Judges: WINSTON BRYANT, Attorney General
Filed Date: 7/29/1998
Status: Precedential
Modified Date: 7/5/2016
The Honorable Chris Raff Prosecuting Attorney Seventeenth-East Judicial District 411 North Spruce Street Searcy, AR 72143
Dear Mr. Raff:
This is in response to your request for an opinion concerning A.C.A. §
Is a prosecution for theft of leased, rented or entrusted personal property pursuant to Arkansas Code
5-36-115 valid when the underlying contract provides that upon completion of the "rental or lease" payments the renter shall own the subject property?
A conclusive answer to your question will depend upon whether the underlying contract is a true lease or a conditional sales contract. It is, however, my opinion that if the underlying contract is a conditional sales contract, then A.C.A. §
Arkansas Code Annotated §
(a) Any person is guilty of theft and subject to the punishments prescribed by §
5-36-103 who shall intentionally, fraudulently, or by false pretense take, carry, lead, drive away, destroy, sell, secrete, convert, or appropriate in any wrongful manner any personal property which is leased, rented, or entrusted to the person, or reports falsely of his wealth or mercantile credit and thereby fraudulently obtains possession of that personal property.
The requirement that the personal property in question be leased, rented, or entrusted is an element of the crime. See Cox-Hilstrom v.State,
(c) It shall be prima facie evidence of intent to commit theft when one who has leased or rented the personal property of another fails to return or make arrangements acceptable with the lessor to return the personal property to its owner within five (5) days, excluding Saturday, Sunday, or state or federal holidays, after proper notice following the expiration of the lease or rental agreement or presents identification to the lessor or renter thereof which is false, fictitious, or not current with respect to name, address, place of employment, or other appropriate items.
* * *
(e) The following factors shall constitute an affirmative defense to prosecution for theft:
(1) That the lessee accurately stated his name and address at the time of rental;
(2) That the lessee's failure to return the item at the expiration date of the rental contract was lawful;
(3) That the lessee failed to receive the lessor's notice personally unless notice was waived; and
(4) That the lessee returned the personal property to the owner or lessor within forty-eight (48) hours of the commencement of prosecution, together with any charges for the overdue period and the value of damages to the personal property, if any.
Although the foregoing provisions simply set forth a method of establishing a prima facie case and an affirmative defense, the presence of an obligation to return the personal property to the owner at the expiration of the agreement is clearly contemplated. If the agreement is actually a sale whereby the "renter" will own the property upon completion of the "rental" payments, then there is no such obligation.1
The determination of whether a "lease" agreement is a true lease or a conditional sales contract will depend upon the particular agreement involved, as well as the facts surrounding the agreement. The Arkansas Supreme Court has indicated that the presence of the following factors would indicate that an agreement is a conditional sale rather than a true lease:
(1) The lessor is a finance company;
(2) The agreement puts all the risk upon the lessee;
(3) The agreement provides the same remedies upon the lessee's default in the payment of rent that would be available to a conditional seller or to a mortgagee upon similar delinquency;
(4) The agreement provides that the lessee will upon the lessor's request join the lessor in executing financial statements pursuant to the Uniform Commercial Code and other assurances the lessor deems necessary for protection of the interest of the lessor in the equipment; and
(5) There is an absence of any appreciable residual in the lessor at the expiration of the lease.
Sutton v. Ryder Truck Rental, Inc.,
Again, if the underlying contract is a conditional sales contract, then A.C.A. §
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Warren T. Readnour.
Sincerely,
WINSTON BRYANT Attorney General
WB:WTR/cyh