author: George Rose Smith, Justice.

text:
    Verlon BRYANT v. SOUTHERN SCREW MACHINE PRODUCTS COMPANY, INC.
    85-242
    707 S.W.2d 321
    Supreme Court of Arkansas
    Opinion delivered April 28, 1986

      Lesly W. Mattingly, for appellant.

      Allen, Cabe & Lester, A Professional Association, by: H. William Allen, for appellee.
   George Rose Smith, Justice.

The appellant was employed by the appellee as a toolmaker and foreman for a total of about 21 years. He was discharged in 1984 for having allegedly accepted a $100 check in return for having ordered light bulbs for the appellee from a particular company, which sent him the check. Bryant brought this action against the appellee for damages for wrongful discharge and also for the outrageous but unspecified manner in which he was discharged. The appellee moved for summary judgment on the ground that the plaintiff had been an employee at will and could be discharged without cause. See Griffin v. Erickson, 277 Ark. 433, 642 S.W.2d 308 (1982). The motion was denied.

Upon trial the appellee again asserted its position in a motion for a directed verdict, but the trial court let both causes of action go to the jury. The jury found for the plaintiff on the issue of wrongful discharge and awarded $65,000 in damages, but found for the defendant on the issue of outrageous conduct. The defendant reasserted its position in a motion for judgment notwithstanding the verdict. The trial court granted that motion and entered judgment for the defendant, holding that the court had made an error of law in permitting the jury to find that there was an enforceable contract of employment between the parties. The appeal was taken to this court as presenting a tort question.

The only argument for reversal is that the trial court should not have entered judgment n.o.v. on the basis of the employment-at-will doctrine.

The trial court’s action was correct. In the Griffin case, supra, we adhered to our settled rule that a contract of employment for an indefinite term is a contract at will, with either party having an absolute right to terminate the relationship at any time. Here Bryant introduced no substantial evidence that his employment was anything other than indefinite as to its duration. He submitted proof that in 1979, after he had been employed for many years, the company distributed an Employee Handbook which stated that after a probationary period of 60 days an employee would be entitled to all fringe benefits. The handbook also stated that certain conduct on the part of employees would not be tolerated, including dishonesty, cheating, willful negligence, theft, loafing during working time, and insubordination.

There was nothing in the handbook assuring any employee that he or she would be employed for a particular length of time or would be discharged only for cause. Hence this is not the type of case we had in mind in Jackson v. Kinark Corp., 282 Ark. 548, 669 S.W.2d 898 (1984), when we mentioned the possibility of modifying the common-law rule. Here the handbook did not alter that rule. Bryant offered nothing else to show that his employment was other than at will. Under the law the company had the absolute right to terminate Bryant’s employment at any time, just as he had the right to quit his job at any time. There was therefore no question of fact for the jury with regard to the asserted cause of action for wrongful discharge.

Affirmed.

Purtle, J., not participating.


source: Caselaw Access Project

author: George Rose Smith, Justice. Steele Hays, Justice,

license: Public Domain

text:
    Charles D. RAGLAND, Commissioner of Revenues v. DELTIC FARM & TIMBER COMPANY, INC.
    85-249
    708 S.W.2d 90
    Supreme Court of Arkansas
    Opinion delivered April 28, 1986
    [Rehearing denied May 27, 1986.]

      Kelly S. Jennings, for appellant.

      James E. Baine, for appellee.

       Purtle, J., not participating.

   George Rose Smith, Justice.

This is a use tax case. The appellant, the Arkansas Commissioner of Revenues, assessed a tax deficiency against the appellee, Deltic, on the theory that a use tax should have been paid on Deltic’s purchase of a large crane. Deltic claimed that the purchase was a tax exempt transaction, because the crane is used in the manufacture of lumber and of wood chips, the latter being eventually sold to paper mills. Ark. Stat. Ann. § 84-3106(D)(2) (Repl. 1980). The Commissioner denied the exemption, holding that the crane is not used in the manufacturing part of Deltic’s business, or if so, the crane is not used “directly” in manufacturing, as the statutory exemption requires.

Deltic paid the tax under protest and brought this action for its recovery. The chancellor rejected the Commissioner’s contentions and directed a refund of the tax. The appeal comes to this court as presenting an issue of statutory construction. Rule 29(l)(c).

The facts are not seriously in dispute. From 1973 until 1979 Deltic conducted only a sawmill operation in which it sawed logs into lumber and sold the lumber to wholesalers. Owing to economic conditions the sawmill became so unprofitable that Deltic was forced to consider going out of business. Deltic decided to solve its problem by purchasing low-grade timber, referred to as “stumpage,” which would be used as much as possible for the production of lumber, with the rest being used in the production of high-quality wood chips.

Deltic put its plan into effect by constructing a $3.2 million “merchandiser,” which is a physical plant that was built next to the sawmill operation and supplements that facility. The entire merchandiser was considered by the Commissioner to be tax exempt except for the crane now in question. That crane, bought for $572,519, is set in concrete and serves the merchandiser primarily and the sawmill secondarily.

Stumpage is brought in trucks from the woods to Deltic’s plant. Stumpage that is already cut to sawmill length is unloaded at the sawmill department and is used in the manufacture of lumber, as before. Trucks also bring in low-grade stumpage of tree length rather than of sawmill length. The crane lifts those logs to a height of perhaps 14 feet and places them on the “cut-up deck” of the merchandiser. The chancellor’s order describes the cut-up process in this language:

The merchandiser cuts part of the low-grade stump-age which is in tree lengths into sawlog lengths ready for cutting into lumber and the rest of the stumpage is used for the production of high-quality chips that must meet rigid quality standards. By cutting the stumpage into sawlog lengths, the first step is avoided in the lumber department of the plant where high-quality tree-length stumpage is first cut into sawlog lengths. This first cut into sawlog lengths at the merchandiser is as important and requires as much skill as the remaining cutting determinations in the manufacturing of lumber.

The stumpage that has been cut in the merchandiser to sawmill length is carried, apparently not by the crane, to the sawmill to be made into lumber. The rest of the low-grade stumpage is debarked in the merchandiser, cut into chips, and sorted as to size. The chips must meet certain specifications, have less than 1% bark, and be free from soil and other objectionable substances. A Deltic witness testified that making pulpwood chips is not just a matter of haphazardly cutting the log into little particles; a rigid specification by the paper mill must be met. The witness said: “I personally think we manufacture those chips.” The chips are sold to five different paper mills, one of which requires hardwood chips.

The chancellor seems to have found that the chips are in fact manufactured, as the lumber admittedly is, for his order states: “After stumpage arrives at the mill it is moved through a continuous process that produces an end result of finished lumber and high-quality chips.” With regard to what is essentially an issue of fact, we cannot say that the chancellor’s finding is clearly erroneous. Further, the crane plays a part not only in the manufacture of the chips but also in the production of lumber, in that a substantial part of the stumpage that the crane lifts to the cut-up deck is first cut to sawlog length there and then is made into lumber at the sawmill department.

The Commissioner also argues that even though the crane may play a part in the manufacture of lumber and chips, the crane is not used “directly” in manufacturing. Deltic’s proof, which is not contradicted, shows pretty clearly that the sawmill department could not operate without the merchandiser department, and vice versa. The chancellor described the whole Deltic plant as an integrated operation. His order goes on to say:

The use of low-grade stumpage (tree-length pulpwood) through the merchandiser is necessary for the economics to allow the plant to operate and without the merchandiser operating, the Company could not for economic reasons justify continuing to operate the plant. Without the merchandiser department the plant could not use low-grade stumpage since the time element in cutting the stumpage would be too great, slow down the lumber department operation, and divert resources from producing finished lumber. . . .
Economics require that the merchandiser be operated, and without it working with the rest of the plant in a continuous, well-synchronized operation, the cost of raw materials would be too high to allow the plant to continue to operate. . . .
Economics would not allow the merchandiser to operate without the use of the crane. The primary function of the crane is to commence the manufacturing process by moving stumpage from the storage area onto the deck of the merchandiser where tree-length stumpage is cut. . . .
It is the opinion of this Court that the crane in question was used directly in producing the finished end product into the form in which it was sold in the market, and consequently was exempt.

Our decision in Cheney v. Georgia Pacific Paper Corp., 237 Ark. 161, 371 S.W.2d 843 (1963), is pertinent. There a turbine generator was used to generate electricity for the paper mill and to supply steam that was used in the paper-making process. We said that “it seems apparent to us that the steam turbine generator is a primary facility in the paper manufacturing process. If the turbine generator were removed the manufacturing operation would cease.” That case was followed in another not unlike this one, Arkansas Ry. Equipment Co. v. Heath, 257 Ark. 651, 519 S.W.2d 45 (1975). There we applied the use tax exemption to two diesel locomotive cranes that were used to move and to hold old railroad tank cars that were being made into highway culverts. In holding that the cranes were used directly in manufacturing the culverts we reasoned: “The machinery here involved is not only an integral part of the operation but the operation could not be performed without the use of the machinery.” Those observations are equally applicable to Deltic’s crane.

The Commissioner stresses our settled rule that tax exemptions are strictly construed, that to doubt is to deny the exemption, and that therefore the exemption must be established beyond a reasonable doubt. That principle applies especially to the trial courts, who hear the testimony and determine issues of credibility. Even in tax exemption cases, however, we review the chancery court’s findings de novo and reverse only if they are clearly against the preponderance of the evidence. Arkansas Beverage Co. v. Heath, 257 Ark. 991, 993, 521 S.W.2d 835 (1975). Here the chancellor’s findings and conclusions are not clearly erroneous.

Affirmed.

Purtle, J. not participating.

Hays, J., dissents.

Steele Hays, Justice,

dissenting. I disagree with the majority’s approval of the test applied by the chancellor, i.e., that the crane is a necessary part of the operation on the basis of economics. There is no authority for this rationale. The chancellor was analogizing to tests in our decisions used to determine whether certain machinery was “directly” used in manufacturing. The test, however, was applied to the mechanics of the manufacturing operation and not the economics: If a particular piece of equipment or machinery were removed from the manufacturing process, would the operation come to a physical halt? Arkansas Rwy. & Equip. Co. v. Heath, 257 Ark. 651, 519 S.W.2d 45 (1975); Cheney v. Georgia-Pacific Corp., 237 Ark. 161, 371 S.W.2d 843 (1963).

The Cheney case, supra, which the majority cites as pertinent to this issue had nothing to do with economics. The turbine in question was used to generate electricity for the plant, but the steam from the turbine was also directly used in the paper making process of the plant. The physical operation of the plant was dependant on the turbine for its operation, not the economic viability of the plant.

