Town of Houston, Arkansas; and Carl G. Hillis, Agent for Petitioners v. Anna Carden et al.

TOWN OF HOUSTON, Arkansas; and Carl G.
Hillis, Agent for Petitioners v. 
Anna CARDEN et al.

97-715                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
                Opinion delivered March 19, 1998


1.   Municipal corporations -- annexation -- burden of proof. -- The burden
     of proof in an action to prevent annexation is placed on the
     remonstrants to prove that the area should not be annexed.

2.   Municipal corporations -- annexation -- burden of proof not impermissibly
     shifted. -- Where appellee clearly had the burden of proof and
     put on her case first relating to the effect of the annexation
     on appellant town, the highest and best use of the annexed
     area, and a scheme to stop her hog farm; where one of her
     witnesses, the mayor of appellant town, addressed the issue of
     whether the land was needed for any municipal purpose; and
     where the circuit court's letter opinion and order addressed
     this proof and found in appellee's favor, the supreme court
     was convinced, regardless of how the court couched its
     findings, that the burden of proof was not impermissibly
     shifted to appellants.

3.   Municipal corporations -- annexation -- five criteria. -- The five
     criteria used to justify annexation are as follows: (1)
     whether the property is platted and held for sale or use as
     municipal lots; (2) whether platted or not, if the lands are
     held to be sold as suburban property; (3) whether the lands
     furnish the abode for a densely settled community or represent
     the actual growth of the municipality beyond its legal
     boundary; (4) whether the lands are needed for any proper
     municipal purposes such as for the extension of needed police
     regulation; and (5) whether the lands are valuable by reason
     of their adaptability for prospective municipal uses.

4.   Municipal corporations -- annexation -- five criteria disjunctive. -- The
     five criteria for annexation should be considered in the
     disjunctive; an annexation is proper if any one of the five
     factors is met. 

5.   Municipal corporations -- annexation -- five criteria applicable whether
     proceeding brought by city or landowners. -- The five criteria for
     annexation apply regardless of whether the annexation
     proceeding was initiated by the city or by adjoining
     landowners. 

6.   Municipal corporations -- annexation -- void if part of area does not meet
     one of five criteria. -- If a part of a proposed area does not
     meet one of the five requirements, the annexation of the
     entire area is void in toto.

7.   Municipal corporations -- annexation -- agricultural and horticultural
     lands. -- Agricultural and horticultural lands are not to be
     annexed when their highest and best use is for agricultural or
     horticultural purposes.

8.   Municipal corporations -- annexation -- action to prevent -- independent
     attack authorized by statute. -- An action to prevent annexation
     such as that brought by appellees is not an appeal of the
     county court's order; rather, it is an independent attack on
     the annexation authorized under Ark. Code Ann.  14-40-604
     (1987).

9.   Municipal corporations -- annexation -- standard of review. -- In
     annexation cases, the supreme court places a high degree of
     reliance upon the findings of the trial judge and does not
     reverse unless they are clearly erroneous; the court views the
     evidence in the light most favorable to the appellee.

10.  Municipal corporations -- annexation -- trial court did not clearly err in
     finding contemplated benefits to town slim or nonexistent. -- Where
     there was very little, if any, credible testimony to the
     effect that appellant town itself would be benefited by
     annexing the property in question, and where there was no
     credible proof that the town required additional space for
     businesses or residences or that security was a problem,
     although the prospective benefits to proponents living in the
     area to be annexed seemed fairly clear, the supreme court did
     not believe the circuit court clearly erred in finding that
     the contemplated benefits to appellant town were slim or even
     nonexistent.

11.  Municipal corporations -- annexation -- appellee proved appellant town had
     no real need for additional acres or persons. -- Appellee successfully
     proved that appellant town, which consisted of 640 acres and
     approximately 175 persons, had no real need for an additional
     900 acres and 110 persons; the supreme court noted that
     appellant town did not need to annex 900 acres for the purpose
     of placing a fire station in that area; that crime was not a
     factor; and that increased revenue from matching funds due to
     110 new citizens that could be used for street lights in
     appellant town seemed very tenuous.

12.  Municipal corporations -- annexation -- health considerations proper. --
     Health considerations are proper in annexation decisions.

13.  Municipal corporations -- annexation -- health considerations -- annexation
     of entire acreage not necessary under police power. -- Regardless of
     the interest of appellant town in preventing foul odors
     emanating from a hog farm, the supreme court held that the
     circuit court correctly concluded that that purpose alone
     could not be the sole reason for upholding the annexation of
     900 acres; appellee's land, on which the purported hog-farm
     nuisance was to be located, comprised only 91 of the 900
     acres; therefore, the remaining acreage was not necessary for
     annexation under the exercise of a police power, even assuming
     that preventing noxious odors was a legitimate health reason
     for the annexation.

