author: David Newbern, Justice. Tom Glaze, Justice,

text:
    John M. MASON v. WAL-MART STORES, INC.
    96-1351
    969 S.W.2d 160
    Supreme Court of Arkansas
    Opinion delivered April 30, 1998
    [Petition for rehearing denied May 28, 1998.]

      Slaon, Rubens & Peeples, by: Kent J. Rubens; Glover & Glover, by: Mac Glover, and Timothy O. Dudley, for appelant.

      Williams & Anderson, by: Peter G. Kumpe, Leon Holmes, and Katherine R. Cloud, for appellees.

       Arnold, C.J., and Glaze, J., would grant. Corbin, J., not participating.

   David Newbern, Justice.

John M. Mason appeals from a summary judgment awarded to Wal-Mart Stores, Inc. (“WalMart”), on Mr. Mason’s claim for tortious interference with a contractual relationship and business expectancy. We affirm the judgment because the evidence presented by Mr. Mason did not demonstrate that Wal-Mart’s conduct was improper.

Mr. Mason worked as an independent sales representative for three vendors who sold products to Wal-Mart for resale. Century Products Company (“Century”), Okla Homer Smith Furniture Manufacturing Company (“Okla Homer”), and Pentech International, Inc. (“Pentech”), each had an account with Wal-Mart, and Mr. Mason, on a purely at-will basis, served as their sales representative to Wal-Mart.

For more than a decade, Wal-Mart exhibited discontent with dealing with independent manufacturers’ representatives like Mr. Mason. On November 6, 1991, David Glass, Wal-Mart president and CEO, issued a letter to some, if not all, of its vendors expressing Wal-Mart’s preference for dealing directly with “principals” of the vendors.

The letter, which was reported in a major article in The Wall Street Journal, mentioned the rapid growth of Wal-Mart and the desirability on the part of Wal-Mart and its suppliers to be able to forecast each other’s needs and to react quickly. It mentioned new computer systems by which Wal-Mart shared information with its vendors, and it referred to the extra reaction time created by dealing through a third party in addition to the “high risk of misunderstandings” inherent in the system using independent representatives.

The letter defined a “principal” as “an employee of your company empowered to make decisions and act in your behalf.” Excluded were individuals claiming “to be a ‘principal’ of one or more other companies.” The letter concluded by stating that the vendor would be “contacted” later to learn whether it agreed to accept Wal-Mart’s “decision that it is in the best interest of our company and our customers to deal directly with the principals of your company.”

Shortly after Wal-Mart issued that letter, Century, Okla Homer Smith, and Pentech removed Mr. Mason from their WalMart accounts, and Century and Pentech hired new persons to handle the Wal-Mart account “in house.” Mr. Smith at Okla Homer dealt with Wal-Mart himself, as he said he had always done, even while Mr. Mason was working for him. Mr. Mason was not terminated by Century; rather, he was kept on there, but he dealt with other accounts. He was terminated by Pentech because his only role there had been to assist on the Wal-Mart account. Mr. Mason ultimately ceased working for all three vendors.

Mr. Mason sued Wal-Mart, alleging that he had a contract with Century and Okla Homer to act as their representative to Wal-Mart. Those contracts, he alleged, were in effect from July 1967 through the early part of 1992. He also alleged that he had a contract with Pentech from August 1980 to December 1991. Mr. Mason alleged that he was paid a commission by those vendors on the sales of their products to Wal-Mart and that, in light of his highly regarded performance, his contractual relationships could reasonably have been expected to continue.

The interference with his contractual relationships and business expectancies was described as Wal-Mart’s use of its economic power to coerce Mr. Mason’s employers to terminate his contracts with them. The complaint referred to Mr. Glass’s letter and mentioned an incident that allegedly occurred in 1982 when a WalMart employee asked Century to terminate its relationship with Mr. Mason and pass on to Wal-Mart any savings thus achieved.

In its motion for summary judgment, Wal-Mart asserted that “the undisputed facts demonstrate that Wal-Mart did not improperly interfere with Mason’s contractual relationships and did not induce Century, Okla Homer Smith or Pentech to breach any contract with Mason. Moreover, Wal-Mart’s conduct was privileged.”

The Trial Court granted Wal-Mart’s motion, holding that Mr. Mason “cannot present proof of improper interference as required in an intentional interference with a contractual relationship claim” and that, “when a party cannot present proof on an essential element of its claim, there is no remaining genuine issue of material fact thereby entitling the party moving for summary judgment to a judgment as a matter of law.” The Trial Court said that an interference in a contractual relationship must be “improper” in order to be “actionable.”

The Trial Court relied on factors listed in the Restatement (Second) of Torts § 767, and on Conoco Inc. v. Inman Oil Co., Inc., 774 F.2d 895 (8th Cir. 1985), an opinion discussing § 767, to determine whether Wal-Mart’s actions could be viewed as “improper interference.” The Trial Court conceded that “economic pressure can constitute improper conduct,” but it said that Wal-Mart’s conduct did “not amount to improper, actionable conduct under the elements required for an intentional interference with a contractual relationship claim.” The Trial Court said that “competitive conduct which is neither illegal nor independently actionable does not become actionable because it interferes with another’s contractual relations,” citing Amerinet, Inc. v. Xerox Corp., 972 F.2d 1483, 1507 (8th Cir. 1992).

The Trial Court addressed the alleged 1982 incident, saying that, even if testimony about that conversation could be admitted at trial, it was “insufficient to establish a prima facie case of improper conduct on the part of Wal-Mart.” Thus, the Trial Court concluded that Mr. Mason could not “establish a prima facie case of intentional interference with a contractual relationship claim against Wal-Mart.” Wal-Mart’s privilege claim was not addressed.

Mr. Mason argues first that the Trial Court “improperly imposed an element of proof on Mason which the law does not require” — namely, the requirement to prove that the alleged interference by the defendant was “improper” or “wrongful.” Secondly, he contends that, even if impropriety or wrongfulness is an element of his claim, summary judgment was inappropriate because he adduced sufficient evidence of improper or wrongful conduct on Wal-Mart’s part to create a genuine issue of material fact. Ark. R. Civ. P. 56(c).

1. The “impropriety” requirement

To understand our conclusion that it is necessary for the plaintiff in an interference-with-contract claim to demonstrate that the conduct of the defendant was at least improper, it is helpful to consider the tort’s modern history in the law of this State. It begins with Mason v. Funderburk, 247 Ark. 521, 446 S.W.2d 543 (1969), in which a sales manager for a company selling books to schools alleged that members and administrators of a school board wrongfully caused him to lose his job by defaming him. Obviously, the defamatory conduct alleged was tortious in itself. We reversed a summary judgment that had been awarded against some of the defendants. In the course of the opinion, we referred to the misconduct alleged as malicious, wilful, without legal justification, without privilege, and tortious. Thus, we clearly contemplated that a plaintiff alleging interference with a contract establish that the defendant did something wrongful or improper. In Elliott v. Elliott, 252 Ark. 966, 482 S.W.2d 123 (1972), we affirmed a directed verdict with respect to a claim of interference with a land-sale contract, citing the Mason case and pointing out that the interference was required to be with malice.

In Stebbins & Roberts, Inc. v. Halsey, 265 Ark. 903, 582 S.W.2d 266 (1979), we adopted a new approach. Mr. Halsey had been a paint salesman for Stebbins & Roberts, Inc. (“Stebbins”). He took a similar position with PPG Company. It was alleged that, despite a covenant in his contract with Stebbins not to compete for one year, he began calling on his former Stebbins customers. A Stebbins employee called PPG, informed it of the anti-competition agreement, and announced he planned to sue Mr. Halsey, make an example of him, and “name” PPG in the process. Mr. Halsey was fired by PPG, so he sued Stebbins for interference with his contract. In holding that Stebbins was not entitled to a directed verdict, we adopted the view expressed in Prosser on Torts (4th ed. 1971), that, once Mr. Halsey had shown a “wrongful” interference with his contract, Stebbins would be required to show that its conduct was “privileged,” thus shifting to the defendant the burden of going forward with the evidence.

In the case of Walt Bennett Ford, Inc. v. Pulaski Co. Spec. Sch. Dist., 274 Ark. 208, 624 S.W.2d 426 (1981), Walt Bennett Ford (“Bennett”) and the Jim Nabors Company (“Nabors”) each bid on school buses to be purchased by the school district. Nabors prevailed, and Bennett sued members of the school board, claiming they had “maliciously and willfully interfered” with its business expectancy. We held that, by awarding the contract to the low bidder, Nabors, the school board members had protected the tax payers’ interest and had not acted in bad faith. In a supplemental opinion denying rehearing, we wrote:

The general rule is that an improper motive or bad faith is no longer an essential part of the plaintiff s case in the tort of interference with existing contractual relations. However, the defendant may show that his interference was privileged. Stebbins & Roberts, Inc. v. Halsey, 265 Ark. 903, 582 S.W.2d 266 (1979).... Our rule announced in Stebbins, supra, that bad faith is no longer an essential part of the plaintiff s case in the tort of interference with contractual relations is in no manner modified or varied by our original opinion.