Nor does the language of the statute creating the exemption give any indication that the legislature intended such an interpretation. The language is clear and straightforward:

Ark. Stat. Ann. § 84-3106. There are hereby specifically exempted from the taxes levied in this Act:
(D)(1) * * *
(2) Machinery and equipment used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging an article of commerce. . .

Ark. Stat. Ann. § 84-3106(D)(2)(c) provides:

It is the intent of this subsection to exempt only such machinery and equipment as shall be utilized directly in the actual manufacturing or processing operation at any time from the initial stage where actual manufacturing or processing begins through the completion of the finished article. . .The term “directly” as used in this Act is to limit the exemption to only the machinery and equipment used in actual production during processing, fabricating or assembling raw materials or semifinished materials into the form in which such personal property is to be sold in the commercial market.

The statute is obviously concerned with limiting the exemption to the actual manufacturing process and the language doesn’t begin to embrace the meaning the chancellor and the majority have given it. Furthermore, any exemption provision must be strictly construed against the exemption and to doubt is to deny the exemption. C & C Machinery v. Ragland, 278 Ark. 629, 648 S.W.2d 61 (1983); Ragland v. Ark. Writer’s Project, 287 Ark. 155, 697 S.W.2d 94 (1985).

I find no support for the majority position under the statute or our prior cases. The issue I believe is whether a piece of equipment which is used preliminarily to the manufacturing process will be considered as being used “directly” in the “actual manufacturing process.” The clarification provided by the legislature in § 84-3106(D)(2)(c), would indicate not. Neither would our prior cases. Ark. Rwy. & Equip. Co. v. Heath, supra, cited by the majority as being similar, is readily distinguishable. In Heath, the cranes were used to unload old railroad cars that were converted into culverts. However, the cranes were also used throughout the manufacturing process to hold the cars and reposition them as the transformation process took place. The initial part of the crane’s function of unloading the cars comprised only five percent of its total work time.

The chancellor also had before him regulations and a policy statement promulgated by the Commissioner which was in effect during the time of the audit and which further delineated the meaning of “directly”:

Machinery and equipment used in actual production include machinery and equipment that meet all other applicable requirements and which cause a recognizable and measurable mechanical, chemical, electrical or electronic action to take place as a necessary and integral part of manufacturing, the absence of which would cause the manufacturing operation to cease. “Directly” does not mean that the machinery and equipment must come into direct physical contact with any of the material that become necessary and integral parts of the finished product. Machinery and equipment which handle raw, semi-finished or finished materials or property before the manufacturing process begins are not utilized directly in the manufacturing process.

The above regulation was enacted as an amendment to § 84-3106 by the 1985 legislature.

While I think the plain language of our statute is clear enough to eliminate the crane from exemption status, should there be any doubt, it must be resolved against allowing the exemption.


author: Robert H. Dudley, Justice.

text:
    BORG-WARNER ACCEPTANCE CORPORATION v. Jefferson L. KESTERSON
    85-310
    708 S.W.2d 606
    Supreme Court of Arkansas
    Opinion delivered April 28, 1986

      Howell, Price & Trice, P.A., by: Max Howell and Carey E. Basham, for appellant.

      Joe H. Hardegree, for appellee.
   Robert H. Dudley, Justice.

Appellant, Borg-Warner Acceptance Corporation, filed a complaint against the appellee, Jefferson L. Kesterson, seeking a deficiency judgment of $50,433.54, plus costs, interest, and attorney’s fees. The complaint was based upon a retail installment sales contract. On August 10, 1983, after the appellee had filed an answer, the appellant mailed requests for admissions to the appellee’s attorney. The requests included the following: “Please admit that the Defendant [appellee] is indebted to the Plaintiff [appellant] in the sum of $50,433.54, plus interest thereon at the rate provided by the Contract until paid in full.” The appellee did not answer the requests for admissions within 30 days after service, but finally responded on October 5, 1983. No excusable neglect, unavoidable casualty, or other just cause was pleaded as a reason for the untimely response. The appellant subsequently filed a motion requesting that the matters contained in the requests for admissions be deemed admitted and praying for summary judgment in the amount of $50,433.54, plus interest and costs. The trial judge refused to deem the requests admitted and denied the motion for summary judgment. A jury trial on the issue of the debt resulted in a verdict for the appellee. Appellant argues that the trial court erred in refusing to deem the requests admitted, in denying the motion for summary judgment, and in setting the matter for jury determination. The argument has merit, and accordingly, we reverse and instruct the trial court to grant judgment in favor of the appellant.

ARCP Rule 36 provides in pertinent part:

(a) Request for Admission. A party may serve upon any other party written request for the admission, for purposes of the pending action, of the truth of any matters within the scope of Rule 26(b) set forth in the request that relate to statements or opinions of fact, ....
Each matter of which an admission is requested shall be separately set forth. The matter is admitted unless, within 30 days after service of the request, or within such shorter or longer time as the court may allow, the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter, ....
(b) Effect of Admission. Any matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission.

(Emphasis added.)

ARCP Rule 6(b)(2) provides broadly for extensions of time to respond in instances of excusable neglect. It applies to requests for admissions. Barnett Restaurant Supply, Inc. v. Vance, 279 Ark. 222, 650 S.W.2d 568 (1983). Excusable neglect was neither pleaded nor proven in this case, and the response was not timely filed. In such cases we have consistently held that an untimely response results in an admission. In Womack v. Horton, 283 Ark. 227, 674 S.W.2d 935 (1984), we explained:

The policy of this court through the years has been to require compliance with the rule governing responses to requests for admissions. Barnett Restaurant Supply, Inc. v. Vance, 279 Ark, 222, 650 S.W.2d 568 (1983), citing Stocker v. Hall, 269 Ark. 468, 602 S.W.2d 662 (1980); White River Limestone Products Co. v. Mo. Pac. Rd. Co., 228 Ark. 697, 310 S.W.2d 3 (1958). If the responses are not on time or are faulty for some other reason, such as not being signed by the parties or being inadequate and deficient, this court has made it a practice of deeming the requests to be admitted. Stocker v. Hall, 269 Ark. 468, 602 S.W.2d 662 (1980).

Accordingly, the case must be reversed and remanded for entry of the judgment.

We briefly discuss appellant’s other assignment of error because it appears to be a matter of some confusion. Appellant attached a certificate of no defense to its complaint. See Ark. Stat. Ann. § 27-1142 (Supp. 1985). Appellee did not file a timely affidavit of a good and valid defense. See Ark. Stat. Ann. § 27-1142. The appellant contends that the trial court erred in refusing to strike the answer. .See Ark. Stat. Ann. § 27-1142 (Supp. 1985). The trial court was correct.

ARCP Rule 8 sets out the required content of a complaint and of an answer. It is a rule of procedure and not a matter of substantive law. Ark. Stat. Ann. § 27-1142 does not conform with ARCP Rule 8, and therefore, it is deemed to be superseded even though it is not so listed in our per curiam order of December 18,1978. See Venable v. Becker, 287 Ark. 236, 697 S.W.2d 903 (1985). A suit to collect a debt is not a special proceeding as contemplated by ARCP Rule 81(a), and therefore, it is not subject to a different statute.

Reversed and remanded.

Purtle, J., not participating.


text:
    Allen Duncan GIBSON, et al., Individually and Derivatively on Behalf of The Strong Co., Inc. v. THE STRONG CO., INC., STRONG REALTY, INC., Arkansas Corporations, and William A. STRONG, Individually
    85-244
    708 S.W.2d 603
    Supreme Court of Arkansas
    Opinion delivered April 28, 1986

      Wright, Lindsey & Jennings, for appellant.

      Bridges, Young, Matthews, Holmes & Drake, by: R.T. Beard, III, for appellee.
   Robert H. Dudley, Justice.

The appellants, minority shareholders in an Arkansas corporation, seek appraisal rights for dissenting shareholders pursuant to Ark. Stat. Ann. § 64-707 (Repl. 1980). The trial court ruled that the appellants did not make a timely written objection to the merger and, therefore, were not entitled to have a judicially determined price for their minority shares. We affirm.

Appellants, Allen Duncan Gibson, Harry Allen Gibson, and Laura Ann Gibson, are minority shareholders in appellee, The Strong Company, Inc. Appellee, William A. Strong, is the majority shareholder and president of the company. On April 26, 1984, the board of directors of The Strong Company, Inc. held a scheduled meeting. At that meeting a plan to merge The Strong Company, Inc. into Strong Realty, Inc. was discussed. Appellant, Harry Gibson, a director, attended the meeting in his official capacity. Appellant, Allen Duncan Gibson, who was not a director, also attended the meeting. The board of directors approved a proposal to call a special shareholders’ meeting concerning the proposed merger of the two companies with Harry Gibson abstaining and Allen Duncan Gibson remaining silent. All shareholders were duly notified that a meeting would be held at a designated place in Pine Bluff at 11:00 a.m. on Monday, May 21, 1984, to vote on the plan of merger.

On May 4, 1984, Michael Crawford, an attorney from Houston, Texas, representing Allen Duncan Gibson, telephoned Richard Williams, a Little Rock attorney representing The Strong Company, Inc. At trial, Williams testified that Crawford told him during the phone conversation that appellants were agreeable to the merger, but that they did not have enough information to determine if the offered price was fair. Williams stated that he suggested that they meet after the May 21 shareholders’ meeting to discuss the price. Crawford’s testimony varied in some respects from that of Williams. The most important variance was that Williams stated that postponement of the May 21 meeting was never even discussed, while Crawford concluded from the conversation that the meeting would be delayed. Crawford admitted, however, that Williams never expressly stated that the meeting would be postponed and, in fact, that by May 18, three days before the meeting, Crawford realized that an agreement to postpone the meeting had not been made. Neither Crawford nor the appellants filed a written objection with the corporation prior to the May 21 meeting, and they did not attend the meeting. At the meeting the shareholders approved the plan of merger, and the meeting was adjourned at 11:40 a.m. After the meeting was adjourned, at 2:13 p.m. EST (1:13 p.m. CST), Crawford’s office telephoned a Western Union message to the corporation which stated an objection to the merger plan.