14.  Municipal corporations -- annexation -- circuit court's decision annulling
     supported by substantial evidence. -- The supreme court affirmed on
     the twin bases that the circuit court did not shift the burden
     of proof and that its findings were not clearly erroneous;
     that being the case, the circuit court's decision was
     supported by substantial evidence.


     Perry Circuit Court; John Ward, Judge; affirmed.
     James F. Goodhart, P.A., for appellants.
     McMillan, Turner, McCorkle & Curry, by: Ed McCorkle, for
appellees.

     Robert L. Brown, Justice.
     On June 23, 1995, appellant Carl G. Hillis and numerous other
landowners petitioned the Perry County Court that 900 acres of land
lying west of the Town of Houston be annexed into the town pursuant
to Ark. Code Ann.  14-40-601 (1987).  The Perry County Court found
that the petition was "right and proper" under Ark. Code Ann.  14-
40-603(a) (1987), and ordered the annexation.
     Appellees Anna Carden and other landowners, who live within
the annexed area (Carden) filed an action in circuit court against
the Town of Houston (Town) and Hillis to prevent the annexation. 
Carden had received a permit to operate a hog farm in the annexed
area, and under a Houston ordinance, she could not do so.  At the
ensuing trial, witnesses testified and evidence was received,
following which the trial court entered an order annulling the
annexation.  The court specifically found that none of the five
factors announced in Vestal v. Little Rock, 54 Ark. 321, 15 S.W. 891 (1891) had been satisfied.
     At trial, Carden presented evidence on why the annexation
should be annulled and called Jerry Lawson, Mayor of Houston.  The
mayor testified that the Town was one square mile, or 640 acres, in
size and that the population was approximately 175 persons.  He
testified that the Town did not have a water treatment plant or
sewer system and that it received its water by pipeline from the
nearby town of Perryville.  He admitted that while some of the
residents who lived on the periphery of the proposed annexation
received water from Houston, others used well water, and that
Perryville had restricted the Town's ability to add new customers. 
Mayor Lawson also testified that Houston had a volunteer fire
department that included members who lived outside of the Town and
that service was provided to out-of-town residents.  He stated that
the Town lacked a street department and equipment but that the Town
had reached an agreement with the county judge for the maintenance
of portions of a county road located within the proposed
annexation.
     Mayor Lawson admitted that Houston lacked a planning
commission, other than the Town council, and that it did not
provide for garbage pickup.  He admitted that the population of the
Town had decreased in the last twenty or thirty years and that the
Town only had three businesses: a general store, an automobile-
repair station, and a realty company.  He testified that only three
to five buildings had been built in the Town the last five years
and that no building permits were in existence for the proposed
annexation.  Although he testified that he heard that persons had
land for sale in the proposed annexation, he stated that he knew of
no person who was platting land into blocks and lots.
     Mayor Lawson described Ordinance No. 95-1, which was passed on
December 14, 1995.  He testified that that Ordinance was the only
ordinance in effect in the Town and that it prevented commercial
livestock operations from conducting business within the Town
limits.  In connection with the ordinance, he admitted that he
"heard a lot of talk" about Carden, who lived within the proposed
annexation and who had received permission from the Arkansas
Department of Pollution Control and Ecology (Department) to operate
a hog farm.  He maintained that Carden's activities were not the
reason for the ordinance, but he admitted that he wrote to the
Department and requested that it revoke her permit.  The request
was denied.
     Mayor Lawson also told the circuit court that the Town had
been considering annexation for at least four years in order to
receive population-based matching-fund money and to improve its
fire department by locating a pumper fire truck and fire house
within the proposed annexation.  He also believed that the proposed
annexation would lead to better security, possibly in the form of
a marshall; better lighting; better roads; and city water due to
the possibility that the Town would expend money to provide these
services.
     He further explained that Ordinance No. 95-1 was an exercise
of the Town's police power to prevent nuisances from occurring
within the Town's limits.  He agreed that the ordinance was passed,
in part, due to noxious odors from a separate hog farm located to
the east of town.  In apparent contradiction of his testimony on
direct examination, he explained that the population of Houston had
grown in the last five to ten years with the construction of
several new homes.  He explained that if the Town had increased
revenues, it would be more likely to spend money to provide water
service to the annexed land.
     Carden next testified that she owned 91 acres of land located
within the proposed annexation that she used for raising cattle. 