Id. at 214A-214B, 624 S.W.2d at 429-30.

Our opinions in the Walt Bennett Ford case are cited in connection with a discussion in Prosser and Keeton on Torts § 129, at pp. 983-84 and n. 61 and 62 (5th ed. 1984). Unlike the 1971 version of the Prosser text, the later edition states:

It has always been agreed that a defendant might intentionally interfere with the plaintiff s interests without liability if there were good grounds for the interference, or in other words that some kind of unacceptable purpose was required in addition to the intent. Different formulas to express this idea have been in use at different stages in the development of the tort, the first of which was to say that there was liability for intentional interference that was “malicious.” It has long been clear, however, that “malice” in the sense of ill-will or spite is not required for liability. In recognition of this, courts and writers adopted a second formula under which liability was imposed for any intentional interference that resulted in harm. Under this formula, the plaintiff made out a prima facie case upon proof of intended interference plus damages, and it was left to the defendant to shoulder if he could the burden of proving he was justified in his actions, for example, by showing that he acted to protect legitimate and prior property or contract interests of his own. This formula subjected the defendant to liability without first describing to him what was forbidden and what was permitted, and it added to this injury by putting the burden upon him to justify his conduct without specifying in any precise way what would amount to such a justification. The Restatement Second of Torts has adopted a third formula, which may meet a part of this objection. Under this, the defendant is subject to liability for a knowing or purposeful interference with contract only if the defendant’s action was “improper, ’’ either as to means or purpose. This formula might be read, as some of the cases imply, to put the burden on the plaintiff in the first instance to show impropriety, and it is no doubt an improvement when so read. But the Second Restatement refused to take a clear position on the point and other cases have left the burden upon the defendant to justify his conduct.

Id. at pp. 983-84 (emphasis supplied.)

Although our discussion in the Walt Bennett Ford opinion did not mention the Restatement’s position, Prosser cites the case in connection with his assertion that “other cases have left the burden upon the defendant to justify his conduct.” Prosser, supra, p. 984 n.62. In describing the case, he points out that this Court “first held for defendants on the ground that there was no bad faith, then on supplemental opinion, reaffirmed its earlier rule that bad faith was no part of the plaintiffs case.”

Some of our later cases have mentioned that “bad faith” is not a requirement, see, e.g., L.L. Cole & Son Inc. v. Hickman, 282 Ark. 6, 8-9, 665 S.W.2d 278, 280 (1984), and have stated the elements as we did in the Walt Bennett Ford case as follows:

(1) [T]he existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy on the part of the interferor; (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy; and (4) resultant damage to the party whose relationship or expectancy has been disrupted.

274 Ark. at 214, 624 S.W.2d at 429. These elements are consistent with the ones found in Arkansas Model Jury Instructions, Civil, § 406 (Supp. 1995), in Chapter 4, entitled “Willful and Wanton Conduct, Outrage, and Deceit.”

In Kinco, Inc. v. Schueck Steel, Inc., 283 Ark. 72, 671 S.W.2d 178 (1984), however, we seemed to require a showing of improper conduct beyond the earlier-stated elements that now appear in AMI 406. Schueck Steel, Inc. (“Schueck”) was to furnish Walcon brand metal wall panels in the construction of a public school building for a set price, including a set profit, negotiated with the architects. Pdchardson Construction Co. was awarded the contract to erect the walls, and it subcontracted the work with Kinco, Inc. (“Kinco”). Kinco, without informing Schueck, became a distributor for another brand of wall panels, thus becoming Shueck’s competitor, and used its knowledge of Shueck’s prices to underbid Shueck. Schueck prevailed at trial, and Kinco contended on appeal that it should have had a directed verdict. We held that Shueck’s evidence was sufficient to support the judgment. We recited the elements of the tort of interference with a business expectancy substantially as above, but in our discussion of whether the evidence was sufficient we did not limit ourselves to those elements, or even discuss them, but dwelt solely .upon the evidence of Kinco’s misconduct. We then moved on to the second point, which was Kinco’s apparent contention that, even if the elements were proven, it was entitled to a directed verdict as its action was privileged because, as with the school directors in the Walt Bennett Ford case, Kinco was trying to protect the public interest. We rejected that argument, but we did so not on the basis of evaluating the asserted privilege; rather, we again discussed Kinco’s misconduct, by enriching itself by “devious and improper means.” 238 Ark. at 77, 671 S.W.2d at 1811.

In United-Bilt Homes v. Sampson, 310 Ark. 47, 51, 832 S.W.2d 502, 503 (1992), we seemingly reverted to defining the tort as imposing liability upon one “who intentionally and with malice interferes with the contractual relations with another.” In addition, however, to citing the 1971 edition of Prosser on Torts, we also cited the 1984 edition of Prosser and Keeton on Torts and mentioned the possibility of “justification” for the alleged tortfeasor’s action. See also Cross v. Arkansas Livestock & Poultry Comm’n, 328 Ark. 255, 262, 943 S.W.2d 230, 234 (1997) (citing the United-Bilt Homes case for the statement the actor must act with “malice”).

In Fisher v. Jones, 311 Ark. 450, 844 S.W.2d 954 (1993), the facts were that J.D. Fisher sold his Mercedes-Benz franchise to Kelly Hill and others. Mr. Hill contracted to sell the franchise to Gerald Jones. Mr. Hill’s group owed Mercedes-Benz Credit Corp. (“MBCC”) $600,000. MBCC seized the inventory of the dealership. Mr. Fisher claimed that MBCC had thus interfered in his right of first refusal to repurchase the franchise from Mr. Hill. In holding that a summary judgment in favor of MBCC was appropriate, we noted that Mr. Fisher had no contract giving him a right to repurchase the franchise and that MBCC had a right to protect its interest in the inventory. We stated:

For an interference to be actionable, it must be improper. Walt Bennett Ford v. Pulaski County Special Sch. Dist. . . . (supplemental opinion on denial of rehearing). The Restatement (Second) of Torts sets out the factors in determining when interference is improper as follows:
Factors in Determining Whether Interference is Improper.
In determining whether an actor’s conduct in intentionally interfering with a contract or a prospective contractual relation of another is improper or not, consideration is given to the following factors:
(a) the nature of the actor’s conduct;
(b) the actor’s motive;
(c) the interests of the other with which the actor’s conduct interferes;
(d) the interests sought to be advanced by the actor;
(e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other;
(f) the proximity or remoteness of the actor’s conduct to the interference; and
(g) the relations between the parties.

311 Ark. at 458-59, 844 S.W.2d at 959.

The reference to the supplemental opinion in the Walt Bennett Ford case is puzzling because it was in that opinion that we declared that “the general rule is that an improper motive or bad faith is no longer an essential part of the plaintiff s case in the tort of interference with existing contractual relations.” Our holding there seemed to be that the conduct of the school board members was not actionable because it was privileged because it was done in good faith.

In Hunt v. Riley, 322 Ark. 453, 909 S.W.2d 329 (1995), we affirmed the dismissal of a complaint for failure to state facts upon which relief could be granted. Ark. R. Civ. P. 12(b)(6). As a deficiency in the complaint, we recited, “Nor does the complaint allege . . . that the defendants’ actions were in any way improper.” 322 Ark. at 459, 909 S.W.2d at 332.

If anything is clear from this recitation of our cases, it is that, in the Stebbins & Roberts case we adopted the 1971 Prosser procedure, later memorialized in AMI 406, in which a plaintiff who had shown certain elements could establish a claim for interference with a contract or business expectancy and that it then became incumbent upon the defendant to show that the interference was somehow privileged, without knowing what might constitute such a privilege. That is the procedure that Professor Dan B. Dobbs referred to as a “sorry state of affairs” in Dan B. Dobbs, Tortious Interference with Contractual Relationships, 34 Ark. L. Rev. 335, 345 (1980).

Just as our cases seem to have reverted to requiring an allegation, or, at the summary-judgment stage, a showing of “improper” conduct on the part of the defendant, the Restatement (Second) of Torts, § 766, now provides:

One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract. [Emphasis supplied.]

Professor Dobbs considers this reversion to placing the burden on the plaintiff as an improvement, but he remains critical of the Restatement (Second) rule because of the indefiniteness of the term “improper.” While we understand the sentiment that the tort should be reduced to situations in which a third party may be held liable for interference only when the alleged conduct is independently tortious as it was in Mason v. Funderburk, supra, we are unwilling to go that far. Cf. Conoco, Inc. v. Inman Oil Col, Inc., 774 F.2d 895, 907 (8th Cir. 1985) (“We think that ‘wrongfbl means’ in this context refers to means which are intrinsically wrongful — that is, conduct which is itself capable of forming the basis for liability of the actor.”) Our review of our cases leads us to the position that, as Restatement § 766, our law requires that the conduct of the defendant be at least “improper,” and we look to factors such as those stated in § 767 to determine whether the defendant’s conduct fits that description.