Ark. Stat. Ann. § 64-707 (Repl. 1980) permits a dissatisfied shareholder to withdraw from the corporate enterprise after merger and to obtain in cash the fair value of his shares, judicially determined if necessary, if he complies with three steps. Briefly stated, the dissenting shareholder is required (1) to object to the proposed merger in writing prior to or at the meeting at which the shareholders’ vote on the merger is to be taken, (2) not to vote in favor of the merger at the shareholders’ meeting, and (3) to make written demand on the surviving or new corporation for payment of the fair value of the stock within 10 days after the date of the vote. It is undisputed that appellants complied with the second and third steps since they did not vote in favor of the merger and made a written demand for payment four days after the shareholders’ meeting at which the merger was approved. The trial court held that the appellants did not comply with the first step which was to object to the proposed merger in writing prior to or at the shareholders’ meeting, and that step is the necessary predicate of the right to appraisal. The trial court was correct.

The appellants contend the chancellor erred in ruling that they did not comply with the first step because Williams, the attorney for The Strong Company, Inc., had actual notice of their objection to the plan of merger over two weeks before the May 21 shareholders’ meeting. We quickly dismiss the contention, without even discussing the statutory requirement that the notice be in writing, because there simply is no evidence that the appellants or their attorney gave Williams, or any of the appellees, actual notice of an objection to the plan of merger before the May 21 shareholders’ meeting. In fact, the evidence clearly shows that the appellants’ attorney, Crawford, stated that appellants desired to sell their stock. They simply requested more information in order to determine if the price was fair.

The appellants next contend that they gave written notice, on May 21, at T.13 p.m. and that a IV2 hour delay in complying with the statutory requirements should not be fatal to their position. The argument, if followed, would completely destroy the symmetry of the statute at issue. The statute does not aid dissenting shareholders alone, but also aids majority shareholders and the corporation. In National Supply Co. v. Leland Stanford Junior University, 134 F.2d 689, 692 (9th Cir. 1943), the court sagaciously wrote:

The statutory imperatives of timely objection and demand are the very substance of the consolidation. Stockholders are entitled to rely on the status of things as they appear on the date of the meeting and to govern themselves accordingly. They have the right to be advised of the number of shares objecting to the merger, since these objections foreshadow money demands to be made upon the new company. The extent of such foreseen demands is necessarily of influence with stockholders in appraising the wisdom of consolidation and in persuading them whether or not they should themselves object and claim the value of their holdings. The governing boards of the constituent corporations must similarly rely on the presence or absence of substantial dissent in determining whether the tentative agreement should be adhered to or abandoned.

The statute requires timely compliance with its first step.

During the oral argument of this case, the appellants contended that The Strong Company, Inc. is a closely held corporation, and there was no real doubt in the majority shareholders’ minds that the appellants did not want to be squeezed out of the corporation. From that, they argue we should find compliance. This type of argument was addressed in Klein v. United Theaters Co., 74 N.E.2d 319 (Ohio 1947), and the court wrote:

The argument is made . . . that defendant is not a large corporation with a floating supply of stock in brokers’ names, . . . but on the contrary defendant is a small, closely held corporation to which plaintiffs were well known; that there was no possible doubt in the minds of consenting shareholders at their meeting that plaintiffs were objecting to the sale; that it was clearly understood why they were objecting; and that the consenting shareholders had all the necessary information upon which to take action and were required to assume nothing.
The above statements would be very persuasive if the decision in these cases were to determine only the rights of the parties herein and did not require the interpretation of the statutes which apply to all corporations organized under the laws of Ohio. The General Assembly saw fit to enact Section 8623-72, General Code, to apply to all corporations and, therefore, these cases must be decided in the same way as though they concerned a large corporation with floating supplies of stock in various names, to which corporation the shareholders were not personally known and, likewise, their purported agents were not known to be honorable, upstanding persons. It is the law which must be declared in these cases and not the standing of the parties or attorneys.

The appellants additionally argue that the appellees should be estopped from demanding compliance with Ark. Stat. Ann. § 64-707 because of the actions of their attorney, Williams. Certainly majority shareholders and their attorneys owe a duty not to act in bad faith toward minority shareholders and will not be allowed to use their power in defiance of that duty at the expense of the minority shareholders. However, in this case, the chancellor made a finding of fact that Williams was not guilty of any wrongful conduct which caused appellants’ attorney, Crawford, to fail to comply with the first step. Findings of fact by a trial court will not be set aside unless they are clearly against the preponderance of the evidence. ARCP Rule 52; Warren v. Warren, 273 Ark. 528, 623 S.W.2d 813 (1981). A review of the evidence in this case reveals that the finding is not clearly against the preponderance of the evidence.

Affirmed.

Purtle, J., not participating.


author: Steele Hays, Justice.

text:
    Marie Farris FIFE and Marvin FIFE, Her Husband v. Clarence C. THOMPSON
    85-311
    708 S.W.2d 611
    Supreme Court of Arkansas
    Opinion delivered April 28, 1986

      Compton, Prewett, Thomas & Hickey, P.A., for appellants.

      W.H. Armstrong, for appellee.
   Steele Hays, Justice.

Clarence Thompson, appellee, acquired oil and gas leases to twenty acres of Ouachita County Arkansas, with the exception of a 1 /8th mineral interest belonging to Marie Fife, appellant. Though unable to obtain a lease from Mrs. Fife, Thompson began drilling operations and the well was completed as a producer in January, 1984. It has produced oil at a rate of several barrels a day since its completion.

Thompson filed suit against Mrs. Fife to impress a lien on her 1 /8th interest, less 1 /8th of 1 / 8th royalty, for the costs of drilling and operating the well, a total of $168,683.40, and for future operating costs. Mrs. Fife does not contend that Thompson’s costs are excessive, rather she claims he is a willful trespasser and that she is entitled to the value at the surface of all minerals attributable to her interest, plus $25,000 punitive damages. The chancellor held that while Thompson and Mrs. Fife were not technically co-tenants, their status was tantamount to co-tenancy and that Thompson was entitled to a lien upon 7 / 8ths of Mrs. Fife’s 1 /8th mineral interest until her proportionate share of the expenses is satisfied. Mrs. Fife has appealed. We believe the chancellor was correct.

The rule in a majority of jurisdictions holds that a lessee of the majority of mineral owners is entitled to remove the minerals, accounting to the non-leasing owner for his proportionate share, less the reasonable costs of producing the minerals at the surface. Williams & Meyers, Oil and Gas Law, § 502, pp. 572 and 573. The rationale for this principle doubtless rests on the fact that oil is capable of being removed by others and if an owner in common were free to block the removal of the oil, a valuable asset could be lost entirely to its owners.

Summers, Oil and Gas, § 38, p. 138 states:

In the previous section it was shown that in a majority of the jurisdictions in this country where the question has been raised, a co-tenant of lands containing oil and gas is privileged to take oil and gas therefrom without the consent of his co-tenants, but is under a duty to account to them for their share of the minerals taken after deducting the cost of production. . .The Courts have usually found, whether they were dealing with the co-ownership of land or the co-ownership of a separate mineral estate, sufficient reasons upon which to conclude that in either situation a co-tenant should be privileged to produce oil and gas, subject to a duty to the other co-tenants to account to them for their share of the minerals, less the reasonable cost of production.

Our own cases have embraced this rule, Ashland Oil and Refining Co. v. Bond, 222 Ark. 696, 263 S.W.2d 74 (1953):

It is a rule well established and plainly just that when one tenant in common has drilled a producing oil well upon the common property, he must be given credit for his reasonable expenses upon being required to account to his co-tenants for the oil withdrawn from the land. Prairie Oil & Gas Co. v. Allen, 8th Cir., 2 F.2d 566, 40 A.L.R. 1389; New Domain Oil & Gas Co. v. McKinney, 188 Ky. 183, 221 S.W. 245; Earp v. Mid-Continent Petroleum Corp., 167 Okla. 86, 27 P.2d 855, 91 A.L.R. 188; Paepcke-Leicht Lbr. Co. v. Collins, 85 Ark. 414, 108 S.W. 511; Burbridge v. Bradley Lbr. Co., 218 Ark. 897, 239 S.W.2d 285.

That statement of law was affirmed in McMillan, Trustee v. Powell, 235 Ark. 934, 362 S.W.2d 721 (1962).

The decree is affirmed.

Purtle, J., not participating.

       The chancellor’s memorandum opinion noted: the parties agree that the production from this well is not controlled by the Arkansas Oil and Gas Commission. Ark. Stat. Ann. § 53-106 (Repl. 1971) provides that all common sources of supply of crude oil discovered after January 1,1937, shall be controlled and regulated according to Act 105 of the Acts of 1939. Since the Smackover Lime in the Snowhill field is not controlled by the Arkansas Oil and Gas Commission, Thompson could not proceed under § 53-115 and establish a drilling unit. Paragraph 1(c) of § 53-115 provides in part, “Such order shall also provide that an owner who does not affirmatively elect to participate in the risk and cost of such operations shall transfer his right in such drilling unit and the production from the unit well to the parties who elect to participate therein for a reasonable consideration and on a reasonable basis, which in the absence of an agreement between the parties, shall be determined by the Commission. Such transfer may be either a permanent transfer or may be for a limited period pending recoupment out of the share of production attributable to the interest of such non-participating owner by the participating parties of an amount equal to the share of the costs that would have been borne by such non-participating party had he participated in such operations, plus an additional sum to be fixed by the Commission.”
      Paragraph 1 (e) provides that, “In the event there is an unleased mineral interest or interests in any such drilling unit, the owner thereof shall be regarded as the owner of a royalty interest to the extent of a one-eighth (1 /8th) interest in and to said unleased mineral interest and such royalty interest shall not be affected by the provisions of subparagraphs (c) and (d) above.”


text:
    Jack HILL v. BENTCO LEASING, INC.
    85-233
    708 S.W.2d 608
    Supreme Court of Arkansas
    Opinion delivered April 28, 1986
    [Rehearing denied June 2, 1986.]

      Tim D. Williams, for appellant.

      Young & Finley, by: James K. Young, for appellee.
   Steele Hays, Justice.

The issue here is whether a lease agreement between Jack Hill, appellant, and Bentco Leasing, appellee, was in fact a sale and, therefore, subject to a defense of usury.

Hill signed a lease with Bentco for a telephone system to be installed in Hill’s Townhouse motel. The agreement, signed in October of 1982, called for sixty monthly payments of $412.26. Hill had made only the first two payments when he sold the motel to Ray Krayecki. Hill assumed Krayecki would take up the lease payments to Bentco and Krayecki could not agree on terms so the system was repossessed by Bentco in January, 1983. Bentco filed suit against Hill in March, 1983 for $15,269, the amount of the purchase price had Hill chosen to buy the system outright. The claim was non-suited in July, 1984, and Bentco refiled in August, 1984 for $8,245, the sum of the lease payments due as of that date.

