Caldwell v. Guardian Trust Co.
Decision Date | 23 April 1928 |
Docket Number | No. 7795.,7795. |
Citation | 26 F.2d 218 |
Parties | CALDWELL v. GUARDIAN TRUST CO. et al. |
Court | U.S. Court of Appeals — Eighth Circuit |
COPYRIGHT MATERIAL OMITTED
Robert E. Wiley, of Little Rock, Ark., for plaintiff in error.
Charles D. Frierson, of Jonesboro, Ark., for defendants in error.
Before WALTER H. SANBORN and BOOTH, Circuit Judges, and MUNGER, District Judge.
This is a writ of error to review an order denying a motion to intervene in a law action for the purpose of filing therein a petition (1) to set aside the judgment theretofore entered; and (2) to interpose an answer setting up certain alleged defenses to the complaint. The proposed defenses were set out at length in the petition. The motion was heard upon the motion papers, a response thereto by plaintiff, and certain testimony taken at the hearing, which the court ordered to be considered as affidavits. The court, in denying the motion, found that no valid defense was shown by the petition.
The facts which led up to the motion to intervene are substantially as follows:
Drainage district No. 17 of Mississippi county, Ark., was created by Act No. 103 of the session of the General Assembly of the state of Arkansas of 1917, approved February 20, 1917. The act appointed and constituted three persons, naming them, a board of directors of the district, and provided that they and their successors should constitute and be a corporate body by the name of drainage district No. 17. The act in general terms authorized the district to reclaim and improve the lands in a named territory in Mississippi county, Ark., by the construction of ditches, levees, and appurtenances; the improvements to be paid for by assessments of benefits to the lands. The act also authorized the district to issue bonds to procure money to construct the improvements. February 4, 1918, a first issue of bonds was made, amounting in par value to $1,682,500.
Included within the named limits of the district were certain public lands, some unentered, some embraced in unpatented entries. These lands were not subject to the laws of Arkansas relating to drainage districts. Accordingly, the first plans of drainage district No. 17 did not embrace improvements to said lands nor assessments of benefits against them. The portion of the district to which the improvements and assessments under the first plan did not extend, was known as the "Big Lake Area," and included the public lands above mentioned. This Big Lake area constituted about 15,000 acres of the 150,000 acres, more or less, included within the drainage district.
January 17, 1920, an act of Congress was passed subjecting the public lands above mentioned to the drainage laws of Arkansas with certain conditions attached. 41 Stat. 392 (43 USCA §§ 1041-1048). The plans of the drainage district were thereafter modified, and the Big Lake area was accorded improvements and subjected to assessments. February 23, 1920, the General Assembly of Arkansas passed a curative act relative to drainage district No. 17. Acts 1920 (Ex. Sess.), p. 2585. Included among other provisions were the following:
A second issue of bonds was found to be necessary by the board of directors of the drainage district after the modification of the plans. Accordingly bonds were issued bearing date August 2, 1920, amounting in the aggregate to $2,300,000. The improvements were made, and taxes were levied annually, pursuant to the act creating the drainage district, to meet the accruing interest and to provide for maturing bonds. Owing to the failure of many landowners to pay their taxes and for various other reasons, the amounts collected were not sufficient to meet the maturing obligations. The district failed to pay the coupons due February 1, 1926, and the defendant in error, the Guardian Trust Company (formerly Guardian Savings & Trust Company) of Cleveland, Ohio, who was the trustee under both issues of bonds, took over on behalf of bondholders said coupons from the paying agent (Chase National Bank of New York) with the consent of the district. The amount of the coupons so taken over by the Guardian Trust Company was $80,000, being $28,736 upon the first issue and $51,264 upon the second issue.
June 1, 1926, an action at law was commenced in the United States District Court for the Eastern District of Arkansas by the trust company against the drainage district and its three directors to collect the $80,000, with interest and costs. While the action was still pending, on or about June 9, 1926, the district paid the principal sum sued for, to wit, $80,000. The district filed no pleading, and the action remained pending in court.
August 1, 1926, further bonds and coupons matured under each issue. The district could not pay the total amount due on that date. Thereupon certain bond houses in St. Louis and Chicago, which had handled the bonds at the time of issue, with the knowledge and consent of the drainage district, purchased from the fiscal paying agent of the district (the Chase National Bank) bonds and coupons due August 1, 1926, in the total amount of $69,000, being $27,600 of the first issue and $41,400 of the second issue. These bonds and coupons were turned over to the trust company for the purpose of obtaining judgment against the drainage district.
Thereafter, on August 12, 1926, the trust company filed a supplemental complaint in the suit still pending in the United States District Court for the Eastern District of Arkansas, setting up the foregoing facts and praying judgment against the drainage district for $69,000, together with interest and costs of the suit. Out of abundant caution, service was made anew upon the directors of the drainage district. No answer or other pleading was interposed by the district or the directors.
The cause came on for hearing in open court on November 23, 1926. The court found that the defendants had been duly and personally served with process and had made default; that the allegations of the complaint and supplemental complaint were true. Judgment was accordingly entered against the drainage district in the sum of $69,000, with interest since August 1, 1926, together with costs of the action. After all this had been done, and on the 10th of December, 1926, Clinton L. Caldwell, plaintiff in error, filed his motion for leave to intervene. As heretofore stated, the motion was denied.
The main question presented by the writ of error is whether this action by the court constituted error. The Arkansas statute relating to intervention reads as follows:
Crawford & Moses' Digest Stat. of Ark. 1921.
It may be doubted whether this provision authorizes intervention in an action at law for the recovery of money only. However, we do not find it necessary to pass upon the point, and shall not do so, inasmuch as the question has not been fully presented by counsel.
But the right of intervention is one which must be exercised promptly. The application may properly be denied, when not made until after judgment has been rendered. 11 Encyc. Pl. & Pr. 503; Owens v. Colgan, 97 Cal. 454, 32 P. 519; Laugenour v. Shanklin, 57 Cal. 70; Henry, Lee & Co. v. Cass Co., etc., Co., 42 Iowa, 33; Leon First Nat. Bank v. Gill & Co., 50 Iowa, 425; Henderson v. Farmers', etc., Bank, 199 Iowa, 1156, 200 N. W. 581; Meadows v. Goff, 90 Ky. 540, 14 S. W. 535; Hicklin v. Neb. City Nat. Bank, 8 Neb. 463, 467, 1 N. W. 135; Porter v. Knapp, 37 S. D. 279, 157 N. W. 988; Youngberg v. Youngberg, 44 S. D. 1, 181 N. W. 835. See State v. Farmers' State Bank, 103 Neb. 194, 170 N. W. 901.
Even in equity it is unusual to grant leave to intervene after final decree. 21 C. J. § 346, p. 345; Engdahl v. Laverty, 110 Neb. 672, 194 N. W. 862.
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