Crittenden County v. Williford

• Decision Date: 24 September 1984
• Docket Number: No. 84-117,84-117
• Parties: CRITTENDEN COUNTY, Arkansas, Appellant, v. James R. WILLIFORD, Appellee.
• Court: Arkansas Supreme Court

Page 631

675 S.W.2d 631

283 Ark. 289

CRITTENDEN COUNTY, Arkansas, Appellant, v. James R. WILLIFORD, Appellee.

No. 84-117.

Supreme Court of Arkansas.

Sept. 24, 1984.

Brian Williams and Jake Brick, West Memphis, for appellant.

William R. Wilson, Little Rock, for appellee.

HAYS, Justice.

This case began some years ago when James Williford, appellee, brought a taxpayer's suit in chancery for the benefit of Crittenden County against its Sheriff, Marion Thomas, for an accounting of misappropriated funds. Those efforts resulted in an award in behalf of the county which was partially affirmed on appeal. [See Thomas v. Williford, 259 Ark. 354, 534 S.W.2d 2 (1976) ]. On remand, the county was awarded $106,467.43 against Thomas, with lesser awards against the two bonding companies.

Williford then filed a claim of $25,480.07 with the Crittenden County Court seeking reimbursement of attorneys fees and costs incurred in prosecuting the case. The claim was denied and Williford appealed to the Crittenden Circuit Court. Crittenden County filed a response and without objection the case was transferred to the Crittenden Chancery Court on Williford's motion that equitable remedies were sought.

The Chancellor found that as a result of Williford's suit, which he likened to a class action in behalf of all taxpayers of Crittenden County, a common fund in excess of $75,000 was established from which Williford and other contributing taxpayers were entitled to be reimbursed in the sum of $22,980.07 for their costs and expenses. On appeal, we affirm the Chancellor.

Appellant's first assignment of error attacks subject matter jurisdiction in chancery. Citing Section 57 of [283 Ark. 291] Article 7 of the Arkansas Constitution, ¹ and statutes defining equity jurisdiction, the county urges that its motion to set aside the decree should have been granted notwithstanding its failure to object to Williford's motion to transfer, or its failure to challenge subject matter jurisdiction until after the Chancellor had announced his conclusions and a final decree was entered. It is true our cases hold that since jurisdiction of the subject matter cannot be conferred by consent of the parties, the absence of an objection on that basis is not ordinarily fatal. However, it must be said the rule applies only in those instances where such jurisdiction could not, under any circumstances, exist. Smith v. Whitmire, 273 Ark. 120, 617 S.W.2d 845 (1981); Whitten Developments, Inc. et al v. Agee, 256 Ark. 968, 511 S.W.2d 466 (1974); Price v. Madison County Bank, 90 Ark. 195, 118 S.W. 706 (1909).

We have held that where a court of equity was not "wholly incompetent" to grant the relief sought, questions of the adequacy of the remedy at law are waived when raised for the first time on appeal. Titan Oil & Gas v. Shipley, 257 Ark. 278, 517 S.W.2d 210 (1974). The Titan court stressed the failure to raise the argument before the trial court as the "underlying basis" for its holding. That is the situation before us now, and the same reasoning applies. The relationship between Williford's suit and chancery jurisdiction was not wholly lacking, yet the county not only failed to object to a transfer from law to equity, it approved an order transferring the case to chancery upon a finding that the plaintiff sought equitable relief, which might well be construed as a stipulation that the issues were cognizable in equity.

Nor can those issues be seriously questioned now. Williford's case against Marion Thomas was a taxpayer's suit for funds diverted from the county; it sought an accounting; it was filed and tried in chancery; it was remanded to chancery for modifications that doubtless entailed additional findings; the litigation succeeded in creating a substantial fund which still exists separate from the general funds of Crittenden County and, presumably, is still subject to the orders of the chancery court. Finally, Williford's suit was an attempt to recoup the expenses he had incurred in that difficult and costly litigation which plainly benefitted the county. In that context, how can it be said that under no circumstances could Williford's suit be entertained in equity?