The case was tried in November, 1984. Hill defended on the ground that the agreement was in effect a sale and void for usury. Bentco maintained it was a true lease. The trial court found the arrangement to be a lease, distinguishing Bell v. Itek, 262 Ark. 22, 555 S.W.2d 1 (1977), because the lease did not contain an option to purchase, nor any provision for Hill to obtain title to the equipment. Upon amendment of Bentco’s complaint, the court awarded damages of $24,426, the total of the lease payments due over the sixty month period. Hill appeals from the judgment.

In Itek, supra, we expressed concern over conditional sales being disguised as lease agreements, permitting charges that under a credit sale would constitute usury. We warned that such transactions would be closely examined in the future. We initially examined the lease agreement and found it resulted in the payment of an amount over the lease term equal to, or greater than, the stated price of the goods. That is true of this case — the system cost Bentco less than $10,000 and could have been bought outright by Hill for $15,260.07, whereas the lease payments totaled $24,426.

Other factors discussed in Itek are present here. All risk of loss was on the lessee and remedies on default were those that would be available to a conditional seller: under the lease Bentco could declare the entire amount due, repossess the system, sell it and hold Hill liable for any deficiency. This lease also provided that if a sale of the property produced a surplus, it belonged to Hill. A provision which creates an equity in the goods in favor of the lessee is a significant consideration in determining whether the transaction is a sale or a lease. In re Tulsa Port Warehouse, 690 F.2d 809 (10th Cir. 1982); White & Summers, Uniform Commercial Code, § 22-3 (2d ed. 1980); Hillman, McDonnel, Nickles, Common Law and Equity under the UCC, § 18.05 [3][a] (1985).

In Itek the lessee had an option to buy the leased property for a nominal amount, which we regarded as having particular significance, as such a provision is seen by some authorities as decisive in deciding whether the transaction is a sale and not a true lease, “[F]or why would a bona fide lessor relinquish a valuable chattel for next to nothing?” Itek, supra. See Uniform Commercial Code, § 1-201(37); B. Clark, The Law of Secured Transactions Under the Uniform Commercial Code, § 1.5 [3] (1980); White & Summers, supra. But all factors must still be considered. Hillman, et al., supra, § 18.05(3)(a) (1985) atp. 18-43, n. 214, 217.

Here, while the lease itself contained no provision for purchase by Hill, a former employee of Bentco testified that he customarily told prospects, including Hill, that at the end of the lease the system could be purchased for one dollar. Moreover, Bentco’s president wrote Mr. Krayecki in November, 1982, evidently in the hope of obtaining Krayecki’s assumption of the lease, that at the end of the lease period he could either purchase the system for ten per cent of the purchase price or renew the lease from year to year for the payment of a single monthly payment each year.

Notwithstanding this proof that Bentco would have little interest in the property at the end of the lease, the trial judge found the agreement did not provide for the purchase of the property by Hill, nor did it contain any other terminology indicating how the lessee could obtain title to the system. And while that particular issue was disputed, we believe the only reasonable inference to be drawn from the testimony of the former employee, corroborated as it was by the letter to Krayecki, is that Bentco’s solution to the problems posed by the Itek decision was to simply omit the option provision from the written lease and give verbal assurance to its “lessees” that at the end of the lease an option to purchase for a nominal amount would be observed. Even if we could reach the same conclusion as the trial court with respect to an option to purchase, the absence of that is not conclusive in determining whether the transaction is a lease:

Drafting variants which have not impressed the courts are options to purchase before the price has been fully paid or arrangements under which there is no option to purchase at any time but where the aggregate rentals approximate the value (or purchase price) of the goods. Gilmore, Security Interests in Personal Property, (1965), Vol. 1, § 3.6.
The absence of an express transfer or option does not dispose of the question. As has been noted, ‘Since the parties to these transactions are often clever in their attempts to disguise a finance transaction as a true lease, ownership should be liberally defined.’ In Re Gehrke Enterprises, Inc., 1 BR 647 (WD Wis. 1979), citing DeKoven, Leases of Equipment: Puritan Leasing Co. v. August, 12 S.Fran.L. Rev. 1978.

See also B. Clark, The Law of Secured Transactions Under the Uniform Commercial Code, § 1.5 [3] (1985 Cumm. Supp.No. 3); White & Summers, supra; In Re Brookside Drug Store, Inc., 3 BR 120 (D. Conn. 1980); Leasing Service Corp. v. American National Bank & Trust, 19 UCC 252 (1976); In Re Peacock, 6 BR 922 (ND Tex. 1980).

It has been suggested that the “most fruitful single test” to distinguish a sale from a true lease is the absence of any appreciable residual in the lessor at the expiration of the lease. Coogan, Leases of Equipment and Some Other Unconventional Security Devices, 1 Bender’s Secured Transactions Under the Uniform Commercial Code, § 4A.07 at 4A-177. This is the net effect of a purchase option for a nominal sum, since exercising that option is the only prudent course for the lessee. See White & Summers, supra; B. Clark, The Law of Secured Transactions Under the Uniform Commercial Code, § 1.5 [3] (1980); Matter of Fashion Optical Ltd., 653 F.2d 1385 (10th Cir. 1981). Therefore, the lessor’s only interest in the goods at the end of the lease is the nominal amount of the purchase option.

There are other situations, however, where there is no provision for a purchase option by the lessee, and title never technically passes from the lessor to the lessee, but the lessor still has no expectation of a material interest in the property at the expiration of the lease term. The lessee in such cases is deemed to have become the owner of the property. “The lessor has parted with, and the lessee has acquired most of the risks and advantages of ownership.” Coogan, UCC Treatment of All Leases, 1 Bender’s Secured Transactions Under the UCC, § 4.3.03 at 4.3-10. Coogan lists those situations, some of which have relevance here: 1) The term of the lease equals or exceeds the expected economic life of the property so there is no reasonable expectation that the lessor will have anything significant at the end of the term; 2) the term may be less than the economic life expectancy, but the lessor’s known practice is not to bother with reclaiming the used goods; 3) the lease contains a provision whereby substantially all the risk of increase or decrease in value of the residual is borne by the lessee and the lessor retains no significant economic interest, as where the lessor is obligated to dispose of the property at the termination of the lease and the lessee is entitled to any surplus and bears any loss resulting from the disposition. See, B. Clark, The Law of Secured Transactions Under the Uniform Commercial Code, § 1.5[3] (1980); In Re Peacock, supra. See also, In Re Gehrke, supra; In Re Tulsa Port Warehouse Co., supra; Matter of Fashion Optical, Ltd., supra.

Weighing the three factors discussed by Coogan, supra, the third is inapplicable. Although the agreement contains a provision that upon the lessee’s termination of the lease the property may be sold with the surplus or deficiency going to the lessee, such a disposition is not obligatory on the part of the lessor under the terms of this contract. See, In Re Tulsa Port Warehouse, supra. The other two situations may well apply. It is conceivable that at the end of the lease this equipment would have little value or usefulness, in which case the residual available to Bentco would be, for all practical purposes, worthless. Given the limited value of the equipment at the end of the lease as we noted previously, evidenced by the letter from Bentco to Krayecki, we conclude there would be no appreciable residual in the goods at the end of five years and that the transaction was a sale and not a lease.

In this case, the difference in the price for which the system could have been purchased by Hill as opposed to the payments to be made under the “lease,” was patently usurious and the transaction was void. United Bilt Homes v. Elder, 272 Ark. 496, 615 S.W.2d 367 (1981); Textraon Inc. v. Whitner, 249 Ark. 57, 458 S.W.2d 367 (1970). The appellants pleaded and argued the usury defense in accordance with the Arkansas Constitution, Art. 19, § 13. On appeal, Bentco argues the federal override statute, 12 U.S.C. 86a, is applicable, but that was not argued below, nor was any objection made as to the ten percent rate being the applicable law. Any argument on appeal has been waived. Jackson v. Farm and Commercial Properties, 284 Ark. 130, 680 S.W.2d 105 (1984).

Reversed and dismissed.

Purtle, J., not participating.

       While these authorities are distinguishing leases from sales for the purpose of determining the applicability of Article Nine of the UCC, the principles employed in making that distinction are equally as useful in determining whether usury will be available as a defense in the action. See Bell v. Itek, 262 Ark. 22, 555 S.W.2d 1 (1977).


author: David Newbern, Justice. Darrell Hickman, Justice,

text:
    Glen Arlis McDANIEL v. STATE of Arkansas
    CR 85-144
    708 S.W.2d 613
    Supreme Court of Arkansas
    Opinion delivered April 28, 1986

      Morgan E. Welch; and Kenneth E. Suggs, for appellant.

      Steve Clark, Att’y Gen., by: Mary Beth Sudduth, Asst. Att’y Gen., for appellee.
   David Newbern, Justice.

This is an appeal from denial of post-conviction relief sought pursuant to Ark. R. Crim. P. 37. The appellant was, upon his plea of guilty, convicted of three counts of aggravated robbery and one count of failure to appear. His post-conviction petition alleged ineffective assistance of counsel and failure of the trial court to follow the provisions of Ark. R. Crim. P. 24.4,24.5,24.6, and 24.7 in accepting his guilty plea. We agree the trial court did not comply with Rules 24.4 and 24.6, and therefore we must reverse the refusal of post-conviction relief and order the appellant’s conviction set aside. We need not decide the issues presented in the ineffectiveness of counsel argument.

Rules 24.4 and 24.6 are as follows:

RULE 24.4
Advice by Court
The court shall not accept a plea of guilty or nolo contendere from a defendant without first addressing the defendant personally, informing him of and determining that he understands:
(a) the nature of the charge;
(b) the mandatory minimum sentence, if any, on the charge;
(c) the maximum possible sentence on the charge, including that possible from consecutive sentences;
(d) that if the offense charged is one for which a different or additional punishment is authorized because the defendant has previously been convicted of an offense or offenses one (1) or more times, the previous conviction or convictions may be established after the entry of his plea in the present action, thereby subjecting him to such different or additional punishment; and
(e) that if he pleads guilty or nolo contendere he waives his right to a trial by jury and the right to be confronted with the witnesses against him, except in capital cases where the death penalty is sought.
RULE 24.6
Determining Accuracy of Plea
The court shall not enter a judgment upon a plea of guilty or nolo contendere without making such inquiry as will establish that there is a factual basis for the plea.