2. Wal-Mart’s conduct

Mr. Mason’s argument does not end with the suggestion that the Trial Court erred in including the requirement that Wal-Mart be shown to have interfered improperly in his contracts or business expectancies. He argues that, even if that is a requirement, the evidence he presented shows that Wal-Mart’s conduct was indeed improper. The only suggestion of impropriety, however, is that Wal-Mart’s intention was to increase its profits by eliminating manufacturer’s representatives from its purchasing process. When questioned about whether the economic ends sought to be furthered by Wal-Mart were improper, Mr. Mason’s counsel referred to Comment c of the Restatement (Second) of Torts following § 767. It reads as follows:

Economic pressure. Economic pressure of various types is a common means of inducing persons not to deal with another, as when A refuses to deal with B if B enters into or continues a relation with C, or when A increases his prices to B or induces D not to deal with B on the same condition. Or the pressure may consist of the refusal to admit B to membership into a trade association or a professional organization, as a medical or legal association. The question whether this pressure is proper is answered in the light of the circumstances in which it is exerted, the object sought to be accomplished by the actor, the degree of coercion involved, the extent of the harm that it threatens, the effect upon the neutral parties drawn into the situation, the effects upon competition, and the general reasonableness and appropriateness of this pressure as a means of accomplishing the actor’s objective.

Although Mr. Mason uses the term “greed” to describe Wal-Mart’s objective, the term “profit motive” could have been substituted. To hold that the evidence presented in this case requires that a jury evaluate Wal-Mart’s conduct in accordance with the explanation contained in comment c to § 767 would require it in any instance when a business threatens not to buy in order to get a better price. In short, we see nothing in the evidence presented by Mr. Mason that we could consider to be indicative of improper conduct on the part of Wal-Mart.

Affirmed.

Corbin, J., did not participate in the decision of this case.

Special Justice Lynn Williams joins in this opinion.

Arnold, C.J., and Glaze, J., dissent.

DISSENTING OPINION TO COURT’S DENIAL OF REHEARING

Opinion Delivered May 28, 1998

Tom Glaze, Justice,

dissenting. As a caveat to the bench and bar, I point out that today’s decision changes this court’s AMI Civ. 3d Instructions 406 and 407. I think unnecessarily so; thus, I dissent.

The mischief triggering this court’s decision to overrule longstanding precedent is primarily due to our opinion in Fisher v. Jones, 311 Ark. 450, 844 S.W.2d 954 (1993), which misstates this court’s holding in Walt Bennett Ford v. Pul. Co. Spl. Sch. Dist., 274 Ark. 208, 214-A, 624 S.W.2d 426, 429 (1981) (Supplemental Opinion on Denial of Rehearing). In chronological order, those two holdings are as follows:

“The general rule is that an improper motive or bad faith is no longer an essential part of the plaintiff’s case in the tort of interference with existing contractual relations. However, the defendant may show his interference was privileged. Stebbins & Roberts, Inc. v. Halsey, 265 Ark. 903, 582 S.W.2d 266 (1979). 274 Ark. at 214-A, 624 S.W.2d at 419 (1981). (Emphasis added.)
* * *
For an interference [with a contract relation] to be actionable, it must be improper. 311 Ark. at 458, 844 S.W.2d at 959 (1993). (Emphasis added.)

Obviously, the above two holdings are at odds. To confuse matters further, the court’s opinion in Fisher not only misstated the rule firmly announced in Walt Bennett Ford, but also it listed factors from the Restatement (Second) of Torts needed to determine whether an interference is “improper.” Only making the situation worse, we later decided Hunt v. Riley, 322 Ark. 453, 909 S.W.2d 329 (1995), and citing both Fisher and Walt Bennett Ford, the Hunt court set out the four elements of a tortious interference claim, but added that, “for an interference to be actionable, it must be improper.” This court in Fisher and Hunt never mentioned any intent to depart from its holding in Walt Bennett Ford or other cases that routinely followed the established rule in Walt Bennett Ford which held a plaintiff need not show a defendant’s interference was improper.

In 1995, our Civil Instructions Committee met and adopted AMI Civ. 3d 406, which requires that the plaintiff must prove the following five elements to prove interference with contractual relationship or business expectancy:

(1) plaintiff sustained damages;

(2) plaintiff had a valid contractual relationship (and/or business expectancy);

(3) defendant had knowledge of the contractual relationship and/or business expectancy;

(4) defendant by intentional interference induced or caused a disruption or termination of the relationship and/or expectancy; and

(5) the disruption or termination was a proximate cause of the plaintiff’s damages.

The foregoing instruction on (and definition of) tortious interference with contractual relationship was based upon a host of Arkansas cases where this court required the elements listed above, but made no mention of any “improper motive” requirement. As the reader will note, a number of these cases were decided even after the 1993 Fisher and 1995 Hunt decisions were rendered. See Brown v. Tucker, 330 Ark. 435, 954 S.W.2d 262 (1997); Cross v. Arkansas Livestock & Poultry Comm’n, 328 Ark. 255, 943 S.W.2d 230 (1997); Belin v. West, 315 Ark. 611, 864 S.W.2d 838 (1993); Nicholson v. Simmons First Nat’l Corp., 312 Ark. 291, 849 S.W.2d 483 (1993) (Holt, C.J., Newbern and Brown, JJ., dissenting opinion); W. E. Long Co. v. Holsum Baking Co., 307 Ark. 345, 820 S.W.2d 440 (1991); Mid-South Beverages, Inc. v. Forrest City Grocery Co., Inc., 300 Ark. 204, 778 S.W.2d 218 (1989); Conway Corp. v. Construction Eng’rs, Inc., 300 Ark. 225, 782 S.W.2d 36 (1989) (Substituted Opinion on Denial of Rehearing); Jim Orr & Associ ates v. Waters, 299 Ark. 526, 773 S.W.2d 99 (1989); L. L. Cole & Son, Inc. v. Hickman, 282 Ark. 6, 665 S.W.2d 278 (1984).

In the 1984 L. L. Cole & Son, Inc. v. Hickman decision, this court said that the law has long been in general agreement that a third party who intentionally, and with malice, interferes with the contractual relations of another incurs liability for his action in tort. 282 Ark. at 9, 665 S.W.2d at 280 (1984). The court further explained this tort as follows:

Such a tort is commonly termed “interference with contractual relations” or “tortious interference with contract,” and has long been recognized in Arkansas. Mason v. Funderburk, 247 Ark. 521, 446 S.W.2d 543 (1969). For a full discussion see Dobbs, Dan B., “Tortious Interference with Contractual Relationships,” 34 Ark. L. Rev. 334. The elements of the tort of interference with contractual rights are thoroughly set out in Walt Bennett Ford v. Pul. Co. Spl. Sch. Dist., 274 Ark. 208, 624 S.W.2d 426. See also Restatement, (Second) of Torts § 766 (1979). Malice, or bad faith, is no longer in Arkansas an essential part of the plaintiff’s case. See Walt Bennett Ford, Supplemental Opinion on Petition for Rehearing, supra, and Stebbins & Roberts, Inc. v. Halsey, 265 Ark. 903, 582 S.W.2d 266 (1979). Punitive damages for the tort of interference with contractual relations may be awarded. Id. (Emphasis added.)

Later, in 1989, the court, citing to the Walt Bennett Ford Supplemental Opinion, again restated its rule that bad faith need not be proven by the plaintiff in order to recover for tortious interference with a contractual or business expectancy. Conway Corp., 300 Ark. 225, 233, 782 S.W.2d 36, 40 (1989). (Emphasis added.) Instead, the court added, “[T]he defendant may show his interference was privileged . . . meaning ”a defendant will not be liable if he acts, without bad faith, to protect the public interest or a third person to whom he stands in a relation of responsibility." Id. The court in Conway Corp. held that the defendants were entitled to such a privilege and concluded they had acted without bad faith. The Conway Corp. court adhered to the definition of bad faith as consisting of dishonest, malicious, or oppressive conduct with a state of mind characterized by hatred, ill will, or a spirit of revenge. Id.

Confronted with the above case authority, our Civil Instructions Committee in 1995 quite accurately concluded AMI 3d 406, after listing the five recognized elements of the tortious interference of contract cause of action, by setting out the following affirmative defense:

As a defense to the claims of the plaintiff, the defendant contends his conduct was privileged in that he acted without bad faith. Defendant has the burden of proving this defense.

