Title: Masterson v. State

State: arkansas

Issuer: Arkansas Supreme Court

Document:

Donna M. MASTERSON and DG's Shiloh Two, Inc.
v. STATE of Arkansas ex rel. Winston Bryant,
Attorney General

96-1064                                            ___ S.W.2d ___

                    Supreme Court of Arkansas
                 Opinion delivered July 14, 1997


1.   Equity -- chancellor generally has no criminal jurisdiction --
     exception to general rule that equity will not enjoin
     commission of crime when remedy at law is adequate. --
     Generally, a chancellor has no criminal jurisdiction; except
     in narrow circumstances, equity will not enjoin the commission
     of a crime because the remedy at law is adequate; however,
     there are circumstances where both criminal and equitable
     relief are appropriate; if grounds for equity jurisdiction
     exist in a given case, the fact that the act to be enjoined is
     incidentally violative of a criminal enactment will not
     preclude equity's action to enjoin it.

2.   Equity -- public nuisance -- equity has authority to abate. --
     Equity has authority to abate a public nuisance; the
     legislature has not conferred this jurisdiction upon the
     chancery court; they have always had jurisdiction.

3.   Equity -- act both public nuisance and crime -- when
     injunction is warranted. -- Where the act is both a public
     nuisance and a crime, the state may suppress it by a suit in
     equity, or resort to a criminal prosecution, or may do both;
     to warrant an injunction where the nuisance is also a crime,
     there must be proof of what that law denominates a nuisance as
     distinguished from a mere crime.

4.   Equity -- gambling house nuisance under common law -- when
     equity may act to suppress. -- A gambling house is a public
     nuisance under common law; the Attorney General has the power
     and duty under common law to institute equitable proceedings
     to enjoin the nuisance; equity may act to suppress a public
     nuisance, even though the maintenance of the nuisance is a
     crime, where there is alleged in addition to the public
     nuisance some facts that show that the remedy at law, by
     prosecution of the criminal, is inadequate and incomplete to
     effect relief.

5.   Appeal & error -- chancery ruling -- supreme court will not
     reverse unless clearly erroneous. -- The supreme court will
     not reverse the findings and conclusions of a chancery court
     unless they are clearly erroneous.

6.   Equity -- chancellor's conclusions not clearly erroneous --
     chancellor had subject-matter jurisdiction. -- The stipulation
     of facts, considered together with the principles reviewed by
     the supreme court, supported the chancery court's conclusions
     of law; the supreme court found that the chancellor's holdings
     were not clearly erroneous and agreed with the chancery
     court's conclusion of law that the chancery court, as a court
     of equity, had jurisdiction to abate a public nuisance; the
     chancery court had subject-matter jurisdiction.

7.   Equity -- injunctions for otherwise criminal acts may be
     issued where property interests are involved -- protection of
     property rights of public affected by illegal gambling
     activities meets test for relief. -- Ordinarily equity does
     not enjoin the commission of crimes, but it does issue such
     injunctions where property interests are involved; the
     protection of property rights of the public affected by
     illegal gambling activities meets the test for equitable
     relief; if the public nuisance is one touching civil property
     rights or privileges of the public, or the public health is
     affected by a physical nuisance, or if any other ground of
     equity jurisdiction exists calling for an injunction, a
     chancery court will enjoin, notwithstanding the act enjoined
     may also be a crime.

8.   Taxation -- taxation of bingo operations in no way connected
     to whether operation is nuisance -- statute provides only for
     taxation of bingo revenues. -- Appellants' argument that
     because the State is taxing its bingo operations, those
     operations cannot be considered a nuisance was without merit;
     the tax instituted under Ark. Code Ann.  26-52-1501--1507
     (Supp. 1995) and the requirement for annual registration are
     not intended to address any question of legality or illegality
     of the conduct of playing bingo; the statute only provides for
     taxation of bingo revenues; there is no question that playing
     bingo for money constitutes gambling, which is a statutory
     criminal offense. 

9.   Equity -- commercial bingo hall is common-law public nuisance
     -- equity may act to suppress public nuisance where remedy at
     law is inadequate and incomplete. -- The operation of a
     commercial bingo hall meets the definitions of a gambling
     house, and is therefore a common-law public nuisance; where it
     was stipulated that the operation of the bingo halls had been
     profitable enough to make necessary the payment of taxes on
     gross receipts and that appellants intended to continue the
     activities, thereby showing that the operation of the gambling
     houses had resulted in losses to the public patrons of money;
     and where it was stipulated that no prosecution had been
     initiated against those operations by anyone, notwithstanding
     the open, continuous, and lucrative operation of the public
     nuisance, there was support for the chancery court's
     conclusion that there was no adequate remedy at law; equity
     may act to suppress a public nuisance where the remedy at law
     is inadequate and incomplete.

     Appeal from Washington Chancery Court; John Lineberger,
Chancellor; affirmed.
     Everett Law Firm, by: William B. Putman, and Mashburn &
Taylor, by: Timothy L. Brooks, for appellants.
     Winston Bryant, Att'y Gen., by:  James DePriest, Senior Asst.
Att'y Gen., for appellees.

     Ray Thornton, Justice.   
     Donna M. Masterson owns and controls DG's Shiloh Two, Inc. 
Both are appellants in this action.  Between January 1993 and
August 1996, DG's Shiloh Two owned, and Donna Masterson managed,
two bingo halls located in Springdale, Arkansas.  In January, 1993,
the State of Arkansas ex rel. Winston Bryant, Attorney General,
appellee, filed a complaint in the chancery court of Washington
County against appellants alleging that the bingo operations
constituted public nuisances and seeking an order to abate and
enjoin such activities.  Other operators of bingo halls were named
but were dismissed when they discontinued their bingo operations. 
Appellants continued to operate their bingo halls and agreed with
appellee to submit the matter to the chancery court upon stipulated
facts. 
     Appellants argued that appellee failed to allege irreparable
harm as a basis for injunctive relief, and urged that the adoption
by the state of Ark. Code Ann.  26-52-1501--1507 (Supp. 1995),
which taxes gross receipts from bingo operations, under which
appellants remitted $316,266.00 in taxes to the state, supports
appellants' contention that the bingo halls are not public
nuisances.  Appellants also argued that the chancery court lacked
subject-matter jurisdiction.
     On August 12, 1996, the chancery court entered a decree
abating the bingo activities as a public nuisance and enjoining the
appellants from continuing such activities.  On appeal, appellants
assert that the chancery court erred in finding that their bingo
operations constituted a public nuisance, and further contend that
the court lacked subject-matter jurisdiction to conclude that bingo
is a lottery or to abate and enjoin such activity.  Finally,
appellants argue that the court erred in not granting their motion
for summary judgment.  We have considered each assignment of error
and have determined that the trial court should be affirmed.  This
resolves any issue concerning summary judgment.

          Subject-Matter Jurisdiction of Chancery Court
     Appellants correctly state the general rule that a chancellor
has no criminal jurisdiction.  State v. Vaughan, 81 Ark 117, 98 S.W. 685 (1906).  Further, it is correct that "except in narrow
circumstances . . . equity will not enjoin the commission of a
crime because the remedy at law is adequate."  Bates v. Bates, 303
Ark 89, 93,