At the post-conviction relief hearing the appellant presented as an exhibit a portion of the transcript of his trial depicting the colloquy among the court, the appellant and counsel with respect to his plea. The appellant was represented by Mr. Dickson, and the state by Mr. Bunch. The colloquy began as follows:

THE COURT: Is this on a change of plea? Is that correct?
MR. DICKSON: That is correct, your honor.
THE COURT: As to both cases?
MR. DICKSON: That is correct.
THE COURT: Have you discussed with Mr. McDaniel the nature of the charges? What the State has to prove to convict him of the, the various, the effects of a plea of guilty to these charges and the maximum and minimum penalties available by law?
MR. DICKSON: Yes, sir, indeed, in both cases, your honor.
THE COURT: All right, now Mr. McDaniel, Mr. Dickson can defend you in Court and he can advise you, but when it comes down to the matter of a plea of guilty that is up to you and you alone. Do you understand that?
MR. MCDANIEL: Yes, sir.
THE COURT: Are you offering a plea of guilty to the charge of aggravated robbery — class “A” felony, two different cases, of your own free will?
MR. MCDANIEL: Yes, sir.
THE COURT: Has anyone leaned on you to get you to plead guilty?
MR. MCDANIEL: No, sir.
THE COURT: Has anyone promised you whether I would accept your pleas or not?
MR. MCDANIEL: No, sir.
THE COURT: All right. Mr. Bunch, do you have an arrangement?

Thereafter, the prosecutor described the plea arrangement and the details of the allegations against the appellant. When asked if he had anything to say, the appellant’s counsel discussed with the court obtaining a delay of transfer to the Department of Correction sufficient to allow the appellant time to be married. The court next addressed the appellant as follows:

THE COURT: Now, Mr. McDaniel, did you read this plea recommendation before you signed it?
MR. MCDANIEL: Yes, sir, I did.
THE COURT: Do you have any questions about it?
MR. MCDANIEL: No, sir.
THE COURT: Also, the Defendant’s statement? Did you read it?
MR. MCDANIEL: Yes sir.
THE COURT: Did you sign it? Now, that’s concurrent with . . . what’s the number in Madison County?
MR. BUNCH: You honor that’s on the 79-51.
THE COURT: All right. I have noted Mr. McDaniel’s plea of guilty on both these cases and sentence him to fifty years in the Department of Corrections on each case, running concurrently, and also concurrently with the sentence in Madison County, CR-79-51. He will be given credit for 111 days jail time, and commitment will issue. Does that cover it?
MR. DICKSON: I think it does, your honor.
MR. BUNCH: Yes, your honor.

There was obviously no compliance with Rule 24.4, as none of the information required to be conveyed by the court to an accused was conveyed by “addressing the defendant personally.” Nor did the court establish a factual basis for the guilty plea. It is not enough that the prosecutor recite into the record the allegations against the accused. The court must ascertain from the accused whether he is pleading guilty because he believes he in fact is guilty. Atkins v. State, 287 Ark. 445, 701 S.W.2d 109 (1985).

We have held, and we continue to hold, that compliance with Rule 24 is mandatory. Reed v. State, 276 Ark. 318, 635 S. W.2d 472 (1982); Irons v. State, 267 Ark. 469, 591 S.W.2d 650 (1980). In Shipman v. State, 261 Ark. 559, 550 S.W.2d 454 (1977), we held that substantial compliance was sufficient. In that case the prosecutor stated the details of the crimes to the court, but our opinion points out:

The judge determined, by inquiring of appellant himself, that appellant knew that he was waiving his right to a jury trial, was voluntarily entering a guilty plea to the charges, and was in fact guilty and that he knew that the judge was not bound to accept the terms of the plea bargain.

Here there was no such substantial compliance, as the court did not inquire of the appellant whether he was in fact guilty. An inquiry by the court of the prosecutor whether there is a basis for the charge against the accused does not establish that there is a factual basis for the plea as required by Rule 24.6. That can only be done by the court asking the defendant if he did the things of which he stands accused and is pleading guilty because he is guilty.

The dissenting opinion focuses on whether the plea was voluntarily entered. It ignores the trial court’s failure to give the appellant the information required by Rule 24.4. As we pointed out in Atkins v. State, supra, the rule’s purpose is to inform the defendant’s ultimate decision to plead guilty. Given the court’s failure to comply with Rule 24.6, our decision need not turn on the question of substantial compliance, or lack of it, with Rule 24.4. However, it cannot hurt to restate our expectations and to emphasize how easy it would be for the court to comply fully with these rules by having them, or a simple checklist derived from them, before him when the plea is discussed.

The decision of the circuit court is reversed, and the case is remanded so that the conviction may be set aside in accordance with Rule 37.4.

Purtle, J., not participating.

Hickman and Hays, JJ., dissent.

Darrell Hickman, Justice,

dissenting. Because the trial judge did not technically comply with Rule 24 of the Rules of Criminal Procedure, this guilty plea is set aside. The most important question is not addressed and that is whether the plea was voluntarily entered. In determining whether this rule was complied with, we have always used the standard of substantial compliance, not technical compliance. Shipman v. State, 261 Ark. 559, 550 S.W.2d 454 (1977); Clark v. State, 271 Ark. 866, 611 S.W.2d 502 (1981). In the recent case of McFarland v. State, 284 Ark. 533, 684 S.W.2d 233 (1985), we refused to void a search because of a violation of the Rules of Criminal Procedure since neither prejudice nor constitutional violations were found.

The United States Supreme Court, on whose decisions the Rules of Criminal Procedure are based, has taken the same approach. In United States v. Timmreck, 441 U.S. 780 (1979), in which Rule 11 of the Federal Rules of Criminal Procedure was not strictly complied with, the court stated: “. . . Nor can any claim reasonably be made that the error here resulted in a ‘complete miscarriage of justice’ or in a proceeding ‘inconsistent with the rudimentary demands of fair procedure.’ As a basis for this reasoning, the Supreme Court quoted from two basic cases. In Hill v. United States, 368 U.S. 424, it was said:

The failure of a trial court to ask a defendant represented by an attorney whether he has anything to say before sentence is imposed is not of itself an error of the character or magnitude cognizable under a writ of habeas corpus. It is an error which is neither jurisdictional nor constitutional. It is not a fundamental defect which inherently results in a complete miscarriage of justice, nor an omission inconsistent with the rudimentary demands of fair procedure. It does not present ‘exceptional circumstances where the need for the remedy afforded by the writ of habeas corpus is apparent. . .’

In U.S. v. Smith, 440 F.2d 521, the court said:

Every inroad on the concept of finality undermines confidence in the integrity of our procedures; and, by increasing the volume of judicial work, inevitably delays and impairs the orderly administration of justice. The impact is greatest when new grounds for setting aside guilty pleas are approved because the vast majority of criminal convictions result from such pleas. Moreover, the concern that unfair procedures may have resulted in the conviction of an innocent defendant is only rarely raised by a petition to set aside a guilty plea.

McDaniel signed a comprehensive agreement to plead guilty which unquestionably shows to what charge he was pleading guilty, the range of possible sentence, and every detail required except the particular facts concerning these crimes. The prosecuting attorney supplied this information; it did not come from the mouth of the judge. Apparently for that reason alone this guilty plea is set aside. No consideration at all is given to whether the plea was voluntary. At the plea hearing the trial court asked McDaniel if he was entering a plea of guilty of his own free will. He answered yes. At the Rule 37 hearing, McDaniel was asked if he voluntarily entered the plea, and he answered that at that time it was voluntary.

Trial courts and appellate courts are inundated with petitions to set aside guilty pleas and jury verdicts. The most common grounds alleged in such cases are ineffective assistance of counsel and technical violations of the Rules of Criminal Procedure. Rarely is any question raised of the truth of the matter, which is the guilt or innocence of the defendant. It is understandable how two years after the fact, McDaniel forgets that he was forced to face on a given day the judge or the jury to answer for serious and violent criminal behavior. He chose to face the judge. Now he finds all sorts of reasons to set aside his guilty plea and sentence. The state and the victims will have to salvage what they can. Hopefully the state’s case will not be prejudiced by the passage of time; undoubtedly McDaniel will not be prejudiced.

Our role is not to blindly sit in judgment of trial courts and lawyers expecting perfection on form. Our role is to take the world as it is and see that defendants receive fair treatment which means substantial compliance, not perfect compliance, with the rules of procedure. The majority, in its zeal, has ignored the most important question which is: was the plea voluntary and was the defendant the victim of unfair procedures? I would affirm the trial judge’s findings.

Hays, J., joins.


author: David Newbern, Justice.

text:
    Rory D. MORRISON v. STATE of Arkansas
    CR 85-222
    707 S.W.2d 323
    Supreme Court of Arkansas
    Opinion delivered April 28, 1986

      Skaggs & Chase, by: Michael C. Chase, for appellant.

      Steve Clark, Att’y Gen., by: Joel O. Huggins, Asst. Att’y Gen., for appellee.
   David Newbern, Justice.

The appellant pleaded guilty to and was convicted of rape, nine counts of burglary, and eight counts of theft of property. The circuit judge who accepted the plea and entered the conviction later received a letter in which the appellant alleged his counsel told him that his sentences would be concurrent rather than consecutive and that this constituted “misrepresentation.” The judge treated the letter, which said it was a habeas corpus petition, as a petition for relief under Ark. R. Crim. P. 37 and denied it without a hearing. The only issue raised in this appeal is whether it was improper to deny relief without holding a hearing. We hold it was not improper, and thus we affirm.

Rule 37.3(a) provides:

If the motion and the files and records of the case conclusively show that the prisoner is entitled to no relief, the trial court shall make written findings to that effect, specifying any parts of the files or records that are relied upon to sustain the court’s findings.

Rule 37.3(c) provides that if the motion is not decided in accordance with subsection (a) a hearing shall be granted. The clear implication is that if the motion can be decided on the record no hearing is required. If the record does not show conclusively that the motion should be denied, a hearing must be held. Cusick v. State, 259 Ark. 720, 536 S.W.2d 119 (1976).

When the judge inspected the record in this case, he found a statement of the plea arrangement, signed by the appellant, his counsel and a deputy prosecutor providing clearly that the sentences of ten years for rape and twenty years for the other offenses were to run consecutively but concurrently with “any Missouri convictions.” In open court the deputy prosecutor said the Arkansas sentences were to run consecutively. The record shows the court took the sentencing recommendation under consideration for a week. When he announced his decision to accept the plea, he clearly stated the ten years for rape and the twenty years for the other offenses were to be served consecutively. The record thus clearly showed that the appellant was or should have been aware that his sentences were to run consecutively regardless of what his counsel might have told him.