In sum, the AMI Civ. 3d 406 and 407 pattern instructions correctly reflect the above case authority defining tortious interference of a contractual relationship — only the misstatements of law wrongly attributed to Walt Bennett Ford by Fisher and Hunt fail to fit. Accordingly, I opt to follow the law as set out in instructions 406 and 407, and in doing so, I would reverse the trial court’s decision.

I recognize that, based on the facts and evidence before us, Wal-Mart likely would prevail on the bad-faith defense issue. However, that is not the issue now before this court. Too, I would add that, while it might arguably be reasonable to place the burden on the plaintiff to show the defendant acted in “bad faith” in these type claims, that is not what the majority opinion requires. Rather, the majority, citing Fisher and Hunt, provides that, for an interference to be actionable, it must be “improper”— whatever that term means. Although Fisher sets out factors from § 767 of the Restatement (Second) of Torts that may be used to determine the meaning of “improper interference,” I suggest those factors are meaningless and offer no real guidance or measure. See Fisher, 311 Ark. at 458-59, 844 S.W.2d at 959 (1993). To answer the questions posed by those factors offers no definitive character to the term “improper motive or means” and would leave the trial court and jury at a loss as to when improper interference by a defendant has occurred. To the contrary, the term “bad faith” in AMI Civ.3d 407 is clearly defined to mean “dishonest, malicious, or oppressive conduct carried out with a state of mind characterized by hatred, ill will, or a spirit of revenge,” and is consistent with the “malicious interference” terminology used in this court’s cases of Halsey, Hickman, Sampson, and Cross, supra. At the very least, if the majority is to change Arkansas’s existing law on this subject, it should take this opportunity to utilize terminology that has a definitive meaning and require plaintiff to show the defendant acted and interfered with bad faith.

Because I adhere to the heretofore long-settled Arkansas rule that placed the burden on the defendant to show his interference was justified, I would grant the appellant’s petition for rehearing and reverse and remand this case.

In conclusion, I note that the majority opinion relies heavily on Professor Dobbs’s suggestion that the tort of interference claim would be best served by placing the burden on the plaintiff to prove the defendant improperly interfered with the plaintiff’s contractual relationship. See Dobbs, Dan B., Tortious Interference with Contractual Relationships, 34 Ark. L. Rev. 334 (1984), citing Restatement (Second) Torts, § 766 (1979). That suggestion, however, was rejected by this court in L. L. Cole & Son, Inc., 282 Ark. 6, 665 S.W.2d 278 (1984). As already fully discussed, except for the aberrant holdings in the Fisher and Hunt cases that clearly misstate Arkansas law, our case law and AMI Civ. 3d Instructions very plainly provide that the plaintiff has no burden to show “improper” motive (or means) when posing interference, and instead requires the defendant to show his interference was justified.

Arnold, C.J., joins this dissent.

       This dissenting opinion was prepared to be handed down on April 30, 1998, when the majority court’s decision was rendered with Chief Justice W. H. “Dub” Arnold and me dissenting. For some reason, the dissent was not filed, so it is now handed down in response to appellant’s petition for rehearing.

       Cases often refer to four elements, combining (1) and (5) relating to damages, e.g., Hunt v. Riley, supra.

       The instruction concludes with “If you find from the evidence in this case that plaintiff has proven each of the five essential propositions and that defendant has failed to prove the defense of privilege, then your verdict should be for the plaintiff. . but if, on the other hand, you find from the evidence that any of the five propositions has not been proved by plaintiff (or that defendant has proved the defense of privilege), then your verdict shall be for the defendant.

       Those factors are listed as follows:
      (a) the nature of the actor’s conduct;
      (b) the actor’s motive;
      (c) the interests of the other with which the actor’s conduct interferes;
      (d) the interests sought to be advanced by the actor;
      (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other;
      (f) the proximity or remoteness of the actor’s conduct to the interference; and
      (g) the relations between the parties.


source: Caselaw Access Project

author: Tom Glaze, Justice.

license: Public Domain

text:
    Tony TORTORICH v. Pam TORTORICH
    97-884
    968 S.W.2d 53
    Supreme Court of Arkansas
    Opinion delivered April 30, 1998

      Hilburn, Calhoon, Harper, Pruniski & Calhoon, Ltd., by: Phil Campbell and Dorcy Kyle Corbin, for appellant.

      Linda D. Shepherd, P.A., by: Linda D. Shepherd and Allison R. Wooten, for appellee.
   Tom Glaze, Justice.

This case is the third appeal involving Tony and Pam Tortorich. Tortorich v. Tortorich, 324 Ark. 128, 919 S.W.2d 213 (1996) (Tortorich II); Tortorich v. Tortorich, 50 Ark. App. 114, 902 S.W.2d 247 (1995) (Tortorich I). In Tortorich I, the Pulaski County Chancery Court, on December 15, 1993, denied Tony’s counterclaim for absolute divorce, granted Pam a divorce from bed and board, and, among other things, ordered Tony to pay $6,000.00 per month child support, $1,000.00 per month alimony, and to maintain Pam on his health and hospitalization insurance. Pam was also awarded a marital interest in Tony’s professional association. Tony appealed the chancellor’s decree.

While Tony’s appeal was pending in the court of appeals, he moved to Saline County, and, in March of 1994, filed suit against Pam, requesting an absolute divorce based on eighteen-months separation. Pam retaliated a few days later by suing Tony for an absolute divorce in Pulaski County. Both parties moved to dismiss each other’s divorce suit, but the Pulaski and Saline County chancellors denied the motions. The Pulaski County chancellor, however, held Pam’s case in abeyance, while the Saline County chancellor permitted Tony to proceed with his case; Pam continued her objection to the Saline County court’s venue. On November 17, 1994, the Saline County chancellor entered his decree, which conflicted with the Pulaski County chancellor’s earlier order of December 15, 1993. The Saline County chancellor granted Tony a divorce, denied Pam any alimony and health insurance, and awarded Pam child support in the monthly sum of $5,663.00. At this stage of litigation, Tony chose to follow the Saline County chancellor’s decree, instead of the Pulaski County chancellor’s order. In doing so, he terminated his alimony and health insurance premium payments, and reduced his child support to the $5,663.00 monthly amount. Pam appealed the Saline County chancellor’s November 17, 1994 decision to this court, and continued her objection and argument that the chancellor was acting outside his venue.

Next, Tony’s appeal from the Pulaski County chancellor’s December 15, 1993 order was decided by the court of appeals on June 28, 1995. In that decision, Tortorich I, the court of appeals affirmed the Pulaski County chancellor’s award of child support, but found the chancellor had erred in evaluating Tony’s business. The court decided that, because the Pulaski County chancellor had made an error in giving Pam a substantial award in Tony’s business, the chancellor should, on remand, reconsider an appropriate amount of alimony to be awarded to Pam. On remand, the Pulaski County chancellor held a hearing on October 10, 1995, and later entered an order on February 2, 1996, finding Pam was entitled to increased monthly alimony payments of $2,000, commencing from December 15, 1993, through July 31, 1994. The chancellor’s decree adopted as further orders, other findings included in two earlier letter opinions.

After the Tortorich I decision and the Pulaski County chancellor’s remand order increasing Tony’s alimony, our court decided Pam’s appeal which challenged the Saline County chancellor’s venue. In our opinion issued June 3, 1996, we held that Pulaski County was the parties’ proper venue, and that the Saline County chancellor had erred in refusing to dismiss Tony’s divorce action. Accordingly, we reversed and dismissed the Saline County case.

Finally, because Tony had stopped his monthly alimony and health insurance premium payments and had failed to pay in full his monthly $6,000.00 child support payments in accordance with the Pulaski County chancellor’s December 15, 1993 order, Pam filed a motion for Tony to show cause why he should not be held in contempt. After a hearing on Pam’s motion, the Pulaski County chancellor entered an order on February 28, 1997, in which she declined to find Tony in willful contempt, but did find he was subject to the chancellor’s judgment, and found Tony owed the following arrears:

(1) Alimony in the amount of $2,000.00 for twenty-five months, beginning August 1, 1994, and ending August 1, 1996;

(2) Health insurance premium payments in the total amount of $1,884.44 for the periods between May 1, 1994, through April 1, 1995, and May 1, 1995, through August 1996; and

(3) Child support in the amount of $7,181.97, plus interest, for the period between August 1, 1994, and May 1, 1996.

Tony now appeals the Pulaski County chancellor’s February 28, 1997 order, and first contends that, because the chancellor’s February 7, 1996 remand order only awarded increased monthly alimony payments for the months between December 15, 1993, and July 31, 1994, without specifying that Tony was to continue paying alimony at the increased amount, the chancellor erred when holding he owed alimony arrearages between the months of August 1, 1994, and August 1, 1996. Tony had made his increased alimony payments through July 31, 1994, which, he says, brought him into compliance with the Pulaski County chancellor’s orders. We disagree.

