason order and the testimony taken in the Coxes’ proceeding before the Board.

In its review, the trial court found that the Coxes’ outlet was to be located in the same area of Gleason’s, and if Coxes’ store posed a law enforcement problem, Gleason’s outlet would as well. Nonetheless, in granting Gleason’s permit, the Board never mentioned any law enforcement problem. The trial court also set out testimony that, since 1984, appellee Kenneth M. Cox had operated a deli and beer outlet on Highway 67 without criminal incident or disturbance and that the sheriff and state police stopped and checked the store occasionally. Next, bearing on the Board’s finding existing permit holders, including Gleason, could not economically survive if the Coxes’ application was approved, the trial court pointed out the evidence showing just the opposite. The court in its order set out evidence presented showing that 1,600 people had signed petitions supporting Coxes’ application, that Highway 67 had a traffic count of over 2,000 cars per day and that the area would support two liquor outlets. The court also noted the significant absence of any evidence to support the Board’s finding that sufficient outlets existed to serve the area or its conclusion that competitors, like Gleason, could not economically survive.

In conclusion, we believe the trial court, in its review, took a critical, detailed and fair look at the Board’s findings and conclusions made in the Coxes’ and Gleason’s applications. As a result, it held correctly that the two Board decisions were inconsistent and the determinations reached in the Coxes’ case were not supported by the evidence and therefore arbitrary. Therefore, we uphold the trial court’s analysis and affirm its decision reversing the Board and remanding this case to the Board with directions to grant the Coxes’ application.


author: Tom Womack, Special Justice.

text:
    The CITY OF FAYETTEVILLE, Arkansas, and the Board of Trustees of the University of Arkansas v. Sue PHILLIPS, Assessor, and Washington County Board of Equalization
    90-311
    811 S.W.2d 308
    Supreme Court of Arkansas
    Opinion delivered June 17, 1991

      Ginger P. Crisp, Fred H. Harrison, Jeffrey A. Bell, and Jerry E. Rose, for appellants.

      George E. Butler, Jr., for appellees.
   Tom Womack, Special Justice.

This appeal results from a decision of the Washington County Circuit Court that the appellants, the City of Fayetteville and the Board of Trustees of the University of Arkansas, are not entitled to an exemption from ad valorem taxes during the construction of a jointly-owned arts center.

In 1988, the appellants acquired real property in Fayetteville on which they planned to construct the Walton Arts Center. By application to the Washington County Assessor, the City and University sought an exemption from property taxation under article 16, § 5(b), of the Constitution of Arkansas, contending that the site for the Center is public property being used exclusively for public purposes. The appellee county assessor denied the application for exemption on the basis that the property was not currently being used for an exempt purpose, the possibility existed that the Center, when completed, would be available for private functions, and the Center would compete with similar facilities in the area which were not being taxed.

The appellants then applied for relief to the appellee, Washington County Board of Equalization, and the request for exemption was again denied. An appeal was taken by the appellants to the Washington County Court, which ruled after a hearing that the property was exempt from ad valorem taxation. The appellees then appealed to the circuit court, which found that the property was not exempt, and the appellants now appeal from that decision. Additionally, the appellees have cross-appealed that part of the circuit court’s ruling holding that public property can, under some circumstances, be exempt from taxation during a period of construction. We affirm the decision of the trial court and deny the tax exemption to the appellants.

The facts are presented on stipulation of the parties and exhibits. The City and University entered into an Interlocal Cooperation Agreement in 1986 to finance, construct, and manage a center for the arts. Under the agreement, each contributed $4,500,000 for construction and an endowment to operate and maintain the facility. The primary source of the funds for the University’s contribution was a private donation from Sam and Helen Walton of Bentonville. The City’s contribution consisted of $ 1,000,000 from its general fund and $3,500,000 from a sales tax capital improvement bond issue backed by the City’s portion of county sales tax revenues. The bond issue was approved by Fayetteville voters in October 1986.

A city block was designated as the site for the Walton Arts Center. The property in the north half of the block was purchased in May of 1988 and is the subject of the present appeal. By January 1, 1989, existing buildings on the property had been vacated, and it had been determined that asbestos abatement would be necessary before demolition of the buildings could begin. Asbestos abatement began in January 1989 and was completed in March 1989. Construction of new buildings was delayed pending the outcome of a condemnation suit concerning the property in the south half of the block. Later in the year, that suit was resolved in favor of the City and University, both in chancery court and on appeal to the Arkansas Court of Appeals.

The Center was designed to consist of two buildings, one to contain two classrooms equipped for art education and offices to be used by area non-profit organizations and Center staff, and a second to contain some additional offices, an exhibition gallery for fine arts, crafts and other exhibitions, a main hall equipped for theatrical productions, and a smaller auditorium outfitted for other arts presentations. A primary consideration in the planning of the Center was the provision of performance space for use by all segments of the public. According to the Center’s executive director, any group or individual requesting use of the facility would be allowed to do so upon payment of a designated rental fee. The amount of rental fees were not determined initially, but were to be kept low in order to encourage maximum utilization of the Center. According to the record, no decision had been reached as to whether those groups and persons renting space would be required to open their events to the public, either on a paying or non-paying basis.

