Board of Levee Inspectors of Chicot County v. Southwestern Land & Timber Company

• Decision Date: 20 April 1914
• Docket Number: 268
• Citation: 166 S.W. 589,112 Ark. 467
• Parties: BOARD OF LEVEE INSPECTORS OF CHICOT COUNTY v. SOUTHWESTERN LAND & TIMBER COMPANY
• Court: Arkansas Supreme Court

166 S.W. 589

112 Ark. 467

BOARD OF LEVEE INSPECTORS OF CHICOT COUNTY v. SOUTHWESTERN LAND & TIMBER COMPANY

No. 268

Supreme Court of Arkansas

April 20, 1914

Appeal from Poinsett Chancery Court; Charles D. Frierson Chancellor; affirmed.

Decree affirmed.

Wm Kirten and Moore, Smith & Moore, for appellant.

1. One who wrongfully obtains a patent by fraud or through mistake becomes a trustee for the equitable owner of the title, and the statutes of limitation do not begin to run, nor can the doctrine of laches apply, until the cestui que trust has knowledge of his rights or is apprised of facts from which arose the trust. 44 Ark. 454; 49 Id. 93; 84 Id. 12; Perry on Trusts, etc. (6 ed.), §§ 168, 169, 170; 46 Ark. 25; 58 Id. 84; 20 Mo. 541; Wood on Limitations, etc., § 215; Perry on Trusts § 861.

2. The board had no knowledge of the fraud until the decision in 93 Ark. 621. 3 DeGex & Jones, 547; 76 Ark. 525; Devlin on Deeds, 712.

3. No title has been acquired by constructive possession. 34 S.W. 215.

4. Mere laches is not sufficient. Delay working disadvantage must occur. 75 Ark. 197; 55 Id. 93; 76 Id. 525; 99 Id. 505; 81 Id. 432. Unless a party has knowledge of his rights, he is not estopped by laches. 145 U.S. 368; 82 Ark. 367; 146 U.S. 99; 148 Id. 370; 37 N.W. 558; 29 N.Y. 250; 105 N.W. 724.

F. H. Sullivan, for appellee.

1. Lapse of time has made the patent conclusive. 84 Ark. 12.

2. Appellant is subject to the statute of limitations. 17 F. 86; 191 Id. 251; 197 U.S. 200. It is not the State, but only a public corporation. 41 Ark. 49; 131 U.S. 1; 68 L.R.A. 272.

3. The general statute of limitations is a bar. 58 Ark. 95; 49 Id. 475; 46 Id. 34. Mere ignorance does not prevent the running of the statute unless there is fraudulent concealment. 85 Ark. 589; 121 Cal. 288; 7 John., Chy., 90; 4 Mason 152; 61 Miss. 696; 2 Perry on Trusts (6 ed.), § 865, p. 1419 (note).

4. Appellant is barred by laches. 103 Ark. 58; 95 Id. 182; 55 Id. 92; 41 Id. 303; 81 Id. 438.

5. Excusable ignorance will not now avail. 75 Ark. 319; 169 U.S. 241; 145 Id. 329. Appellant is the same corporation and chargeable with notice. 93 Ark. 630; 28 Cyc. 247; 1 Dillon on Municipal Corporations, §§ 637, 338, 340.

6. No diligence is shown. 75 Ark. 319; 58 F. 472; 71 Id. 19; 5 Pom., Eq. Jur., §§ 27, 28.

OPINION

MCCULLOCH, C. J.

The Board of Levee Inspectors of Chicot County instituted this action in the chancery court of Poinsett County against the Southwestern Land & Timber Company, a corporation organized under the laws of the State of Arkansas, to cancel swamp land patents to certain tracts of land in that county, aggregating 14,700 acres, executed to said defendant on August 11, 1883 by the Commissioner of State Lands.

It is alleged in the complaint that the original certificates of entry of these lands were issued by the State on March 5, 1860, to the plaintiff's predecessor, and that the defendant came into possession thereof under a void assignment and fraudulently obtained patents thereon from the State Land Commissioner.

The defendant filed its answer, setting up the fact that it was an innocent purchaser of the property; that the cause of action was barred by the statute of limitations, and also that plaintiff was barred by its own laches in failing to institute the action within a reasonable time. It also pleaded that it held title under valid patents, and that the assignment of the certificates of entry upon which the patents were issued was a valid act of the holder of said certificates.

The Legislature enacted a statute, approved January 7, 1857, authorizing the election of five levee inspectors in Chicot County to supervise the construction and repairing of levees in that county, and pursuant to the terms of the statute the five persons named as such inspectors met, organized as a board and proceeded to discharge their duties under the act, and laid off the county into five levee districts.