The appellant relies on a garbled statement by his counsel, which appears in the record, which could be interpreted as showing his counsel understood the Arkansas sentences would run concurrently. In view of the clear showing that the appellant, the court, and the prosecution understood to the contrary we hold this record shows conclusively that the petition is without merit.

In addition, the petition is deficient as it does not state that the appellant would not have pleaded guilty but for the misrepresentations alleged. He has shown no prejudice. Hill v. State, 278 Ark. 194, 644 S.W.2d 282 (1983).

Although it was not argued in this appeal we note that the trial judge did not make specific reference to the parts of the record he relied on to deny the petition as required by the rule, and that is reversible error. Robinson v. State, 264 Ark. 186, 569 S.W.2d 662 (1978). However in Rawls v. State, 264 Ark. 954, 581 S.W.2d 311 (1979), we held that if the entire record conclusively shows that the petition was without merit we will affirm, even though the trial court failed to make written findings of fact specifying the parts of the record that were relied upon to sustain the denial.

It was not error for the trial judge to deny the petition without a hearing.

Affirmed.

Purtle, J., not participating.


author: Per Curiam.

text:
    Fabian COSTILLO v. John GOODSON, Judge
    CR 86-20
    707 S.W.2d 776
    Supreme Court of Arkansas
    Opinion delivered April 28, 1986
    Appellant, pro se.

    No brief filed by respondent.
   Per Curiam.

Petitioner was convicted on June 23, 1981 of aggravated robbery and sentenced to 75 years imprisonment. No appeal was taken. On June 19, 1984, petitioner filed in circuit court a pro se petition pursuant to Criminal Procedure Rule 37 which is still pending despite the elapse of almost two years. Petitioner has filed a petition for writ of mandamus with this Court, seeking an Order to compel the circuit judge to act on his petition.

The petition for writ of mandamus is granted. When our criminal case coordinator first contacted the circuit court about the pending petition, she was informed that the transcript was being prepared for the court to review. The delay in acting on the petition was attributed to problems with transcribing the record from a deceased court reporter’s file. In September, 1985, the trial judge informed the coordinator that the record had been completed and taken under review. The trial court responded to further inquiries in October, November and December, 1985, and January, 1986, that the record was still being reviewed. In mid-February, 1986, the court issued an order declaring Costillo indigent and providing him with a copy of the transcript. The order also indicated that at some point counsel had been appointed for Costillo. The prosecuting attorney was directed to turn over his files for counsel’s inspection, and counsel was directed to examine the prosecutor’s file and the transcript and request a hearing date as soon as his investigation was complete. As of the date of this opinion, the trial court has not notified this court that a hearing has been set.

Since it has been more than two years since the date the Rule 37 petition was filed and more than six months since the record was taken under review, we find that the trial court has had ample time to rule on the Rule 37 petition, or at the least, schedule a hearing. Therefore, the court is directed to hold a hearing on the petition within thirty days and issue an order within fourteen days thereafter.

Petition granted,

Purtle, J., not participating.


text:
    Bobby James ROBERTS v. STATE of Arkansas
    CR 86-4
    707 S.W.2d 324
    Supreme Court of Arkansas
    Opinion delivered April 28, 1986

      Appellant, pro se.

      Steve Clark, Att’y Gen., by: Theodore Holder, Asst. Att’y Gen., for appellee.
   Per Curiam.

In the motion before us Bobby James Roberts, a prison inmate who is proceeding pro se on appeal, requests permission to file a belated brief. The appeal is from an Order of the circuit court denying Roberts’ motion for transcript. Appellant contends that the delay in submitting his brief occurred because he did not have access to a typewriter, and, as a result, he had to send the brief to the attorney for inmates for typing.

The brief in question was typed when it was originally received, but it was not filed because it did not conform to the rules of this Court. Among the many deficiencies in the brief, it lacked a statement of the case, points for reversal and an abstract of the record. We hold all litigants to the abstracting requirements of Rule 9 of the Rules of the Arkansas Supreme Court and Court of Appeals, including those proceeding pro se. Bryant v. Lockhart, 288 Ark. 302, 705 S.W.2d 9 (1986). Appellant has not corrected the brief, but has merely submitted it again with the motion for permission to file it late.

Since the brief as submitted is grossly deficient, it could not be filed even if appellant had given a good reason for submitting it late. We have said that counsel will be appointed upon proper motion for the pro se appellant in a criminal case who is unable to produce an acceptable pro se brief. Green v. State, 277 Ark. 129, 639 S.W.2d 512 (1982). Appellant has not requested appointment of counsel and remains responsible for filing a suitable brief.

Motion denied.

Purtle, J., not participating.

       The content of the brief is of some concern as it pertains to a separate petition for postconviction relief which was also denied by the trial court, rather than the motion for transcript which is the actual subject of the instant appeal.


author: Jack Holt, Jr., Chief Justice.

text:
    Troy L. ADAMS & Mrs. L.L. ADAMS v. Dorothy Mayo PARKER & Roger Kelly MAYO
    85-301
    708 S.W.2d 617
    Supreme Court of Arkansas
    Opinion delivered May 5, 1986

      Pryor, Robinson & Barry, for appellant.

      Gean, Gean, & Gean, by: Lawrence W. Fitting, for appellee.
   Jack Holt, Jr., Chief Justice.

The appellant, Troy L. Adams, and the appellee, Roger Kelly Mayo, who were high school students at the time, were involved in a car accident in which both were injured. Mayo and his mother filed suit against Adams and his mother seeking $61,875 for loss of income, loss of a college scholarship, disability, medical expenses, pain and suffering, and property damage. The case was tried before a jury which returned a verdict in Mayo’s favor, fixing his damages at $200.00. The trial judge found there was an error in the assessment of damages and granted Mayo’s motion for a new trial. It is from that order that this appeal is brought. Our jurisdiction is pursuant to Sup. Ct. R. 29(l)(o). We affirm.

Arkansas R. Civ. P. Rule 59 provides that a new trial may be granted for “any of the following grounds materially affecting the substantial rights of such party:. . . (5) error in the assessment of the amount of recovery, whether too large or too small.”

Where a motion for new trial is granted, the test on review is whether the trial court abused its discretion. Ferrell v. Whittington, 271 Ark. 750, 610 S.W.2d 572 (1981). The trial judge is vested with great discretion in ruling on a motion for a new trial and will not be reversed unless there is a manifest abuse of that discretion. Roberts v. Simpson, 215 Ark. 181, 628 S.W.2d 308 (1982). We have held that a showing of abuse of discretion is more difficult when a new trial has been granted because there is less basis for a claim of prejudice by the beneficiary of the verdict which was set aside than by one who has unsuccessfully moved for a new trial. Roberts, supra.

Here, evidence was offered that Mayo’s medical bills alone totalled $2,854. From an examination of the record, we cannot say the trial court’s finding, that an award of $200 was too small, was a manifest abuse of discretion. Accordingly, we affirm the action of the trial judge in granting a new trial on that basis.

Affirmed.

Purtle, J., not participating.


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    Vera Joe DURHAM v. James M. DURHAM
    85-321
    708 S.W.2d 618
    Supreme Court of Arkansas
    Opinion delivered May 5, 1986

      Mike Rothman and Ben D. Rowland, Jr. of Rowland & Templeton, for appellant.

      Callahan, Crow, Bachelor, Lax & Newell, P.A., by: C. Burt Newell and George M. Callahan, for appellee.
   George Rose Smith, Justice.

This is a divorce case. The parties, both Arkansans, were married in Arkansas in 1971. He had entered the Marine Corps earlier that year. Their married life was spent at various military stations. One child, a daughter, was born in 1980. The couple separated in October, 1982, and Mrs. Durham filed this divorce action that December.

After a four-day trial, at which more than 15 witnesses testified, the chancellor granted a divorce to the wife on the ground of indignities and awarded her the custody of the child. Her appeal, lodged in this court under Rule 29(1 )(c), presents three primary issues relating to alimony or to the division of property.

The appellant first questions the chancellor’s refusal to award her an interest in whatever military pension Major Durham may be entitled to receive in the future. The marital status existed for 13 years, from 1971 until the divorce in December, 1984. The contention is that Mrs. Durham should be declared to have an interest in Durham’s pension in whatever ratio those 13 years bear to his total military service at the time he begins to receive a pension.

We agree with the chancellor. The proof is that Durham will not be entitled to a pension until he has served for at least 20 years. Until then, unlike the professor in Day v. Day, 281 Ark. 261, 663 S.W.2d 719 (1984), Major Durham has no vested right that must be recognized as marital property. He is employed by the United States; so Congress could at any time change his retirement plan or abolish it. Durham’s expectancy is more like the expectancy of termination pay that we considered in Lawyer v. Lawyer, 288 Ark. 128, 702 S.W.2d 790 (1986). The appellant relies upon the Uniformed Services Former Spouses’ Protection Act, 10 USCA § 1408 (1983), but that federal statute merely provides that the military authorities may treat a serviceman’s retirement pay as the property of him and his spouse in accordance with state law. No independent property right is created in the spouse by the federal act. In this instance no such right exists under Arkansas law.

Second, the chancellor held that a $13,500 money-market certificate that Mrs. Durham cashed during the pendency of the suit should be treated as having been marital property that was owned equally. She argues that the money used to purchase the certificate, or at least the greater part of it, was her separate property before the marriage; so the certificate should be declared to have been her property, in whole or in part.

The testimony of the parties about the source of the funds was in such conflict that the chancellor expressed his difficulty in making an equitable division. He noted that Durham’s proof indicated that Mrs. Durham owed him more than the amount of the certificate. Without attempting the seemingly impossible task of tracing all the funds that went into the certificate, the chancellor ended his discussion of the point by declaring that the certificate was marital property, to be divided equally.

We cannot say that his decision was clearly erroneous. The most important issue was that of credibility as between conflicting testimony, a matter upon which we must defer to the trial court’s judgment. Moreover, in two respects the appellant’s position is demonstrably unsound. One, she relies upon affidavits that were attached to a motion to amend the decree. The chancellor was justified in refusing to accept such inadmissible evidence, there being no showing that the asserted facts could not have been offered at the trial by testimony that would have been subject to cross examination. Two, the argument is made that since at one time a predecessor certificate of the one in issue had been payable to these two parties and to Mrs. Durham’s parents, as joint tenants with right of survivorship, Durham’s interest cannot exceed one fourth of the certificate. The flaw in this argument is that the owner of a certificate of deposit may direct the bank to add or remove other names as co-owners, but the real ownership does not change until the principal depositor surrenders the certificate or dies. “Due to the nature of a certificate of deposit and the law relating thereto, the purchaser has the right during his lifetime to change the certificate and cause it to be payable to different parties or even to cash it in.” Gibson v. Boling, 274 Ark. 53, 622 S.W.2d 180 (1981).