The plans called for operating funds to be derived from earnings on the endowment, rental rates, ticket sales, corporate and foundation grants, gifts and bequests, class registration fees, and state and federal grants. The programs to be offered by the Center would complement conferences and educational programs offered by the Continuing Education Center in Fayetteville, although they might attract the same segments of the general public who would otherwise attend arts programs at the Arts Center of the Ozarks, a private, non-profit arts center in the area whose property was not exempt from ad valorem taxation.

This case calls for an interpretation of the property tax exemption provision of our Constitution, article 16, § 5(b), which states:

The following property shall be exempt from taxation: public property used exclusively for public purposes', churches used as such; cemeteries used exclusively as such; school buildings and apparatus; libraries and grounds used exclusively for school purposes; and buildings and grounds and materials used exclusively for public charity.

(Emphasis supplied.)

In its letter opinion and Order, the circuit court, in reviewing the evidence submitted, made the following findings:

1. Property must be “actually and directly and exclusively” used for a public purpose to be entitled to an exemption from taxation.
2. The actual type of use to which property may ultimately be put is determinative as to questions involving entitlement to an exemption during construction. If the type of use contemplated by the entity seeking the exemption is exclusively public, as well as the actual character of the use to which the property can be put, the property will be entitled to tax-exempt status.
3. If a possibility exists that the property can or will be used for non-public purposes and that issue is raised by the taxing authority, the tax exemption will not be applied prospectively during construction of the facility.
4. Issues related to the use of the Walton Arts Center after construction are not ripe for a decision by the court.
5. The defendants have failed to meet the strict burden of proof imposed upon entities seeking an exemption from ad valorem taxation.

The appellants bring this appeal asserting two points for reversal: (1) The circuit court committed error in ruling that public property under construction for a public purpose shall be denied a tax exemption if there exists an issue as to whether the property may be used for a non-public purpose once completed; and (2) The court erred in finding the appellants had failed to meet their burden of proving that the Walton Arts Center was being used exclusively for public purposes on January 1,1989. On cross-appeal, the appellees urge error in the circuit court’s ruling that the property would have been exempted during the construction period had the appellants met their burden of proof.

As this Court has consistently held, taxation is the rule and exemption the exception. Exemptions from taxation must always be strictly construed, regardless of merit, in favor of taxation and against exemption. Hilger v. Harding College, 231 Ark. 686, 331 S.W.2d 851 (1960); Off-Street Parking Development Dist. No. 1 v. City of Fayetteville, 284 Ark. 453, 683 S.W. 2d 229 (1985). As stated in Brodie v. Fitzgerald, 57 Ark. 445, 22 S.W. 29 (1893):

[Exemptions, no matter how meritorious, a.re acts of grace, and must be strictly construed, and every reasonable intendment must be made that it was not the design to surrender the power of taxation or to exempt any property from its due proportion of the burden of taxation.

The prior cases underscore the limiting language of the constitutional provision and emphasize the heavy burden on those seeking an exemption. Most recently the Court concurred with this approach in Arkansas Conf. Ass’n of Seventh Day Adventists, Inc., v. Benton County Bd. of Equalization, 304 Ark. 95, 800 S.W.2d 426 (1990).

Article 16, § 5(b) requires that exempt property be public property and be used for public purposes. B.D.T. Inc. v. Moore, 260 Ark. 581, 543 S.W.2d 220 (1976). In this case there is no dispute as to the “public property” requirement. The ownership of the tract in question is held in a tenancy in common by two obviously public entities. The issue is whether the property was, at the time in question, “used exclusively for public purposes.” In City of Springdale v. Duncan, 240 Ark. 716, 401 S.W.2d 747 (1966), a city with sewage disposal problems acquired land for use at some undetermined time in the future as a buffer zone for sewage facilities, but had not actually used the lands in this manner, but instead leased them to an individual. A property tax exemption was denied because actual use for a public purpose is required, an expected, intended or contemplated future use not being sufficient to meet the constitutional requirement.

The cases of Hudgins v. Hot Springs, 168 Ark. 467, 270 S.W. 594 (1925), and Forsee v. Bd. of Directors of Bergman Special School Dist., 213 Ark. 569, 211 S.W.2d 432 (1948), cited by appellants, while both permitting exemptions, demonstrate that an existing or prior tax exempt use is required for exemption. In Hudgins, land was acquired and used for city landfill purposes, although the use was subsequently discontinued due to lack of road access. Finding that actual use for public purposes had occurred and that there had been no change in use, this court upheld an exemption. In Forsee, a public school case, an existing structure had been razed by the school district, which intended to make later use of the property by erecting another school building on the old foundation. The Court found that the actual use of the land for school purposes had not ceased, and that its exemption from taxation should continue. Under Hilger v. Harding College, supra, which contains a review of the “exclusive use” cases, the principles and rules for exemptions of property used for school purposes, for public purposes, and for charity were declared the same due to the similarity of language employed as to each category in article 16, § 5. Consequently, our decisions in the school cases cited, which turn on actual and direct use, readily apply to the present facts.

