Case Title: Oldner v. Villines

Citation: 

Docket Number: 

State: arkansas

Court: Arkansas Supreme Court

Date: 1997-04-28T00:00:00Z

Document:
Michael A. OLDNER v. The Honorable F.G.
VILLINES, III, County Judge of Pulaski
County; Arkansas Quorum Court Members, Bart
Moreland, Sidney Newcomb, Tom Alexander, John
Pagan, Sr., Wilandra Dean, James L. Wise,
Robert Keltner, Annette McCaleb, Mary L.
Williams, Johnnie Lee Mass, Lawrence Goddard,
Dianne Hudson, Harold Fortson, Charles F.
Roberson, John Hall; County Treasurer, Pat
Tedford; and State of Arkansas

96-372                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
                Opinion delivered April 28, 1997


1.   Motions -- motion to dismiss -- trial court's considerations. -- When
     considering an ARCP Rule 12(b)(6) motion to dismiss, the trial
     court must treat the facts as true and view them in the light
     most favorable to the party who filed the complaint; the trial
     court must not look beyond the complaint unless the court
     treats the motion as one for summary judgment; moreover, the
     court must not lend consideration to factual conclusions
     reached through the arguments of counsel and exhibits nor base
     its decision on allegations contained in briefs and exhibits.

2.   Motions -- order treated as dismissal under ARCP Rule 12(b)(6). -- Where,
     although the chancellor's final order stated that she reviewed
     the record and considered the briefs and arguments of counsel
     in reaching her decision, it was clear that she conducted the
     hearing as an ARCP Rule 12(b)(6) hearing, noting more than
     once that the allegations of fact in the amended complaint
     were to be taken as true; where a Rule 12(b)(6) decision was
     also evident on the face of the order; and where the
     chancellor specifically declined to hear a laches argument
     because she believed the topic more appropriate for a hearing
     on summary judgment because it was a "factual issue," the
     supreme court treated the order as a dismissal under Rule
     12(b)(6).

3.   Constitutional law -- interpretation of Arkansas Constitution. -- When
     the language of the constitution is plain and unambiguous,
     each word must be given its plain, obvious, and common
     meaning.

4.   Taxation -- local tax not valid unless levied by proper local authorities.
     -- A local tax is not valid unless it is levied by the proper
     local authorities. 

5.   Constitutional law -- powers of government -- delegation of taxing
     authority to municipal corporations. -- Under Ark. Const. art. 2, 
     23, the framers of the constitution expressly conceded to the
     State the right to tax its citizens through the General
     Assembly; in turn, the General Assembly has within its power
     the ability to delegate taxing authority to municipal
     corporations; when a municipal corporation acts within its
     delegated taxing authority, its ordinance is the equivalent of
     an Act of the General Assembly.

6.   Municipal corporations -- counties long recognized as. -- Counties have
     long been recognized as municipal corporations.

7.   Municipal corporations -- holding in earlier case concerning
     inapplicability of Ark. Const. art. 16,  11, to municipal corporations
     overruled by subsequent cases. --  Although the supreme court held
     in Shepherd v. Little Rock, 183 Ark. 244, 35 S.W.2d 361
     (1931), that Ark. Const. art. 16,  11, which provides that
     every law imposing a tax must state the object distinctly and
     that no moneys arising from a tax levied for one purpose may
     be used for any other purpose, had no application to municipal
     corporations, the case had been overruled by implication
     where, in subsequent cases, the supreme court discussed the
     applicability of article 16,  11, to municipal corporations. 

8.   Taxation -- tax enacted without stated purpose -- resulting revenues may
     be used for general purposes. -- When a tax is enacted by the
     General Assembly or approved by a vote of the people without
     the statement of a purpose, the resulting revenues may be used
     for general purposes.

9.   Taxation -- failure to state object for tax does not constitute illegal
     exaction -- cause of action for illegal exaction not stated -- dismissal
     affirmed. -- The supreme court held that the failure to state an
     object for a one percent sales tax in and of itself did not
     constitute an illegal exaction under Ark. Const. art. 16, 
     11 and 13; it is the use of tax revenues for an unauthorized
     purpose that does; where the object of the tax was not stated,
     the tax funds could be used for general purposes and were not
     limited to a specific purpose; because appellant's facts did
     not state a cause of action for illegal exaction under article
     16,  11 and 13, the supreme court affirmed the dismissal of
     his complaint by the chancellor.


     Appeal from Pulaski Chancery Court; Ellen B. Brantley,
Chancellor; affirmed.
     Nichols, Wolff, Ledbetter & Campbell, by: H. Gregory Campbell
and Mark W. Nichols, for appellant.
     Pulaski County Attorney's Office, by: Nelwyn Davis and Stephen
Cobb, for appellees.