The General Assembly of 1861 passed another statute entitled "An Act to protect all land in Chicot County which is subject to overflow," and authorizing the qualified electors of the county to elect five swamp land commissioners, and providing that the districts then established in that county, known as levee districts, should thereafter be known as swamp land districts.

In the case of State v. Southwestern Land & Timber Co., 93 Ark. 621, 126 S.W. 73, this court held that the Swamp Land Commissioners provided for under the act of January 10, 1861, were successors to the Board of Levee Inspectors provided for in the act of January 7, 1857, and that the act of March 20, 1883, providing for the building and repairing of levees in Chicot County in effect revived the act of January 7, 1857, and "as a consequence property owned by the boards created by the earlier acts passed in succession to the board created by the later act."

The effect of that decision is that plaintiff in this action, The Board of Levee Inspectors of Chicot County, is the successor of the boards provided for in the prior acts referred to above, and that the plaintiff succeeds to any property rights held by its said predecessors

On May 5, 1857, the Board of Levee Inspectors met and passed a resolution authorizing and instructing C. W. Campbell, the president of the board, to apply to and contract with the State Engineer for the building of all levees in Chicot County which could be built under the provisions of the act of January 13, 1857, which authorized the Governor, on the recommendation of the State Engineer, to let contracts to close all gaps in levees previously constructed, and pay for the work in money out of the swamp land funds, and where there were no swamp land funds in the treasury to issue certificates which could be exchanged at the Auditor's office for levee warrants when there was money in the treasury to apply on the payment of the warrants.

Pursuant to that authority, Campbell entered into twenty, or more, contracts, for and on behalf of the Board of Levee Inspectors, with the State of Arkansas, acting by and through the State Engineer, for the construction or repair of certain portions of the levee in that county, and on December 2, 1857, the Board of Levee Inspectors again met and ordered the president to sublet at private lettings contracts which he had made with the State, requiring the said subcontractors to receive payment for work at such time and in the manner that he should receive payment from the State under the contracts with the State, and to receive the same rates as should be paid by the State, "unless said work can be subcontracted at less rates."

Pursuant to that authority, Campbell sublet the contracts to do the levee work, and he afterwards received from the State certificates (there being no swamp land funds in the treasury), aggregating the sum of $ 19,041.00 in payment for the work done under the contract. These certificates were not delivered to the subcontractors in payment for work as stipulated in the former resolution of the board, but were held by the president, one Daniel H. Sessions, who had been elected to succeed Campbell.

The records of the Board of Levee Inspectors disclose the fact that from time to time accounts were filed with the board by subcontractors showing the amount of work done, and certificates were issued to them.

Sessions, as president of the board, and pursuant to a resolution of the Board of Levee Inspectors, used those certificates in purchasing from the State the lands in controversy, and certificates of entry were duly issued by the swamp land agent to Sessions as president of the board.

On December 5, 1867, Sessions executed to D. H. Reynolds a power-of-attorney, reciting the purchase of these lands, and others, the issuance of certificates of entry to Sessions as president of the board, and a resolution of the board adopted at a meeting held on September 2, 1867, appointing Reynolds as the agent and attorney-in-fact of the board "to take charge of all of said lands, and to sell and dispose of the same, or any part thereof, upon such terms as to him might seem best, and to redeem any of said lands that may have been heretofore sold or forfeited for nonpayment of taxes, and to pay taxes upon any of said lands from time to time," and proceeding to constitute Reynolds as the attorney-in-fact of said Board of Levee Inspectors, and for him (Sessions), as president, "to sell and convey all of the lands mentioned in said certificates to such person or persons, and for such price as he shall think fit and convenient, and to assign and transfer any or all of said certificates, or to make and execute any deeds or other instruments in writing in relation to the sale of any or all of the said lands, and of the transfer of any or all of said certificates."

On January 10, 1882, Reynolds, pursuant to the power conferred upon him as aforesaid, assigned the certificates of entry to John T. Burns, and on August 10, 1888, Burns assigned the same to defendant, and on the following day the defendant applied to the Commissioner of State Lands for patents, which were duly issued.

It is contended, in substance, that the title to the lands was vested in the Board of Levee Inspectors of Chicot County, the predecessor of plaintiff; that the power of attorney, purporting to authorize Reynolds to assign the certificates, was void for the reason that the Board of Levee Inspectors could not delegate to Reynolds the authority to sell the lands, and that Sessions had no power, as president of the board, to do so; that the assignment by Reynolds was absolutely void, and that the procurement of patents operated as a fraud upon the rights of the plaintiff as the successor in title to the original owner of...