Third, the appellant argues that we should extend the chancellor’s allowance of alimony, which he fixed at $500 a month for six months. (There was also an allowance of child support of $350 a month.) The appellant, a school teacher, has a B.A. degree in education and taught school at the sixth-grade level for five years before her marriage. Her certificate as a teacher can be reinstated if she obtains six hours of credit and passes a test. She declines to resume teaching until her daughter, who was four years old at trial, starts to school. The child is now in kindergarten. The chancellor ruled that this mother is entitled only to alimony sufficient to enable her to renew her teaching certificate and go back to work. We find no reason to overrule the trial judge’s decision on this point.

The appellant’s fourth and fifth points were not raised below until after the decree had been entered; they require only a few words. The trial judge was justified in refusing to consider an income tax matter that could have been developed during the trial. Finally, it is insisted that Major Durham should be required to post a bond if he ever decides to take the child out of this country while he is exercising his visitation privileges. We agree with the chancellor’s observation that this issue is too speculative to require a decision at this stage of the case.

Affirmed.

Purtle and Hays, JJ., not participating.


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    Kenneth Marsh McGIRT v. STATE of Arkansas
    CR 86-60
    708 S.W.2d 620
    Supreme Court of Arkansas
    Opinion delivered May 5, 1986

      Thomas G. Montgomery, Crittenden County Public Defender, for appellant.

      Steve Clark, Att’y Gen., by: Joel O. Huggins, Asst. Att’y Gen., for appellee.
   Robert H. Dudley, Justice.

The appellant was found guilty of second degree forgery and sentenced as a habitual offender. We affirm.

On December 9, 1984, the appellant entered a Food 4 Less grocery store in West Memphis and placed $147.07 worth of groceries in his shopper’s cart. He pushed the cart to the checkout counter where the bill for the groceries was electronically processed by the checker, Leslie Wheeler. The appellant presented to Wheeler a salary check drawn on the Bluff City Service Company, Inc., a Memphis business, payable to appellant in the amount of $412.21. It was purportedly drawn by John P. Johnson. Before she would cash the check, Wheeler took the check and appellant’s driver’s license to the store manager for approval. The store manager, Dan Brown, recognized the similarity between the check and some other forged checks. He called the security guard, Gary Gitchell, and together they went to the check-out counter where appellant was waiting. They asked appellant to go with them to the store office, where appellant made various statements to the effect that he should not have attempted to pass the check. He attempted to escape from the office but was caught. It is undisputed that the check had been stolen from the Bluff City Service Company, Inc., that appellant had never worked for the company, that he was not due any salary, and that John P. Johnson was not authorized to draw checks on the company. At trial, the checker, the store manager, and the security guard positively identified appellant. The evidence of guilt was simply overwhelming. The jury found appellant guilty, but, in a bifurcated proceeding, was unable to reach agreement on punishment. The trial court sentenced appellant, as a habitual offender, to twenty years, with eight years suspended. The Court of Appeals certified the case to this Court for interpretation of a statute.

The appellant argues that the trial court erred by refusing to instruct the jury on the lesser included offense of criminal attempt to commit forgery. The trial court was correct. The overwhelming evidence shows that appellant possessed and attempted to pass, or passed, the stolen check. Forgery is defined in the relevant part as follows:

41-2302. Forgery — (1) A person forges a written instrument if with purpose to defraud, he draws,. . . possesses or utters any written instrument that purports to be or is calculated to become, or to represent if completed, the act of a person who did not authorize that act.
(3) A person commits forgery in the second degree if he forges a written instrument that is:
(a) a deed, will, codicil, contract, assignment, check, commercial instrument, credit card, or other written instrument that does or may evidence, create, transfer, terminate or otherwise aífect a legal right, interest, obligation or status; ....

(Emphasis added.)

“Utter” is defined in Ark. Stat. Ann. § 41-2301 (7) (Repl. 1977):

“Utter” means to transfer, pass, or deliver, or cause to be transferred, passed, or delivered to another person any written instrument, or to attempt to do so.

(Emphasis added.)

In Mayes v. State, 264 Ark. 283, 571 S.W.2d 420 (1978), we explained:

The crime of forgery is much broader in scope than under previous statutes and the crimes previously known as forgery and uttering, formerly held to be separate offenses, are now included under the broad category of “forgery.” Consequently, when the state charged appellant with forgery, the charge was broad enough to cover the crimes previously known as forgery, uttering and possession of a forged instrument. See Commentary, § 41-2302. Any of these acts constitutes the single crime of forgery. See State v. Morse, 38 Wash. 2d 927, 234 P.2d 478 (1951). Under the statute, one forges a written instrument if with purpose to defraud, he draws, makes, completes, counterfeits, possesses or utters a written instrument that purports to be or is calculated to become, or to represent if completed, the act of a person who did not authorize the act. Sec. 41-2302 (!)•
One commits forgery in the second degree if he forges a written instrument that is a check. He also commits forgery if he forges a written instrument that does or may evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation, or status. As we interpret the trial judge’s statements, he properly applied the statute and held that the evidence was not sufficient to show that appellant had drawn, máde, completed, altered or counterfeited the instrument presented, but that it did show that he had uttered it. The meaning of the word “utter” in the applicable section is broad enough to cover the delivery, or attempted delivery, of a written instrument to another person. Ark. Stat. Ann. § 41-2301 (Repl. 1977).

Here, the appellant possessed a check which purported to be drawn by a person who was not authorized to perform that act, and he passed or attempted to pass that check. The crime of forgery was complete upon his being in possession of the forged instrument, or upon his attempt to pass the check; or upon his passing of the check. Appellant was either guilty of forgery or nothing. It was not error to refuse to instruct the jury on a lesser included offense when the evidence clearly shows that the defendant is either guilty of the greater offense or innocent. Ark. Stat. Ann. § 41-105 (3) (Repl. 1977); Beed v. State, 271 Ark. 526, 609 S.W.2d 898 (1980).

Appellant next argues that the record is insufficient to support an extended term under the habitual offender statute. Appellant has three prior convictions in Tennessee, but contends they are not felonies under Arkansas law. His contention is premised upon Ark. Stat. Ann. § 43-2329 (Repl. 1977) which treated conviction of an offense in another jurisdiction as a felony only if the offense would have been a felony if committed in Arkansas. While that statute has not been repealed, we stated in Reeves v. State, 263 Ark. 227, 564 S.W.2d 503 (1978), that it was superseded by Ark. Stat. Ann. § 41-1002 (Repl. 1977). The appellant relies on our reference in Atkins v. State, 287 Ark. 445, 701 S.W.2d 109 (1985), to the old statute. That reference was incorrect and should have been to Ark. Stat. Ann. § 41-1002 (Repl. 1977), which treats conviction of an offense in another jurisdiction as a felony if the offense could result in imprisonment for a term in excess of one year in the foreign jurisdiction.

At trial, the evidence consisted of duly certified copies of the records of three judgments of conviction in the Criminal Court of Shelby County, Tennessee. Under Tennessee law, all three convictions were punishable by imprisonment of a term in excess of one year. The evidence was sufficient to support the extended term.

The trial court did not personally determine the number of prior felony convictions in accordance with Ark. Stat. Ann. § 41-1005 (2) (Supp. 1985), but instead, without objection, submitted the issue to the jury pursuant to ah earlier version of the statute. During their deliberation, the jury returned and advised the court that they were having difficulty in deterniining whether the Tennessee offenses were felonies. Among the court’s comments was the following: “In each case the judgment does provide at the bottom that the defendant is rendered infamous which is further evidence which you may consider in determining whether or not they are or are not felonies.” The appellant contends the comment violated Article 7, Section 23 of the Constitution of Arkansas as the statement was a comment by the trial judge on a factual matter. The comment is not cause for reversal.

First, appellant had no right to have a jury decide the issue. Ark. Stat. Ann. § 41-1005(2) (Supp. 1985). Therefore, the appellant cannot show any prejudice by a supposedly improper comment to the jury.

Second, the issue of the number of prior convictions is a matter of law, not a matter of fact. Shockley v. State, 282 Ark. 281, 668 S.W.2d 22 (1984). Since the matter was an issue of law, rather than fact, the constitutional prohibition against commenting on a factual issue does not apply.

During the penalty phase of the bifurcated trial, the jury reported that they had unanimously agreed that appellant was a habitual offender, but they were split ten to two on the penalty. The jury, at the time, had been in deliberation on the penalty phase of the trial for three hours and fifteen minutes. The following colloquy occurred:

THE COURT: Do you feel if given an additional period of time to deliberate that you would be able to reconcile or resolve that difference and reach an opinion? I see some shaking of the heads here so I gather you would not?
FOREMAN: We have been trying that and I don’t think we could.
THE COURT: I’m going to accept that.

The appellant contends that the court erred by refusing to give AMCI6004, the Allen charge, before taking the fixing of punishment away from the jury. We find no merit in the argument. Ark. Stat. Ann. § 4l-802(2)(c) (Repl. 1977) authorized the trial court to fix the punishment when the jury cannot agree on the punishment. Determining when the jury cannot agree is a matter over which the trial court has considerable discretion. The trial court did not abuse its discretion under the facts of the case.

The appellant’s last argument is that the trial judge did not give him credit for the time he spent in jail while awaiting trial. The trial court gave appellant 120 days credit for the time he spent in jail awaiting trial on this charge. See Ark. Stat. Ann. § 41-904 (Repl. 1977). He was not entitled to credit for time in jail for an unrelated charge. Boone v. State, 270 Ark. 83, 603 S.W.2d 410 (1980).

Affirmed.

Purtle, J., not participating.


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    SAFEWAY STORES, INC. v. Owen WILLMON
    86-3
    708 S.W.2d 623
    Supreme Court of Arkansas
    Opinion delivered May 5, 1986

      Laser, Sharp & Mayes, P.A., for appellant.

      Dodds, Kidd, Ryan & Moore, for appellee.
   Robert H. Dudley, Justice.