She stated that she received her hog-farm permit on December 30,
1995.  She related that although a hearing was held on her permit
before the Department where appellant Carl Hillis and others
testified in opposition, no appeal was sought by them after she was
awarded the permit.  In her opinion, the purpose of the annexation
was to stop the operation of her proposed hog farm.
     Carden then described the area to be annexed.  She testified
that the vast majority of the 900 acres was pasture and timber,
with homes located on several parcels of land, and a greenhouse and
a "New Beginnings" ministry on others.  She testified that she was
not aware of the operation of any businesses within the proposed
annexation and that she did not know of any land for sale or land
being platted for subdivisions.  Carden also stated that no roads
extended throughout the proposed annexation.
     Appellee Toby Davis, who owned approximately 45 acres within
the proposed annexation, testified that he raised beef cattle on
his property.  He stated that he had hoped to operate one or two
chicken houses, but that now he could not do so as a result of
Ordinance No. 95-1.  He added that prior to the annexation, Hillis
contacted him about supporting the annexation and told him: "[W]e
need to pull together to stop hog farms."  It was clear from his
conversation that Hillis was referring to Carden.  He testified
that there were no roads crossing through the proposed annexation
and that he was not aware of any property being for sale.
     The Town and Hillis then put on their case.  Hillis, who owned
80.5 acres within the annexation, explained that landowners owning
27 parcels of land within the 900-acre proposed annexation joined
him in his petition for the annexation.  Hillis reiterated that the
reasons behind the annexation were better fire and police
protection, water, and street lights.  He believed that he and
other landowners would eventually develop portions of their land
into a subdivision once the area was annexed and "absolutely"
agreed that Carden's plans to operate a hog farm played a role in
the annexation because he believed it was the only way to address
such a nuisance.  He stated that he was well aware of the problems
caused by hog farms because the noxious odors from the Brook Hog
Farm, which was located east of Houston, were generally experienced
throughout the community.
     Hillis also testified about the use of the land in the
proposed annexation.  He stated that no people within the area were
engaged in row-crop farming because of the quality of the land,
which, he opined, was not suited for that farming activity.  Much
of the land, he said, was pasture, and timber was raised on only
one plot.  He did admit on cross-examination that he and other
landowners used their pastures to raise cows and that numerous
landowners held property that contained standing timber.  He
testified that most of the land was used for residential purposes
and that there was a "New Beginnings" ministry, a church, a
greenhouse, and a printing business in the affected area.  He also
admitted that he and other appellants were members of Citizens
United Against the Proliferation of Hog Farms, which was engaged in
various lawsuits throughout the state to prevent the establishment
of hog farms.
     Other proponents of the annexation living in the area
testified that the best use of the area was not agricultural and
that the hog farm would depreciate the value of their property and
cripple their ability to enjoy the outdoors.  They further claimed
that improved Town services for them was a definite factor in favor
of annexation.
     The circuit court issued a letter opinion and subsequent order
in which he annulled the annexation and found that the area in
question did not meet any of the Vestal criteria.  See Vestal v.
Little Rock, supra.  The circuit court specifically found:
         There was no evidence the town needed the annexed land
          for any proper town purpose like extension of streets,
          sewer, gas, or water.
         There was no evidence the town needed the area for
          business purposes.
         There was no evidence of crime in the town or surrounding
          areas.
         There was no evidence that the annexed land had a higher
          or better use for municipal purposes.
         Prevention of a hog farm is not a prong for annexation
          and stopping foul odors is not a reason for proper
          annexation of property.
     The Town and Hillis contend on appeal that the circuit court
erred in its decision for two reasons: (1) the court improperly
shifted the burden of proof to the proponents of the annexation,
and (2) the court's findings were not supported by substantial
evidence.  We first consider the issue of the burden of proof.
     The burden of proof in an action to prevent annexation is
placed on the remonstrants to prove that the area should not be
annexed.  Gay v. City of Springdale, 298 Ark. 554, 769 S.W.2d 740
(1989) (Gay II); Chastain v. Davis, supra; City of Crossett v.
Anthony, 250 Ark. 660, 466 S.W.2d 481 (1971).  See generally Morton
Gitelman, Changing Boundaries of Municipal Corporations in
Arkansas, 20 Ark. L. Rev. 135 (1966).  For their argument that the
