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Roach v. Oaklawn Jockey Club, Inc.
Citations: 225 Ark. 381; 282 S.W.2d 814; 1955 Ark. LEXIS 600Docket: 5-797
Court: Supreme Court of Arkansas; October 17, 1955; Arkansas; State Supreme Court
On May 11, 1955, the appellee initiated a lawsuit against the Arkansas State Racing Commission in Pulaski Chancery Court to permanently prevent the commission from opening bids for a horse racing franchise in Garland County, due by May 16, 1955. The appellee sought a temporary restraining order to protect its existing franchise rights. The court granted the temporary injunction, which was later made permanent when the commission's motion to dissolve it was overruled. The court confirmed that the appellee held a valid franchise effective April 13, 1954, for ten years, originally granted on May 14, 1945. In March 1954, the commission advertised for bids for a new ten-year franchise starting May 14, 1955. The appellee submitted the highest bid of $100, leading to the franchise being awarded to it in April 1954. The current commission claimed the previous franchise was void due to lack of authority and public policy concerns. Consequently, they sought new bids in April 1955, receiving three sealed bids that remain unopened due to the injunction. The appellee has operated a horse racing track in Hot Springs since 1935 and has contributed over $9 million in revenue taxes to the state, including $864,107.81 in 1955 alone. It invested over $300,000 in improvements since obtaining the 1954 franchise, asserting that these investments were justifiable only with the secure franchise. The relevant legal framework is governed by Act 46 of the Acts of 1935, as amended. Section 9 of the Act stipulates that only one exclusive franchise for operating a race track may be granted per county, with a duration of ten years from the acceptance of a successful bid by the Commission. The Commission is permitted to invite bids only in counties lacking an existing exclusive franchise. The franchise awarded to the appellee on April 13, 1954, intended to commence on May 14, 1955, is deemed void due to the violation of the exclusivity provision, as it would create an additional franchise in a county where one already exists. The law mandates that a franchise begins immediately upon acceptance of the bid, and awarding a future-starting franchise exceeds the Commission's authority. Additionally, the principle of estoppel cannot legitimize an unauthorized act by a state agency. Consequently, the trial court's injunction was incorrectly granted, leading to a reversal and dismissal of the case.