Tony bases his argument on language in the Pulaski County chancellor’s remand order that provides Pam is entided to total monthly alimony payments of $2,000.00 from December 15, 1993, through July 31, 1994; but he wholly ignores that order’s directive whereby the chancellor incorporated her earlier opinion letters as a part of the court’s findings and designated them as “further orders of the court.” One of the chancellor’s letter opinions dated October 23, 1995, related evidence justifying why alimony should be awarded to Pam and stated that Pam “is entitled to alimony based upon [Tony’s] continued practice of oral surgery until her death or remarriage, or until she has established an earning capacity.” Quite clearly, the Pulaski County chancellor ordered Tony to pay monthly alimony payments of $2,000.00 that continued past July 31, 1994, and until Pam’s death or remarriage or until she established an earning capacity. Thus, the arrears in alimony, insurance premiums, and child support found by the chancellor for the months commencing on August 1, 1994, were in accordance with her orders.

In his second point for reversal, Tony contends that, even if the Pulaski County chancellor’s order directed him to pay alimony, insurance premium payments, and $6,000.00 monthly child support after July 31, 1994, he claims that the order was ineffectual from the time the Saline County chancellor’s absolute divorce decree was entered on November 17, 1994, until the Saline County order was reversed by our court on June 3, 1996. Tony cites the cases of Smith v. Smith, 236 Ark. 141, 365 S.W.2d 247 (1963), and Myers v. Myers, 226 Ark. 632, 294 S.W.2d 67 (1956), for the proposition that a decree of absolute divorce supersedes a limited decree, and argues that, because Pam never obtained a stay of the Saline County chancellor’s absolute divorce decree during her appeal of it, the Saline County decree governed the parties’ conduct and obligations until the decree was reversed. Again, we disagree.

While the Smith and Myers cases, like the case here, involved parties who had filed different but related marital actions in separate chancery courts, the marital couples in those two earlier cases entered their appearances in the respective actions and venue was not an issue. In short, Smith and Myers simply are not helpful to the instant case, where Pam unwaveringly adhered to her objection questioning the Saline County Chancery Court’s venue. This court understands that venue is a procedural matter, not a subject-matter jurisdiction one, and this distinction is made clear in our holdings that, absent an objection, a trial court has the power to render a binding judgment even though venue was not proper. Prairie Implement Co. v. Circuit Court of Prairie County, 311 Ark. 200, 844 S.W.2d 299 (1992) (Emphasis added.); Mark Twain Life Ins. Corp. v. Cory, 283 Ark. 55, 670 S.W.2d 809 (1984); see also Hargis v. Hargis, 292 Ark. 487, 731 S.W.2d 198 (1987) (improper venue, unlike the objection to lack of subject matter jurisdiction, can be waived by appearance).

We emphasize the fact that Pam steadfastly objected to the Saline County Chancery Court’s venue and ultimately prevailed on that issue in Tortorich II. Accordingly, we reversed and dismissed Tony’s absolute divorce action. As this court has said so many times, the venue issue is characterized as one of jurisdiction of the person, the improper assertion of which, in that instance, justifies issuance of a writ of prohibition. Steve Standridge Insurance, Inc. v. Langston, 321 Ark. 331, 900 S.W.2d 955 (1995). Stated another way, we have recognized that we commonly issue writs of prohibition when venue is improperly laid, and we have said that the situation is the equivalent of a lack of jurisdiction of the person. Fausett v. Host, 315 Ark. 527, 868 S.W.2d 472 (1994). Thus, in these circumstances when venue or jurisdiction of the person is not waived by the defending party, the trial court, which erroneously assumes venue or jurisdiction of a person, has no power or authority to act. See West Memphis Sch. Dist. No. 4 v. Circuit Court, 316 Ark. 290, 871 S.W.2d 368 (1994). Here, the Saline County Chancery Court had no authority to act or proceed with Tony’s divorce action against Pam, and accordingly the Pulaski County chancellor’s orders entered on December 15, 1993, February 2, 1996, and February 28, 1997, remained effectual and controlling throughout all the parties’ proceedings and appeals.

In conclusion, we wish to emphasize the General Assembly’s enactment of Ark. Code Ann. § 9-12-303(a) and (c) (Repl. 1993), and point out that if this statute had been followed, the two chancery courts’ conflicting orders could have been avoided. In particular, § 9-12-303(c) provides as follows:

When a spouse initiates an action against the other spouse for an absolute divorce, divorce from bed and board, or separate maintenance, then the venue for the initial action shall also be the venue for any of the three (3) named actions filed by the other spouse, regardless of the residency of the other spouse.

Under the plain language of § 9-12-303(c), once a plaintiff spouse has filed for (1) absolute divorce, (2) limited divorce, or (3) separate maintenance, the defendant spouse can no longer go to a different court (division or county) to file any one of the three named marital-related actions. Instead, the defendant spouse, regardless of his own county of residence, must file any new marital cause of action in the same action the plaintiff spouse already initiated.

In the present case, because Pam had filed suit against Tony first in Pulaski County Chancery Court, venue was clearly established in Pulaski County for any divorce action later brought by Tony. Thus, the Pulaski County chancellor properly concluded that Tony is in arrears in his payments for alimony, child support, and health insurance.

For the reasons above, we affirm.

Corbin and Brown, JJ., not participating.

       Tony did not question the Pulaski County chancellor’s granting Pam a limited divorce.


author: Robert L. Brown, Justice.

text:
    Ricky L. COOK v. STATE of Arkansas
    CR 97-1215
    968 S.W.2d 589
    Supreme Court of Arkansas
    Opinion delivered April 30, 1998

      Mashburn & Taylor, by: Scott E. Smith, for appellant.

      Winston Bryant, Att’y Gen., by: Brad Newman, Asst. Att’y Gen., for appellee.
   Robert L. Brown, Justice.

On November 2, 1997, appellant Ricky L. Cook was stopped by Trooper James P. Baker of the Arkansas State Police for driving ninety-one miles per hour in a sixty mile-per-hour zone. After failing four field sobriety tests, Cook was arrested and charged with DWI, first offense, and speeding. On May 15, 1997, following a bench trial Cook was found guilty of DWI, first offense. Sentencing was set for June 19, 1997. At the subsequent sentencing hearing, the circuit court asked if Cook’s driver’s license had been suspended by the Department of Finance and Administration (DF&A) pursuant to Ark. Code Ann. § 5-65-104 (Repl. 1997). Cook’s counsel told the judge that a hearing had been conducted at DF&A and that DF&A had decided not to suspend Cook’s driver’s license because of the likelihood of Cook’s success at trial. The circuit court then sentenced Cook to 365 days in jail with 360 days suspended, fined him $350 for DWI and $100 for speeding, and suspended his driver’s license for 120 days.

Cook next moved for reconsideration of this judgment on the basis that the circuit court no longer had jurisdiction to suspend a driver’s license after the enactment of Act 802 of 1995, now codified as § 5-65-104 (Repl. 1997), because that authority has been delegated to the executive branch. On July 10, 1997, the circuit court denied the motion for reconsideration. The circuit court also wrote a letter to counsel in connection with the denial of the reconsideration motion and told counsel that Act 143 of 1961 now codified as Ark. Code Ann. § 27-50-306 (Repl. 1994), gave the court the authority to suspend drivers’ licenses for moving traffic violations.

Cook’s sole point on appeal is a reiteration of his motion for reconsideration that after the passage of Act 802 of 1995, the judiciary no longer has jurisdiction to suspend or revoke a person’s driver’s license for DWI. Rather, the General Assembly, according to Cook, has transferred this power to the executive branch, and specifically to DF&A. The State responds that this appeal is moot due to the fact that the 120-day suspension of Cook’s driver’s license has now passed, and Cook’s driver’s license has been reinstated.

As an initial matter, we acknowledge that this court is not required to address issues on appeal that have become moot. See, e.g., Wright v. Keffer, 319 Ark. 201, 890 S.W.2d 271 (1995). It is also clear from the facts of this case that the resolution of the issue presented has become moot with respect to Cook. Nevertheless, this court has recognized an exception to the mootness doctrine “for cases that are capable of repetition yet evading review, being cases in which the justiciable controversy will necessarily expire or terminate prior to adjudication.” Wright v. Keffer, 319 Ark. at 203, 890 S.W.2d at 272. See also Nathaniel v. Forrest City School Dist. No. 7, 300 Ark. 513, 780 S.W.2d 539 (1989); Robinson v. Shock, 282 Ark. 262, 667 S.W.2d 956 (1984). Because it is likely that defendants in the future may well be confronted with this precise issue but yet be unable to appeal the point due to the passage of the suspension time, we will consider the merits of the issue. We turn then to the issue of whether the circuit court had the authority to suspend Cook’s driver’s license under these facts.