circuit court improperly placed the burden of proof on them, the
Town and Hillis point initially to the circuit court's statements
in its order: (1) there was "no testimony" the proposed property
was needed for street purposes; (2) there was "no evidence" that
Houston needed the annexed property for any town purpose, such as
for streets or a sewer, gas, or water system; (3) there was no
evidence that the town's people needed the space for business
purposes; (4) there was no proof Houston needed to extend its
police regulations because there was "no evidence" of any crime,
inside or outside the city; and (5) there was "no evidence" that
the agricultural land within the proposed annexation had a "higher
or better use for municipal purposes."
     In response, Carden contends that the circuit court merely
performed its task under Ark. Code Ann.  14-40-604(a)(2)(A), which
provides in part that if the court is satisfied the requirements
for annexation have not been complied with, the court "shall" make
an order restraining any further action pertaining to the
annexation order of the county court and annulling it.  According
to Carden, the circuit court was merely summarizing the evidence
submitted on whether the annexation satisfied the requirements of
Vestal v. Little Rock, supra.
     The appellants' argument is without merit.  Carden clearly had
the burden of proof, and she put on her case first relating to the
effect of the annexation on Houston, the highest and best use of
the annexed area, and the scheme to stop her hog farm.  One of her
witnesses was the mayor of the Town, Jerry Lawson, who addressed
the issue of whether the land was needed for any municipal purpose. 
The circuit court's letter opinion and order addressed this proof
and found in Carden's favor.  Regardless of how the court couched
its findings, we are convinced that the burden of proof was not
impermissibly shifted to the Town and Hillis.
     We turn next to the merits of the case.  The five Vestal
criteria used to justify annexation by adjoining landowners which
were alluded to by the circuit court are as follows:
          (1) Whether the property is platted and held for
     sale or use as municipal lots;
          (2) Whether platted or not, if the lands are held to
     be sold as suburban property;
          (3) Whether the lands furnish the abode for a
     densely settled community or represent the actual growth
     of the municipality beyond its legal boundary;
          (4) Whether the lands are needed for any proper
     municipal purposes such as for the extension of needed
     police regulation; and
          (5) Whether the lands are valuable by reason of
     their adaptability for prospective municipal uses.
See also Ark. Code Ann.  14-40-603(a) (1987) (requiring that the
prayer of the petitioner for annexation be "right and proper").
     We have stated that these five criteria should be considered
in the disjunctive, and an annexation is proper if any one of the
five factors is met.  Gay II, supra; Lee v. City of Pine Bluff, 289
Ark. 204, 710 S.W.2d 205 (1986); Gay v. City of Springdale, 287
Ark. 55, 696 S.W.2d 723 (1985), reh'g denied, 287 Ark. 58-A, 698 S.W.2d 300 (1985)(Gay I).  The criteria apply regardless of whether
the annexation proceeding was initiated by the city or by adjoining
landowners.  Chastain v. Davis, 294 Ark. 134, 741 S.W.2d 632
(1987); Louallen v. Miller, 229 Ark. 679, 317 S.W.2d 710 (1958);
Cantrell v. Vaughn, 228 Ark. 202, 306 S.W.2d 863 (1957).  If a part
of the proposed area does not meet one of the five requirements,
the annexation of the entire area is void in toto.  Gay II, supra;
Chastain v. Davis, supra; Chappell v. City of Russellville, 288
Ark. 261, 704 S.W.2d 166 (1986).  Furthermore, agricultural and
horticultural lands are not to be annexed when their highest and
best use is for agricultural or horticultural purposes.  Chappell
v. City of Russellville, supra; Louallen v. Miller, supra.
     An action to prevent annexation such as that brought by Carden
is not an appeal of the county court's order.  Rather, it is an
independent attack on the annexation authorized under Ark. Code
Ann.  16-40-604 (1987).  Re: Proposed Annexation to Town of Beaver
v. Ratliff, 282 Ark. 516, 669 S.W.2d 467 (1984); Britton v. City of
Conway, 38 Ark. App. 232, 821 S.W.2d 65 (1991).  In annexation
cases, this court places a high degree of reliance upon the
findings of the trial judge and does not reverse unless they are
clearly erroneous.  Gay II, supra; Lewis v. City of Bryant, 291
Ark. 566, 726 S.W.2d 672 (1987).  Furthermore, this court views the
evidence in the light most favorable to the appellee.  Id.
     The circuit court was correct in being skeptical about the
propriety of this annexation.  There is very little, if any,
credible testimony to the effect that the Town itself would be
benefited by annexing this property.  For example, Mayor Lawson
testified that the Town would be improved because it would receive
additional matching-fund money due to the population increase of
approximately 110 people, but he focused primarily on the benefits
to the area to be annexed in terms of better security, roads, and
fire protection rather than the benefit to the Town.  While Hillis
testified that the additional land would allow the Town to employ