Williford relies on our decision in Powell, Mayor v. Henry, 267 Ark. 484, 592 S.W.2d 107 (1980), where we upheld the Chancellor in awarding attorneys' fees out of a common fund established in behalf of taxpayers. We called such awards "well recognized and proper," citing Marlin v. Marsh & Marsh, 189 Ark. 1157, 76 S.W.2d 965 (1934). In Marlin, our opinion noted (and as the Chancellor observed in this case) that an important factor in consideration of fee allowance was the realization that it would be a discouragement if those who might otherwise pursue this type of litigation were inadequately compensated. Language from Marlin v. Marsh & Marsh, supra, is particularly appropriate here:

When many persons have a common interest in a fund, and one of them, for the benefit of all brings a suit for its preservation, and retains counsel at his own cost, a court of equity will order a reasonable amount paid to him out of the funds in the hands of the receiver in reimbursement of his outlay.

We conclude that equity was not incompetent to grant the relief sought by Williford, that is, an award of costs and attorneys' fees out of a common fund established because of his efforts in behalf of the other taxpayers of the county. The county may not join in a transfer of that suit to equity, try the issues on their merits, lose, and now be heard to say that subject matter jurisdiction was wholly lacking.

Another argument is that by amending his pleading after appeal, Williford enlarged upon his original cause of action. The county cites us to Sharp County v. Northeast Arkansas Planning and Consulting Company, 275 Ark. 172, 628 S.W.2d 559 (1982) and Madison County v. Nance, 182 Ark. 775, 32 S.W.2d 1073 (1930) where we held that cases tried de novo in circuit court on appeal from county court are limited to the same parties and issues. In Madison, after appealing to circuit court, claimants against the county were permitted to amend their complaints to increase the amount claimed, which we said they could not do. In Sharp, we found no prejudice to the county where, on appeal, a claimant had amended his claim to reduce the amount from $7,000 to $4,530.

Here, except for a downward correction in the amount claimed, neither the parties nor the amounts were changed on appeal. We find no fundamental transformation of Williford's claim to have occurred here, and we have held that on appeal from county court the trial court has discretion in permitting amendments which do not change the original cause of action. Saline County v. Kinkead, 84 Ark. 329, 105 S.W. 581 (1907); Freeman v. Lazarus, 61 Ark. 247, 32 S.W. 680 (1895).

Next, the county contends Williford should not be awarded interest of $2,862.26, or $12,500 of the attorneys' fees advanced by others and for which he was not legally obligated. Appellant urges that interest is not recoverable against counties under Ark.Stat.Ann. § 29-124 (Repl.1979), and that when a person pays money on an unenforceable demand, the payment is deemed to be voluntary and cannot be recovered (citing Ritchie v. Bluff City Lumber Co., 86 Ark. 175, 110 S.W. 591 (1908); see also Northcross v. Miller, 184 Ark. 463, 43 S.W.2d 734 (1931) and Turpin v. Antonio, 153 Ark. 377, 240 S.W. 1076 (1922). The county claims that because other persons, not parties to the suit, had contributed some $12,500 of the amount awarded Williford, those were voluntary contributions which could not be enforced against Williford and, hence, should not be recovered by him. Appellee responds that these arguments are new on appeal and the abstract bears out this contention. Since the appellant has left these assertions unanswered, we will assume their accuracy. Sun Gas Liquids Co. v. Helena National Bank, 276 Ark. 173, 633 S.W.2d 38 (1982).

Finally, the county argues that the Chancellor should not have reinstated the case following its dismissal without prejudice under Rule 10 of the Rules of Circuit and Chancery Courts. But it is quite clear that the dismissal order was entered as the result of a clerical mistake and the reinstatement of the case was a matter for the Chancellor's discretion. Keith v. Barrow- Hicks Ext. Imp. Dist. 85, 275 Ark. 28, 626 S.W.2d 951 (1982).

Finding no error, we affirm the decree.

GEORGE ROSE SMITH and DUDLEY, JJ., dissent.

GEORGE ROSE SMITH, Justice, dissenting.

In 1970 the appellee Williford brought a taxpayer's suit to require the county sheriff to account for money he had received from ...