Some history is helpful here. Prior to July 1, 1996, circuit courts had the express authority to suspend driver’s licenses for DWI convictions under the Omnibus DWI Act. See § 5-65-101 through 311 (Repl. 1993). However, the General Assembly passed Act 802 of 1995, which completely replaced the procedures for suspension by establishing an administrative process. Under Act 802 of 1995, and the new § 5-65-104 (Repl. 1997), all suspensions are issued by the Office of Driver Services, a division of DF&A. The circuit court’s involvement in the suspension process is limited under Act 802 to appeals of these suspensions. Ark. Code Ann. § 5-65-104(a)(9)(c) (Repl. 1997).

Act 802 does, however, provide that any administrative suspension by DF&A will be in addition to those ordered by courts of competent jurisdiction:

The administrative suspension or revocation of a driver’s license as provided for by this section shall be supplementary to and in addition to the suspensions or revocations of driver licenses which are ordered by a court of competent jurisdiction for offenses under §§ 5-64-710, 5-65-116, and 27-16-914, or any other traffic or criminal offense wherein a suspension or revocation of the driver’s license is a penalty for the violation.

Ark. Code Ann. §5-65-104(f) (Repl. 1997). In light of this provision in Act 802, the question becomes whether any other statute gives the courts authority to suspend driving privileges under these facts.

As the circuit court stated in its Letter Opinion denying the motion for reconsideration, Act 143 of 1961, now codified as § 27-50-306, provides the circuit courts with authority to assess additional penalties for a moving traffic violation, including suspension of a driver’s license for one year. See Ark. Code Ann. § 27-50-306(1) (Repl. 1994). Thus, as applied to the case at hand, § 27-50-306(1) resolves the issue entirely. Cook was not only convicted of DWI, first offense, but he was also convicted of speeding, which entailed driving ninety-one miles per hour in a sixty mile-per-hour zone. The circuit court assessed suspension of the driver’s license as a penalty for both convictions and did not specify whether it was tied to one or the other. Under § 27-50-306, the conviction for a moving traffic violation, speeding, is sufficient in and of itself to warrant a suspension of Cook’s driver’s license.

Because suspension of a driver’s license is unquestionably a penalty available to the circuit court for speeding under § 27-50-306(1), we need not reach the issue in this case of whether suspension of a driver’s license by the circuit court is an appropriate sanction where DWI is the sole offense involved.

Affirmed.

Glaze, J., concurs.

       The May 15, 1997 order does not refer to speeding, but the June 19, 1997 order refers to Cook’s guilt for both offenses, and he was sentenced accordingly.


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

text:
    Joshua GARCIA v. STATE of Arkansas
    97-765
    969 S.W.2d 591
    Supreme Court of Arkansas
    Opinion delivered April 30, 1998

      Young & Finley, by: Dale W. Finley, for appellant.

      Winston Bryant, Att’y Gen., by: David R. Raupp, Asst. Att’y Gen., for appellee.
   Robert L. Brown, Justice.

On February 20, 1997, an amended delinquency petition was filed in Pope County Chancery Court, Juvenile Division, charging appellant Joshua Garcia with carrying a knife as a weapon in violation of Ark. Code Ann. § 5-73-121 (Repl. 1993). He was fourteen at the time of the charged offense. After a hearing on the matter, the juvenile court entered an amended order and adjudged Garcia delinquent. The juvenile court concluded that Garcia carried the three-and-one-half-inch blade with the intent to use it as a weapon and placed him on six months’ probation.

Garcia was initially charged with carrying a knife with the purpose to employ it as a weapon against a person in violation of Ark. Code Ann. § 5-73-120 (Supp. 1995), in addition to an unrelated third-degree battery charge. He pled guilty to the § 5-73-120 violation, but later was allowed to withdraw his plea. The unrelated battery charge was nolle prossed. On February 20, 1997, the State filed the amended petition charging Garcia under a separate statute, § 5-73-121, for having a knife three-and-one-half inches long for use with the purpose to employ the weapon against a person.

At the delinquency hearing for violation of § 5-73-121, Rudy Parks, the principal of Gardner Junior High School in Russellville, testified that on September 20, 1996, the school was having trouble with students spraying an undisclosed substance around the school building. He explained that Garcia was identified as carrying a spray can, and, as a result, he was brought to his office and searched. Parks testified that he found a large knife in the front pocket of his jeans. He also related to the court that Garcia told him he was going to give the knife to a friend. On cross-examination, the principal admitted that it “could have been possible” that the knife was recovered from Garcia’s book bag. He further agreed that no one suggested that Garcia intended to use the knife to injure another student. Bryce Davenport, the school’s resource officer and a member of the Russellville Police Department, next testified that the knife’s blade measured three-and-one-half inches in length.

Garcia did not call any witnesses on his behalf, and his attorney moved for a dismissal of the charge, arguing that the State was required to prove that he carried the knife with the intent to use it as a weapon and that the State’s evidence failed in this respect. The juvenile court found as follows:

I’m basing my finding on the basis of a knife with a blade three and [one] half inches or longer in his possession and the statute makes that fact a prima facie case. And there is nothing to rebut that.

The amended order which was entered stated in part:

The defendant is guilty of the offense as charged in that he had in his possession a knife having a blade three and one-half inches in length. Giving effect to the relevant statues (sic) it appears that the knife was carried with the intent to use it as a weapon against a person.

Garcia now claims on appeal that the juvenile court erred in not requiring proof of intent to possess the knife as a weapon. He points out that the amended delinquency petition asserted that he violated Ark. Code Ann. § 5-73-121 (Repl. 1993). Section 5-73-121 reads in relevant part:

(a) A person who carries a knife as a weapon, except when upon a journey or upon his own premises, shall be punished as provided by § 5-73-121(b).
(b) If a person carries a knife with a blade three and one-half inches (3V2") long or longer, this fact shall be prima facie proof that the knife is carried as a weapon.

Id.

Violation of § 5-73-121 is punishable by a fine of not less than $50 nor more than $200 or by imprisonment in the county jail for not less than thirty days nor more than three months, or by both a fine and imprisonment. Ark. Code Ann. § 5-73-123(b) (Repl. 1993). Section 5-73-121, which has not been amended, was enacted in 1961 under the following title: “AN ACT to Prohibit Carrying a Knife as a Weapon and to Create a Presumption That a Person Carrying a Knife With a Blade Three and a Half Inches (31/2") Long or Longer Is Carrying It as a Weapon.” 1961 Ark. Acts 457.

Since its enactment, this court has had few occasions to discuss the application of § 5-73-121. In Rowland v. State, 255 Ark. 215, 499 S.W.2d 623 (1973), we recognized that conduct falling under the former § 5-73-121 was a separate crime from conduct proscribed under the former § 5-73-120. In Smith v. State, 241 Ark. 958, 411 S.W.2d 510 (1967), we affirmed the revocation of a suspended sentence based on conduct which violated the former § 5-73-121. In Smith, the appellant was found near midnight running down the road with a knife which had a ten-inch blade.

A sister statute, although it constitutes a separate offense, is § 5-73-120. That is the statute under which Garcia was first charged. It reads in part:

A person commits the offense of carrying a weapon if he possesses a handgun, knife, or club on or about his person, in a vehicle occupied by him, or otherwise readily available for use with a purpose to employ it as a weapon against a person.

Ark. Code Ann. § 5-73-120(a) (Supp. 1995). The term “knife” includes “any bladed instrument that is capable of inflicting serious physical injury or death by cutting or stabbing.” Ark. Code Ann. § 5-73-120(b)(2). Violation of this section constitutes a Class A misdemeanor, which is punishable, under most circumstances, by a term of imprisonment not exceeding one year, or by a fine not exceeding $1,000, or by both imprisonment and a fine. Ark. Code Ann. § 5-73-120(d)(2); Ark. Code Ann. § 5-4-104(d) (Repl. 1993); Ark. Code Ann. § 5-4-201(b)(1) (Repl. 1993); Ark. Code Ann. § 5-4-401(b)(1) (Repl. 1993). Section 5-73-120 was enacted in 1975. Neither party argues that § 5-73-121 has, in any way, been implicitly repealed by the enactment of the later statute, § 5-73-120.

In Nesdahl v. State, 319 Ark. 277, 890 S.W.2d 596 (1995), a juvenile was convicted under § 5-73-120 for possessing a knife with a five-inch, double-edged blade that was found in a sheath in the small of his back. On appeal, he argued that the evidence was insufficient to support the judgment and attempted to make the argument that the trial court improperly relied on the prima fade element of the separate statute, § 5-73-121, to reach the result. We declined to reach that specific point because we held that the trial court did not err in concluding under the evidence presented that Nesdahl carried the knife for the purpose of employing it against another person.

In sum, the primary differences between § 5-73-120 and § 5-73-121 are (1) § 5-73-121 contains no specific element of purpose to use the knife as a weapon against another person; (2) § 5-73-121 carries a three-month maximum term in jail as compared to one year for violation of § 5-73-120; and (3) § 5-73-121 includes a presumption of guilt if the knife’s blade is three-and-one-half inches.