a marshall and expand, there was no credible proof that the Town
required additional space for businesses or residences or that
security was a problem.  Thus, while the prospective benefits to
Hillis and the other proponents living in the area to be annexed
seem fairly clear, we do not believe the circuit court clearly
erred in finding that the contemplated benefits to the Town were
indeed slim or even non-existing.
     It is, of course, undisputed that predominantly agricultural
land may be annexed if it can be made to serve a municipal purpose
and its highest and best use is not agricultural.  But we, again,
question whether there is a viable municipal purpose for the land
under the Vestal criteria.  Moreover, the cases cited by the Town
and Hillis are distinguishable.  For example, in Chappell v. City
of Russellville, supra, we affirmed the circuit court's order
upholding the annexation of 4,150 acres of land, some of which was
woodland, swampland, and farmland.  In doing so, we focused on the
fact that the mere presence of farmland, when its highest and best
use is not for agricultural purposes, will not prevent annexation
and that swampland and wooded areas may also pass muster for
annexation when the value of the land is derived from its actual
and prospective use for city purposes.  Chappell v. City of
Russellville, 288 Ark. at 262-63, 704 S.W.2d  at 167, citing Holmes
v. City of Little Rock, 285 Ark. 296, 686 S.W.2d 425 (1985).
     In Chappell, the circuit court also found specifically that
(1) much of the lands to be annexed represented the actual growth
of the city beyond its legal boundary; (2) the lands were needed
for extension of police and fire protection for city residents; (3)
the lands were valuable by reason of their adaptability for
prospective municipal purposes; and (4) that the highest and best
use of the land was for purposes other than agriculture.
     In sum, the Chappell case is wholly different from the case at
bar, where it is difficult to ascertain any benefit to the Town to
be gained by annexing the 900 acres under the Vestal criteria.  See
also Lee v. City of Pine Bluff, 289 Ark. at 209, 710 S.W.2d  at 208
(affirming annexation of a flood plain as part of an "honest
effort" to encompass the growth of the city, but cautioning: "That
does not mean we will recognize annexation proposals that are
essentially land grabs[.]"); Gay I (involving a "land grab" by the
city).  Stated simply, Carden successfully proved that Houston, a
town of 640 acres and approximately 175 persons, has no real need
for an additional 900 acres and 110 persons.  Certainly, Houston
does not need to annex 900 acres for the purpose of placing a fire
station in that area.  Crime is not a factor.  And increased
revenue from matching funds due to 110 new citizens which can be
used for street lights in Houston seems very tenuous.
     There is the remaining issue of Houston's exercise of its
police power to stop the hog farm.  Testimony at trial clearly
established that the prevention of commercial hog farms from
operating in the area was a primary reason for the annexation.  In
the past, this court has indicated that health considerations are
proper.  See, e.g., City of Little Rock v. Findley, 224 Ark. 305,
272 S.W.2d 823 (1954) (affirming trial court's order nullifying
annexation under substantial-evidence test but acknowledging that
arguments relative to curing health and sanitation problems were
"persuasive"); Walker v. City of Pine Bluff, 214 Ark. 127, 214 S.W.2d 510 (1948) (affirming circuit court's annexation order under
substantial-evidence test and including evidence that the proposed
area was a "health menace").  The question for us to decide is
whether the Town's police power is broad enough to thwart the foul
odors emanating from a hog farm which is at issue in this case. 
See, e.g., Springfield v. City of Little Rock, 226 Ark. 462, 290 S.W.2d 620 (1956) (involving the city's authority to raze sixteen
housing units that were unsanitary and dangerous to public health
due to disrepair); Gus Blass D. G. Co. v. Reinman, 102 Ark. 287,
143 S.W. 1087 (1912) (involving the city's authority to abate the
operation of a livery stable).
     Regardless of the interest of the Town in preventing foul
odors, we hold that the circuit court correctly concluded that that
purpose alone cannot be the sole reason for upholding the
annexation of 900 acres.  As has already been emphasized, if a part
of the annexation does not meet one of the Vestal requirements,
then annexation of the entire area is void in toto.  See Gay II,
supra; Chastain v. Davis, supra; Chappell v. City of Russellville,
supra.  Carden's land, on which the purported hog-farm nuisance is
to be located, comprises only 91 of the 900 acres.  Therefore, the
remaining 809 or so acres are not necessary for annexation under
the exercise of a police power, even assuming that preventing
noxious odors was a legitimate health reason for the annexation.
     We affirm on the twin bases that the circuit court did not
shift the burden of proof in this case and the findings of the
court are not clearly erroneous.  This being the case, the circuit
court's decision is supported by substantial evidence.  See
Chastain v. Davis, supra.
     Affirmed.