     Robert L. Brown, Justice.
     This appeal raises the question of whether a one percent sales
tax approved by the voters of Pulaski County in 1982 failed to
comply with Article 16,  11, of the Arkansas Constitution and,
thus, constituted an illegal exaction.  In particular, the
plaintiff/appellant in the matter, Michael A. Oldner, complained
that the ballot form violated the Arkansas Constitution by not
informing the voters of Pulaski County of the "purpose" of the tax. 
The chancellor dismissed the matter on the basis that Article 16,
 11, does not require the purpose of the tax to be stated in the
ballot or county ordinance calling for the election when the sales
tax is to be used for general purposes.  We affirm the dismissal by
the chancellor.
     Appellant Oldner is a resident and taxpayer in Pulaski County. 
On July 7, 1995, Oldner filed an amended complaint against the
Pulaski County Judge, the members of the Pulaski County Quorum
Court, and the State of Arkansas (the appellees) and asserted that
a one percent sales tax levied against the residents of Pulaski
County in 1982 constituted an illegal exaction in that the ballot
did not state the object of the tax as required by Ark. Const. art.
16,  11.  Furthermore, he asserted that the ballot did not inform
voters that cities in Pulaski County would be receiving a per
capita share of the tax revenues collected.  The ballot form for
the 1982 election, as taken from Pulaski County Ordinance No. 81-
OR-71, which called the sales tax election, read as follows:
     "FOR ADOPTION OF A ONE PERCENT (1%) SALES TAX WITHIN
     PULASKI COUNTY"
     "AGAINST ADOPTION OF A ONE PERCENT (1%) SALES TAX WITHIN
     PULASKI COUNTY"
The ballot form is precisely the form authorized by Act 991 of
1981, now codified at Ark. Code Ann.  26-74-301 to -314 (1987 and
Supp. 1995).  Oldner had previously moved for class certification.
     The State answered the amended complaint and denied that the
ballot did not state the object of the tax or that the sales tax
constituted an illegal exaction.  The State affirmatively pled
failure to set forth facts upon which relief can be granted.  The
county officials moved to dismiss the amended complaint and
Oldner's motion for class certification.  The county officials
asserted that the sales tax was a lawful delegation to the counties
of the State's power to tax and, thus, was not a county tax.  The
county officials further asserted grounds for dismissal based on
res judicata, collateral estoppel, laches, and failure to state
facts upon which relief can be granted.  Oldner countered in his
response that the ballot form violated the Arkansas Constitution by
not stating the object of the tax and denied that the doctrines of
res judicata and collateral estoppel applied.  Oldner attached to
his brief in support of his response Pulaski County Ordinance No.
81-OR-71 (calling for the sales tax election) and an election
ballot from Miller County, which he contended did comply with
constitutional mandates.  The county officials answered Oldner's
response by stating that the ballot for the sales tax at issue had
complied with Act 991 of 1981, which authorized counties to levy a
one percent sales tax for general purposes.
     Oldner next moved for summary judgment, again for the reason
that the ballot failed to set forth the object of the tax and,
therefore, was unconstitutional.  He attached Pulaski County
Ordinance No. 81-OR-71 (calling for the sales tax election),
Pulaski County Ordinance No. 82-OR-12 (levying the one percent
sales tax following the election), and the Miller County election
ballot.  He also attached the allocation of the sales tax proceeds
to municipalities in Pulaski County.
     A hearing was held on the various motions.  The county
officials urged the chancellor that if the sales tax was to raise
revenues for general usage, that purpose did not have to be stated
in the ballot.  According to county officials, only if the tax was
for a specific purpose did that purpose have to be identified under
the Arkansas Constitution.  Oldner responded that a purpose,
whether general or specific, was required to be stated in the
ballot.  The chancellor granted the motion to dismiss filed by the
county officials, which was joined by the State, and her order of
dismissal read in pertinent part:
     After reviewing the record, considering the briefs of
     counsel, and hearing oral argument on the pending motion,
     the Court finds, adjudges, and orders as follows:
          1.   This case is not barred by res judicata.
          2.   [Defendants'] consolidated motion to dismiss is
     granted for failure to state facts upon (sic) relief can
     be granted.
          3.   Article 16  11 of the Arkansas Constitution
     does not require the purpose of the sales tax to be
     stated in the ballot or Ordinance No. 81-OR-71 where the
     sales tax is to be used for general purposes.  Only where
     the sales tax is to be used for other than general
     purposes does Article 16  11 require the ballot and
     ordinance to state the purpose or intended use of the
     tax.
          4.   Distribution of tax proceeds to political
     subdivisions other than the levying body need not be
     stated in the ballot or ordinance No. 81-OR-71 where the
     sales tax is to be used for the general purposes of that
     political subdivision.

                      I. Order of Dismissal
     The sole issue on appeal is whether the chancellor erred in
dismissing Oldner's complaint under Ark. R. Civ. P. 12(b)(6).  We
first must consider whether the chancellor's order was in fact a
12(b)(6) dismissal or a grant of summary judgment.  When
considering a Rule 12(b)(6) motion, the trial court must treat the
facts as true and view them in the light most favorable to the
party who filed the complaint.  Little Rock Cleaning Systems, Inc.
v. Weiss, 326 Ark. 1007, 935 S.W.2d 268 (1996); Neal v. Wilson, 316
Ark. 588,