In reviewing a juvenile criminal case, this court looks at the record in the fight most favorable to the State and sustains the conviction if there is any substantial evidence to support it. Nesdahl v. State, supra; Graham v. State, 314 Ark. 152, 861 S.W.2d 299 (1993). In this case, the evidence supporting the conviction was the unrefuted evidence that Garcia was found in possession of a knife with a three-and-one-half-inch blade at junior high school. The juvenile court based its finding on the fact that Garcia was carrying such a knife and noted that there was nothing to rebut the presumption.

Garcia’s primary contention on appeal is that the presumption set out in § 5-73-121 impermissibly shifts the burden of proof to Garcia and violates his due process rights as a result. This court, in the past, has had occasion to discuss the constitutionality of presumptions, particularly with respect to the possession of controlled substances in various amounts and the resulting presumed intent to deliver those substances to third parties. This was the case in Stone v. State, 254 Ark. 1011, 498 S.W.2d 634 (1973), where we upheld a statutory presumption in connection with possession of heroin and established the following rule:

The general principle is well recognized that even in criminal prosecutions, Congress or a state Legislature may with certain Hmitations enact that when certain facts have been proved they shall be prima facie evidence of the existence of the main fact in question. . . . The Hmitations are these: There must be some rational connection between the fact proved and the ultimate fact presumed; the inference of the existence of the ultimate fact from proof of the other fact must not be so unreasonable or unnatural as to be a purely arbitrary mandate; and the accused must not be deprived of a proper opportunity to present his defense to the main fact so presumed and have the case submitted upon all the evidence to the jury for its decision.

Stone, 254 Ark. at 1020-21, 498 S.W.2d at 639-40, quoting O’Neill v. United States, 19 F.2d 322, 327 (8th Cir. 1927). See also Hooper v. State, 257 Ark. 103, 514 S.W.2d 394 (1974) (affirming convictions for possession of one-half pound of marijuana with the intent to deliver when the state proved only possession in excess of the statutory presumption).

This court’s precedent as evidenced in Stone v. State, supra, appears consistent with that of the United States Supreme Court. For example, in Ulster County Court v. Allen, 442 U.S. 140 (1979), the Court considered a challenge to the constitutionality of a New York statute that provided, with certain exceptions, that the presence of a firearm in an automobile is presumptive evidence of its illegal possession by all people inside the vehicle. In upholding the presumption on the facts of that case, the Court discussed the limits of presumptions in criminal cases:

The most common evidentiary device is the entirely permissive inference or presumption which allows — but does not require — the trier of fact to infer the elemental fact from proof by the prosecutor of the basic one and which places no burden of any kind on the defendant. See, e.g., Barnes v. United States, [412 U.S. 837,] 840 n.3. In that situation the basic fact may constitute prima facie evidence of the elemental fact. See, e.g., Turner v. United States, 396 U.S. 398, 402 n.2. When reviewing this type of device, the Court has required the party challenging it to demonstrate its invalidity as applied to him. Eg., Barnes v. United States, supra, at 845; Turner v. United States, supra, at 419-424. See also United States v. Gainey, 380 U.S. 63, 67-68, 69-70 (1965). Because this permissive presumption leaves the trier of fact free to credit or reject the inference and does not shift the burden of proof, it affects the application of the “beyond a reasonable doubt” standard only if, under the facts of the case, there is no rational way the trier could make the connection permitted by the inference. For only in that situation is there any risk that an explanation of the permissible inference to a jury, or its use by a jury, has caused the presumptively rational fact-finder to make an erroneous factual determination.

Ulster County Court, 442 U.S. at 157.

The threshold inquiry, accordingly, is whether the presumption in § 5-73-121 is mandatory or permissive. The Court has explained:

A mandatory presumption instructs the jury that it must infer the presumed fact if the State proves certain predicate facts. A permissive inference suggests to the jury a possible conclusion to be drawn if the State proves predicate facts, but does not require the jury to draw that conclusion.

Francis v. Franklin, 471 U.S. 307, 314 (1985) (citations omitted). If the presumption is permissive, it usually will not be viewed as relieving the State’s burden of persuasion to prove all elements of the crime beyond a reasonable doubt. Id. A permissive inference will violate due process only if the suggested conclusion is one that reason and common sense will not justify in the light of the proven facts before the jury. Id.; Ulster County Court v. Allen, supra. As long as the presumption is permissive, and there is a “rational connection” between the fact proved and the fact presumed, there is no merit to the accused’s contention that the burden of coming forward was impermissibly shifted to him. See, e.g., Barnes v. United States, 412 U.S. 837, 846 n.11 (1973), citing Leary v. United States, 395 U.S. 6 (1969); Tot v. United States, 319 U.S. 463 (1943).

In this case, the juvenile court was the fact finder and the State was only required to prove under § 5-73-121 that Garcia carried the knife as a weapon. The State was not required to prove that he carried it with the specific purpose of using it as a weapon against another person, which is the statutory element under § 5-73-120, even though the amended delinquency petition and the juvenile court’s order use that terminology. Whether there is a rational connection between Garcia’s carrying a knife with a three-and-one-half-inch blade to school and the intent to carry it as a weapon is the crucial issue at hand.

We conclude that there is such a connection and that the juvenile court did not err in its finding of delinquency. Garcia had the presumptively violative knife at junior high school during school hours. Viewing the proof in the light most favorable to the State as we must, he was carrying the knife in the front pocket of his pants. Why else would he be carrying an oversized knife at school under these circumstances than as a weapon? Though the principal told the court that Garcia told him he had the knife there to give to a friend, that fact alone does mean the knife was not carried to school as a weapon. Nor does the fact that he might have been merely showing the knife to others militate against its possession as a weapon.

Garcia himself did not make any claim to innocuous uses, and the trial court alluded to that fact in its ruling. We do not see how application of the presumption to Garcia under these facts violated his due process rights when the young man had to know that possession of a knife with a three-and-one-half-inch blade in a school environment was contrary to school rules, if not the law.

Affirmed.

Newbern, Glaze, and Imber, JJ., dissent.

David Newbern, Justice,

dissenting. By Act 457 of 1961, the Arkansas General Assembly enacted the following law that is now codified as Ark. Code Ann. § 5-73-121 (Repl. 1997):

Carrying a knife as a weapon.
(a) A person who carries a knife as a weapon, except when upon a journey or upon his own premises, shall be punished as provided by § 5-73-123(b).
(b) If a person carries a knife with a blade three and one-half inches (3V2") long or longer, this fact shall be prima facie proof that the knife is carried as a weapon.
(c) This section does not apply to officers whose duties include making arrests or keeping and guarding prisoners, nor to persons summoned by the officers to aid in the discharge of their duties while actually engaged in the discharge of their duties.

By Act 696 of 1975, the General Assembly enacted a comprehensive statute on the carrying of weapons, including knives, which, as amended, is now codified as Ark. Code Ann. § 5-73-120 (Repl. 1997). The later law covers fully the statements contained in subsections (a) and (c) of § 5-73-121 but does not include the language making the carrying of a knife with a blade of 3.5 inches or longer prima facie proof that the knife is carried as a weapon. The legislative oversight in fading to repeal the earlier statute has resulted in the retention in our law of a provision easily applied, as in this case, in violation of an accused’s right to due process of law.

Joshua Garcia was shown to have “carried” a knife with a 3.5-inch blade to school. The principal testified that he believed Mr. Garcia had the knife in his right front pocket but acknowledged on cross-examination the possibility that the knife was found in a bookbag. The principal further testified that Mr. Garcia explained that he was going to give the knife to a friend. The principal conceded that there had been no suggestion that Mr. Garcia intended to use the knife to injure anyone or to use the knife as a weapon.

Nothing else was introduced by the State to show that Mr. Garcia carried the knife “as a weapon.” The Chancellor, however, determined that this element of the offense, by operation of the “prima facie proof” language of § 5-73-121 (b), had been proven, and Mr. Garcia was adjudicated delinquent as he had presented, in the words of the Chancellor, “nothing to rebut that.”

The question that we must resolve is whether the Chancellor’s reliance on the “presumption” found in § 5-73-121 (b) comports with the Due Process Clause of the Fourteenth Amendment, which, as the United States Supreme Court has explicitly held, “protects the accused against conviction except upon proof beyond a reasonable doubt of every fact necessary to constitute the crime with which he is charged.” In re Winship, 397 U.S. 358, 364 (1970).

