Parkin Printing & Stationery Co. v. Arkansas Printing & Lithographing Co.
| Decision Date | 26 February 1962 |
| Docket Number | No. 5-2692,5-2692 |
| Citation | 234 Ark. 697,354 S.W.2d 560 |
| Parties | PARKIN PRINTING AND STATIONERY COMPANY et al., Appellants, v. ARKANSAS PRINTING AND LITHOGRAPHING COMPANY et al., Appellees. |
| Court | Arkansas Supreme Court |
Mehaffy, Smith & Williams, by Pat Mehaffy, Herschel H. Friday, Jr., and Robert V. Light, Little Rock, for appellants.
Spitzberg, Mitchell & Hays, by H. Maurice Mitchell and Allan W. Horne, Little Rock, for appellees.
This litigation concerns Article 19, Section 15, of our Arkansas Constitution, which reads:
1
At the outset, we identify some of the persons and companies whose names appear herein:
(a) Appellant Parkin Printing & Stationery Company (hereinafter called 'Parkin Company') is an Arkansas corporation engaged in the printing and stationery business. Parkin Company is a family corporation, with 2226 shares of capital stock outstanding, of which amount Harry W. Parkin (President of the corporation) owns 980 shares, and the remaining shares are owned by Mr. Parkin's sister, brother-in-law, mother, and wife; and that stock situation has existed since January, 1957.
(b) Harry W. Parkin is, and has been since 1957, a member (and now Chairman) of the State Highway Commission of Arkansas, having been appointed and confirmed for a 10-year term in accordance with Amendment #42 to the Arkansas Constitution, which is the organic law creating the State Highway Commission.
(c) Cross-appellees are the Governor, Secretary of State, State Treasurer, and State Auditor.
(d) The appellee Arkansas Printing & Lithographing Company (hereinafter called 'Arkansas Printing Company') is an Arkansas corporation engaged in the printing and stationery business in competition to Parkin Company.
(e) The Arkansas Stationery & Furniture Company is a subsidiary corporation wholly owned by the Arkansas Printing Company and will sometimes be referred to under that name.
(f) Keith J. Arthur is an individual taxpayer and citizen of the State of Arkansas.
In accordance with § 14-301 et seq. Ark.Stats., the Secretary of State duly advertised for bids on contracts of printing and supplies for the biennium beginning July 1, 1961 and ending June 30, 1963. Several scores of separate contracts were to be awarded. Parkin Company was the low bidder on fifteen of the contracts, 2 which were awarded to it on July 11, 1961, with all legal requirements observed, i. e., the signing of the contracts and the approval by the designated State Officials. The performance bonds of the Parkin Company on the fifteen contracts were signed by Harry W. Parkin as guarantor.
On November 24, 1961, Arkansas Printing Company and its subsidiary company, and Keith J. Arthur, as a citizen and taxpayer, filed this suit in the Pulaski Chancery Court against Parkin Company and the four State Officials, alleging that all of the fifteen contracts awarded Parkin Company '* * * are void as contracts on behalf of the State of Arkansas because they are in violation of the Constitution of the State of Arkansas. Harry W. Parkin is and was at all times mentioned herein the president and a principal stockholder of the defendant Parkin Printing & Stationery Co. Said Harry W. Parkin is also a member and the chairman of the Arkansas State Highway Commission. Under Amendment No. 42 to the Constitution of the State of Arkansas, said Highway Commission is 'vested with all the powers and duties now or hereafter imposed by law for the administration of the State Highway Department, together with all powers necessary or proper to enable the commission or any of its officers or employees to carry out fully and effectively the regulations and laws relating to the State Highway Department.' As chairman of said commission, Harry W. Parkin is the highest ranking member and officer of the State Highway Department, a department of the government of the State of Arkansas. Section 15 of Article 19 of the Constitution of the State of Arkansas provides in part 'No member or officer of any department of the government shall in any way be interested in such contracts * * *.''
The four State Officials, appearing by the Attorney General, filed a general denial. The Parkin Company, after admitting some allegations as to the status of officials, denied all other material allegations of the complaint. Upon issues joined, the cause was heard by the Chancery Court on evidence ore tenus and resulted in a decree finding and declaring the said fifteen contracts awarded the Parkin Company to be void as in violation of Article 19, Section 15, of the Constitution. From that decree Parkin Company has appealed, urging two points. 3 There is also a cross-appeal: the Arkansas Printing Company alleged that its subsidiary was the next lowest bidder on Contract #40 awarded to Parkin Company and prayed that the State Officials be required to award Contract #40 to Arkansas Stationery & Furniture Company as the next low bidder. Such relief was refused, and from that portion of the decree the Arkansas Printing Company and its subsidiary have cross-appealed. 4
As we stated at the outset, this opinion requires a study of Article 19, Section 15, of the Arkansas Constitution, which section consists of two sentences. The first sentence identifies certain items for contract letting. These are stationery, printing, fuel, binding, furnishing and repairing the halls and rooms of the General Assembly, etc. As to the contracts on these items identified in sentence one, there is this clear prohibition in sentence two: 'No member or officer of any department of the government shall in any way be interested in such contracts * * *.' Just why the framers of the Constitution selected the items in sentence number one is of no concern. The fact remains that the Constitution named these items definitely and clearly and there is no denial that all of the fifteen contracts awarded to Parkin Company contain items specified in sentence number one. The defensen of Parkin Company is that sentence number two does not apply to Harry W. Parkin for the reasons hereinafter to be considered.
The fact that the Parkin Company which received the fifteen contracts is a corporation and a separate entity from Harry W. Parkin, the individual who is a member of the Highway Commission, is a distinction of no consequence, and is not even relied upon by Parkin Company in this case. Our holding in Peoples Savings Bank v. Big Rock Stone & Const. Co., 81 Ark. 599, 99 S.W. 836, eliminates any such 'separate entity' defense. In the cited case, Mr. Lenon as Mayor of Little Rock was President of the Board of Public Affairs which let paving contracts and determined performance thereof; and Mr. Lenon was also a stockholder and President of the Peoples Bank. Torbert held a contract from the City of Little Rock for paving, and in obtaining a loan from Peoples Bank, Torbert made an assignment of his claim against the City on the contract. In deciding the case, Judge Riddick said:
'The only question in this case is whether it is against public policy to permit a bank of which the mayor of a city is a stockholder and president to take an assignment of the claim of a contractor against the city for the price of work which he has performed for the city, and which work must be inspected and accepted for the city by a board of which the mayor is chairman.'
And the question was answered by the Court in this language:
5
With all the above explanation, we come to the insistence of Parkin Company that Harry W. Parkin is not a member or officer of 'any department of the government' as those words were understood and meant in the Constitution. Parkin Company points out that in Article 4, Section 1, the Constitution provides:
'The powers of the government of the State of Arkansas shall be divided into three distinct departments, each of them to be confided to a separate body of magistracy, to wit: Those which are legislative to one, those which are executive to another, and those which are judicial to another';
that Article 5, Section 1, describes the legislative; 6 that Article 6, Section 1, describes the executive; 7 and that Article 7, Section 1, describes the judicial department. 8 The appellant insists that the State Highway Commission is not in any of these three departments of government and so Harry W. Parkin is not a member of 'any department of the government.'
We cannot agree with appellant in this very adroit argument which, if accepted, would permit the Legislature...
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