Appellants further rely on Wayland v. Snapp, 232 Ark. 57, 334 S.W.2d 633 (1960), as authority for the proposition that construction by a public entity of a facility to be used for a public purpose is an exclusive public use under the constitutional provision in issue. We do not concur with this contention because Wayland v. Snapp, supra, concerns an industrial development project facilitated by amendment 49 to the Constitution and Act 9 of the 1960 General Assembly. Both the amendment and the legislative act were intended to facilitate procurement of industry, and the amendment specifically describes such an activity as a public purpose. There is no comparable constitutional or statutory authority indicating that an arts center, prior to its actual operation, will constitute an exclusive public purpose activity.

For ad valorem tax purposes, January 1 of the year in question is the date of determination of property value and right to the exemption. Ark. Code Ann. § 26-26-1201 (1987). On the tax assessment date in the present case, January 1, 1989, the construction of an arts center was proposed, some work had begun in preparation for the removal of existing buildings from the site, but new construction had not commenced. While the record reflects an intent to use the land for the stated purposes, which were stipulated to be generally of a public nature, there had been no actual nor exclusive public use as mandated by the Constitution on the date in question. As correctly stated by the court below, issues of prospective use after construction were not ripe for decision by the court because, as will be shown infra, the evidence showed that the use of the Center after construction might not be exclusively public.

The burden of proving entitlement to the exemption rested with appellants, and we can find no error in the circuit court’s holding that they failed to sustain the burden. Evidence was required that the Center was being used exclusively for public purposes on January 1, 1989. Under the tax exemption statutes, the burden on the party claiming the exemption is to prove entitlement beyond a reasonable doubt. See Ragland v. Dumas, 292 Ark. 515, 732 S.W.2d 118 (1987). We cannot accept any lesser standard for a tax exemption case arising under the Constitution. The evidence before us, including the statement of the executive director of the Center, indicates that fees would be charged for use of the facilities, which may be rented by private individuals, and that, in some instances, events at the Center could be closed to the public at large. The stipulated facts indicate the Center may be used for non-public purposes. Such anticipated private use, regardless of any fee arrangements, could prevent property from being used exclusively for public purposes, which is the constitutional standard. Holiday Island Suburban Improvement Dist. §1 v. Williams, 295 Ark. 442, 749 S.W.2d 314 (1988).

In a prior case this Court affirmed the denial of a tax exemption to property of the City of Fayetteville which was leased to the University for its use and for use by the general public, because the facilities were being rented to private organizations for substantial amounts and in competition with local hotels. Off-Street Parking Development Dist. No. 1 v. City of Fayetteville, supra. Quoting language from Hilger v. Harding College, supra, that decision denied exemption where occasional use was for non-public purposes. In this case, in addition to the use by private groups, there is some evidence, as presented by the statement of the director of the Arts Center of the Ozarks located in Fayetteville, that the Walton Arts Center would be appealing to the same elements of the general public as that private organization, which does not have tax exempt facilities. Consequently, there was evidence before the circuit court which cast at least a reasonable doubt on the actual use of the Center when completed, causing the appellants to fail to sustain their burden of proof regarding the use requirement as of January 1, 1989.

In reference to the circuit court’s holding that a tax exemption for public property under construction may be summarily denied based on the taxing authority’s belief that the property might be used for a non-public purpose when completed, we disagree. The public entity seeking an exemption should be permitted appropriate opportunity to establish by proof its claim of exemption under the standard herein enunciated, otherwise all public property under construction might be subject to taxation based on some perceived chance of a non-public benefit or use. In none of the many cases decided under article 16, § 5(b), is there reference to a standard based on speculation of use by the taxing authority. While this was not reversible error, we must modify the circuit court’s decision in this respect, believing that each case should be judged on its own facts.

In conformity with our holdings on direct appeal, we affirm on the cross-appeal by appellees. If the public property in question had been used in the past for a public purpose, or the applicants for exemption had satisfactorily substantiated an intended exclusive public use, an exemption from taxation would be appropriate. Hudgins v. City of Hot Springs, supra; Yoes v. City of Fort Smith, 207 Ark. 694, 182 S.W.2d 683 (1944); and Forsee v. Bd. of Directors of Bergman Special School Dist., supra.

Affirmed as modified.

Special Justice Hamilton Singleton joins in this opinion.

Newbern and Brown, JJ., not participating.