The use of a presumption in a criminal case may violate the Due Process Clause if it permits a conviction without requiring the factfinder to conclude that the State has proved each element of the offense beyond a reasonable doubt. See Sandstrom v. Montana, 442 U.S. 510 (1979); Mullaney v. Wilbur, 421 U.S. 684 (1975); In re Winship, supra. See also Francis v. Franklin, 471 U.S. 307, 313 (1985)(stating due process requires the State to bear the “burden of persuasion beyond a reasonable doubt of every essential element of a crime”); Patterson v. New York, 432 U.S. 197, 215 (1977) (stating that Mullaney “surely held that a State must prove every ingredient of an offense beyond a reasonable doubt, and that it may not shift the burden of proof to the defendant by presuming that ingredient upon proof of the other elements of the offense”). See generally 1 Christopher B. Mueller & Laird C. Kirkpatrick, Federal Evidence § 77, at p. 367 (2d ed. 1994)(stating “that the prosecutor has the obligation to prove each element of the offense beyond a reasonable doubt” and “that the accused bears no proof burden whatsoever with respect to any element of the crime”).

The Supreme Court has recognized the importance of inferences and presumptions in our “adversary system of factfinding” and has conceded that “[i]t is often necessary for the trier of fact to determine the existence of an element of the crime — that is, an ‘ultimate’ or ‘elemental’ fact — from the existence of one or more ‘evidentiary’ or ‘basic’ facts.” County Court of Ulster County, New York v. Allen, 442 U.S. 140, 156 (1979). The validity of such “evidentiary devices” under the Due Process Clause depends upon “the strength of the connection between the particular basic and elemental facts involved and on the degree to which the device curtails the factfinder’s freedom to assess the evidence independently.” Id. The Court has stressed that “the ultimate test of any device’s constitutional validity in a given case remains constant: the device must not undermine the factfinder’s responsibility at trial, based on evidence adduced by the State, to find the ultimate facts beyond a reasonable doubt.” Id.

Thus, the power of legislatures or courts “to declare that one fact may be inferred from another is subject to ‘the basic requirement of Anglo-American law that no liability shall be imposed until the essential legal elements of that liability shall have been proved.’” 1 Jack B. Weinstein & Margaret A. Berger, Weinstein’s Evidence ¶303[02], at p. 303-11 (1996)(footnote omitted). See also Mueller & Kirkpatrick, supra, § 80, at p. 381 (stating “presumptions relating to elements of the charged offense create constitutional error if they are deployed against criminal defendants in conclusive terms or use language that has burden-shifting effect”).

In the Allen case, the Court discussed the variety of presumptions that exist in the law and prescribed different rules for assessing their validity. See also Sandstrom v. Montana, 442 U.S. at 514 (stating that the “nature of the presumption” at issue determines the “constitutional analysis” to apply); 2 McCormick on Evidence § 346, at p. 481 (4th ed. 1992)(“Under the Allen decision, these various kinds of presumptions differ not only procedurally, but also with regard to the tests for their constitutional permissibility as well.”).

First, the Court recognized the “permissive inference or presumption,” which, the Court said,

allows — but does not require — the trier of fact to infer the elemental fact from proof by the prosecutor of the basic one and which places no burden of any kind on the defendant. In that situation the basic fact may constitute prima facie evidence of the elemental fact.

County Court of Ulster County, New York v. Allen, 442 U.S. at 157. A “permissive” inference or presumption “leaves the trier of fact free to credit or reject the inference and does not shift the burden of proof.” Id. Therefore, the Court concluded, the use of such a presumption typically will not operate to relieve the State of its obligation, as recognized in the Winship case, to prove each element of the offense beyond a reasonable doubt.

The use of a permissive presumption will, however, violate due process if “there is no rational way the trier could make the connection permitted by the inference.” Id. Thus, even with respect to permissive presumptions, there must be “a ‘rational connection’ between the basic facts that the prosecution proved and the ultimate fact presumed,” and the presumed facts must follow “more likely than not” from the basic or evidentiary facts proved by the State. Id. at 165.

The second type of presumption that the Court discussed in the Allen case is the “mandatory presumption,” which the Court described as “a far more troubling evidentiary device.” Id. at 157. As the Court observed, a mandatory presumption “tells the trier of fact that he or they must find the elemental fact upon proof of the basic fact, at least unless the defendant has come forward with some evidence to rebut the presumed connection between the two facts.” Id. A more stringent test must be used in determining the validity of a mandatory presumption. “[U]nless the evidence necessary to invoke the inference is sufficient for a rational jury to find the inferred fact beyond a reasonable doubt,” the use of a mandatory presumption violates the Due Process Clause. Id. at 166. The State “may not rest its case entirely” on a mandatory presumption “unless the fact proved is sufficient to support the inference of guilt beyond a reasonable doubt.” Id. at 167. See also Mueller & Kirkpatrick, supra, § 80, at p. 382 (stating that a mandatory presumption is valid “only if the basic facts make the presumed fact true beyond a reasonable doubt”); 1 Wharton’s Criminal Evidence § 3:4, at p. 139 (15th ed. 1997).

Thus, a significant difference between permissive presumptions and mandatory presumptions concerns the applicable “standard[ ] of proof required to establish a rational connection” between the proven “basic facts” and the presumed “ultimate facts.” Wharton’s, supra, § 3:4, at p. 138. With respect to permissive presumptions, there is a “rational connection,” and thus no constitutional infirmity, if the trier of fact could infer from the basic fact that it is “more likely than not” that the ultimate fact exists. With respect to mandatory presumptions, there is a “rational connection,” and thus no constitutional infirmity, if the trier could infer from the basic fact that the ultimate fact exists “beyond a reasonable doubt.”

The majority opinion in this case mentions the two kinds of presumptions, but it does not say whether the language in question is one or the other. The significance of the distinction may be lost in this case, however, as the majority misses an important caveat in the Allen opinion. The Supreme Court limited the applicability of the more lenient “more likely than not” standard to cases in which the permissive presumption “is not the sole and sufficient basis for a finding of guilt.” County Court of Ulster County, New York v. Allen, 442 U.S. at 167. Thus, where a permissive presumption is the only evidence offered by the State to prove an essential element of the offense, the applicable standard is the “beyond a reasonable doubt” standard. In that situation, due process requires that the trier of fact be able to infer from the basic fact that the ultimate fact exists beyond a reasonable doubt. See United States v. Allen, 127 F.3d 260, 270 (2d Cir. 1997); State v. Delmarter, 845 P.2d 1340, 1349-50 (Wash.App. Div. 2 1993).

The majority recognizes that the sole basis recited by the Chancellor for his finding was the length of the blade and the lack of rebuttal. The majority seems to state its own factual finding or perhaps “rationale” as follows: “Viewing the proof in the light most favorable to the State as we must, he was carrying the knife in the front pocket of his pants. Why else would he be carrying an oversized knife at school under these circumstances than as a weapon?” Many answers suggest themselves immediately, e.g., to whittle at recess or on the way home, to show the knife to a friend, to play mumbledypeg, to sharpen pencils, etc. Even if the Chancellor had recited those facts and the “why else” logic, it would have fallen far short of demonstrating that the “elemental” fact is shown beyond a reasonable doubt by proof of the “basic” fact.

According to the decisions of the Supreme Court,

... a statutory presumption cannot be sustained if there be no rational connection between the fact proved and the ultimate fact presumed, if the inference of the one from proof of the other is arbitrary because of lack of connection between the two in common experience. This is not to say that a valid presumption may not be created upon a view of relation broader than that a jury might take in a specific case. But where the inference is so strained as not to have a reasonable relation to the circumstances of life as we know them, it is not competent for the legislature to create it as a rule governing the procedure of courts.

Tot v. United State, 319 U.S. 463, 467-68 (1943). See Leary v. United States, 395 U.S. 6, 36 (1969)(stating “a criminal statutory presumption must be regarded as ‘irrational’ or ‘arbitrary,’ and hence unconstitutional, unless it can at least be said with substantial assurance that the presumed fact is more likely than not to flow from the proved fact on which it is made to depend”). “Common experience” fails to sustain such an inference in this case, and the majority opinion offers absolutely no assurance, let alone “substantial assurance,” Leary v. United States, supra, that the two facts are “very probably connected.” United States v. Adams, 293 F. Supp. 776, 782 (S.D.N.Y. 1968).

The only case in which § 5-73-121(b) has been recited as a basis for sustaining a conviction is Smith v. State, 241 Ark. 958, 411 S.W.2d 510 (1967). An officer observed Mr. Smith running from the scene of a burglary while carrying a ten-inch “corn knife or meat cleaver” in his hip pocket. That conviction could easily have been sustained under § 5-73-120, the more recent statute that requires the State to prove the accused possessed a knife “for use with a purpose to employ it as a weapon against a person.” To allow the State to prove Joshua Garcia guilty of a criminal offense by evidence that he possessed a tool as common as a 3.5-inch knife is constitutionally intolerable.

I respectfully dissent.

Glaze and Imber, JJ., join in this dissent.

       Section 5-73-121 only requires that the knife be carried as a weapon as opposed to possession with the use to employ the weapon against another person.