The appellee, the plaintiff below, was a customer in the Safeway Store in Malvern and, while pushing a shopping cart down an aisle, slipped on a liquid substance and fell. At trial, the court overruled appellant’s motions for a directed verdict, both at the close of the case-in-chief and at the close of all evidence. Appellant contends that the trial court erred in submitting the issue of negligence to the jury. The argument is well taken. We reverse and dismiss.

The law governing the liability of a store owner for injuries to a business invitee who slips and falls on a foreign substance on the premises is well settled. To establish liability of the store owner to the invitee, the invitee must prove that the presence of the foreign substance on the floor was the result of negligence on the part of the store owner, or that the substance had been on the floor for such a length of time that the storekeeper knew, or reasonably should have known, of its presence and failed to use ordinary care to remove it. The mere fact that a patron slips and falls in a store does not raise an inference of negligence. The doctrine of res ipsa loquitur is not applicable. Ledford v. Gas Mart Co., Inc., 259 Ark. 1, 531 S.W.2d 11 (1975).

Appellee slipped on a substance which was specifically identified as clear water by two of appellant’s employees who made an inspection of the liquid. The only evidence indicating the foreign substance might be something other than plain water was when the appellee testified that some unknown store employee told him it looked like soapy water.

None of the witnesses knew the origin of the water. Appellee called the store manager as his witness, and the manager speculated that it might have been brought from the water fountain at the rear of the store to the place of the spill, or that someone could have spilled a soft drink cup filled with ice. A store employee testified that he at first guessed it came from one of the one gallon plastic jugs of distilled water which was shelved nearby. However, inspection of the jugs showed that none of them leaked. There simply was no substantial evidence about how the water came to be on the floor. There was only sheer speculation and rank conjecture. There was no proof that the water was on the floor as the result of negligence on the part of the storekeeper.

Similarly, there was no proof that the water had been on the floor for such a length of time that the storekeeper knew, or should have known of its presence and failed to use ordinary care to remove it. Appellant’s records show that the aisle where the fall occurred had been swept an hour and fifteen minutes before the fall. Employees had been up and down the aisle in the interval between the time of sweeping and the time of the fall. There was no evidence that any employee knew of the spill or reasonably should have known of it. There was only evidence that if an employee had been working at the checkout counter at the end of the aisle, that employee would have been within fifteen feet of the spill.

Possible causes of a fall, as opposed to probable causes, do not constitute substantial evidence of negligence.

Reversed and dismissed.

Purtle, J., not participating.


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    Ronnie Lee BIRCHETT v. STATE of Arkansas
    CR 85-210
    708 S.W.2d 625
    Supreme Court of Arkansas
    Opinion delivered May 5, 1986

      William C. McArthur, was appellant.

      Steve Clark, Att’y Gen., by: Joel O. Huggins, Asst. Att’y Gen., for appellee.
   Steele Hays, Justice.

On the evening of August 13,1984 a man wearing a nylon stocking mask and carrying an automatic pistol entered a trailer owned by Thurl Harper where Harper and his employee, Gary Don Mason, were watching television. They were robbed of $2,300 in cash, wrist watches and a masonic ring containing a large diamond, and were struck several times with the pistol when they were slow to obey orders. When nearby employees responded to Harper’s cries for help, the robber fired at them as he fled to a waiting automobile.

Harper’s own investigation led to the name of Ronnie Birchett and Harper gave that information to the police. When Harper and Mason were shown a photograph of Birchett they identified him as the gunman. In trial they were positive Ronnie Birchett was the man who robbed them. Birchett was convicted of aggravated robbery, theft of property, aggravated assault and felon in possession of firearms. He appeals from a sentence of thirty-four years.

Appellant’s main argument is the trial court erred in allowing the state to call a witness in rebuttal whose name had not been given the defense under a discovery motion. Appellant urges that the witness was not a proper rebuttal witness. We sustain the argument.

When the state rested its case, based largely on the identification by the victims, Birchett took the stand in his own behalf. On cross-examination the prosecution elicited denials from Birchett that he had discussed the robbery with a former girlfriend, Pamela Goodrich, or that he had shown her a watch and ring taken in the robbery. In rebuttal the state called Pamela Goodrich to testify that Birchett had told her about the robbery, had given her $300 from the money and had shown her a watch and diamond ring matching the description of items taken from Harper. Appellant objected to this witness as not being a proper rebuttal witness and because her name had not been given the defense as requested under A.R.Cr.P. Rule 17.1. The prosecutor’s argument that Goodrich was a rebuttal witness and therefore not subject to discovery was sustained by the court.

The prosecutor’s contention that he did not know about Pamela Goodrich until the morning of trial is of no great importance. The police had had a statement from Pamela Goodrich for perhaps a month prior to trial, and the statement may even have been taken by a deputy prosecutor. In any event, under our cases the knowledge by the police that Pamela Goodrich had material information about the crime is imputed to the prosecutor’s office. Lewis v. State, 286 Ark. 372, 688 S.W.2d 269 (1985); Dupree v. State, 271 Ark. 50, 607 S.W.2d 356 (1980). The issue then is whether the trial court was correct in finding Goodrich to have been a rebuttal witness and, as such, not subject to disclosure under discovery.

If a witness is proper for the state’s case in chief, the prosecution is required to notify the defendant of the name and address of that witness upon timely request. A.R.Cr.P. 17.1 (a)(i). If a witness is a genuine rebuttal witness there is no such requirement. Parker v. State, 268 Ark. 441, 597 S.W.2d 586 (1980).

While we have said it is in the sound discretion of the trial court to allow rebuttal testimony which might have been properly introduced in the state’s case in chief, Kellensworth v. State, 275 Ark. 252, 631 S.W.2d 1 (1982); Pointer v. State, 248 Ark. 710, 454 S.W.2d 91 (1970); Bobo v. State, 179 Ark. 207, 14 S.W.2d 1115 (1929); Adams v. State, 173 Ark. 713, 293 S.W. 19 (1927), we have an additional consideration before us when we take into account the requirements of Rule 17.1. If the witness is not a true rebuttal witness, the prosecution must comply with Rule 17.1 by notifying the defense that such witness will be called.

It is evident Pamela Goodrich was not a true rebuttal witness. Her testimony was not merely in response to evidence presented by the defense. See Parker, supra. Rather, this appears to be an instance of a witness who could have been presented in the state’s case in chief being withheld until rebuttal. Her testimony impeached responses drawn from the appellant during his cross-examination. The questions asked of appellant during cross seem clearly designed to manufacture a rebuttal situation for a presentation of the state’s evidence that belonged in its case in chief — evidence that was not genuinely in response to anything presented by appellant in his defense. Under these circumstances, the witness should not have been granted rebuttal status. While we do not intend by this opinion to abrogate the discretion of the trial court in deciding whether the testimony is rebuttal testimony, that discretion can not be exercised so as to undermine the purposes of Rule 17.1, which is to give the defendant adequate notice of the witnesses to be called against him in the state’s efforts to present its case.

A similar situation was addressed in State v. Manus, 93 N.M. 95, 597 P.2d 280 (1979). The court first held that a true rebuttal witness did not come within the requirement of witness notification to the defendant. The court went on to discuss the issue of what was “true rebuttal” testimony.

Genuine rebuttal evidence is not simply a reiteration of evidence in chief but consists of evidence offered in reply to new matters. The plaintiff, therefore, is not allowed to withhold substantial evidence supporting any of the issues which it has the burden of proving in its case in chief merely in order to present this evidence cumulatively at the end of defendant’s case. Ascertaining whether the rebuttal evidence is in reply to new matters established by the defense, however, is a difficult matter at times. Frequently true rebuttal evidence will, in some degree, overlap or coalesce with the evidence in chief. Therefore, the question of admissibility of evidence on rebuttal rests largely on the trial court’s discretion. Citing, State v. White, 74 Wash.2d 386, 444 P.2d 661 (1968).

The appellant in Manus was faced with the same situation as this appellant. The prosecution had elicited responses from him during cross-examination on two seemingly irrelevant questions. The state then brought in a surprise witness for rebuttal, to impeach the appellant’s responses. The witness’s testimony was not truly in rebuttal of anything the appellant had presented in his defense, and this witness too should have been presented in the state’s case in chief. The court noted:

A criminal trial, like its civil counterpart, is a quest for truth. That quest will more often be successful if both sides have an equal opportunity to interview the persons who have the information from which the truth may be determined. The current tendency in the criminal law is in the direction of discovery of the facts before trial and elimination of surprise at trial. Gregory v. United States, 125 U.S.App.D.C. 140, 369 F.2d 185 (1966). . .In a criminal case, the district attorney should not hesitate to show his entire file to the defendant. It is not the primary duty of the district attorney to convict a defendant. It is his primary duty to see that the defendant has a fair trial, that justice be done.

We note that if the state had unexpectedly found itself with a witness for its case in chief after it had rested, the court could have granted a motion to allow the state to re-open its case and present new evidence. Ark. Stat. Ann. § 43-2114; Lacy v. State, 240 Ark. 84, 398 S.W.2d 508 (1966). The defense could then make the proper requests for the opportunity to meet the exigencies of the surprise witness. See, Lewis v. State, supra.

This case is distinguishable from Vasquez v. State, 287 Ark. 468, 702 S.W.2d 411 (1985). In Vasquez, the nature of the rebuttal witness’s testimony may well have precluded the state from calling her for its case in chief, on grounds of relevancy, until after the defense had presented its case. Here, the state clearly could have called the witness in its case in chief. The status of the witness in Vasquez was borderline and properly left to the discretion of the trial court.

Another point of error concerns an allegation of prosecutorial misconduct, claiming that at some point in the trial, a deputy prosecutor silently mouthed a phrase prejudicial to the defense. A motion for a mistrial was denied by the court with the comment that he had not seen nor heard the act complained of. The argument is rendered moot by this reversal and could not be expected to occur again.

Appellant also claims the evidence was insufficient to support the verdict. Although we reverse and remand this case on another issue, we must still review appellant’s challenge to the sufficiency question, and in doing so we disregard other trial errors. See Harris v. State, 284 Ark. 247, 681 S.W.2d 334 (1984); Maples v. State, 16 Ark. App. 175 (1985). In reviewing the sufficiency we view the evidence in the light most favorable to the appellee and affirm if there is any substantial evidence to support the verdict. The state presented two eyewitness victims of the crime who positively identified appellant. Additionally, Pamela Goodrich corroborated the testimony of the two victims. This evidence is of sufficient force and character to compel a reasonable mind to reach a conclusion and pass beyond suspicion or conjecture. Glisson v. State, 286 Ark. 329, 692 S.W.2d 227 (1985) .

Reversed and remanded.

Purtle, J., not participating.