Eddy v. Schuman
| Decision Date | 21 February 1944 |
| Docket Number | 4-7247 |
| Citation | 177 S.W.2d 918,206 Ark. 849 |
| Parties | Eddy v. Schuman |
| Court | Arkansas Supreme Court |
Appeal from Conway Chancery Court; J. B. Ward, Chancellor.
Reversed.
Chas C. Eddy and G. B. Colvin, for appellant.
E A. Williams and U. A. Gentry, for appellee.
October 23, 1943, Dr. J. D. Eddy, appellant, on behalf of himself and all other residents and taxpayers similarly situated and interested, brought this action against appellee, Schuman, and the five commissioners of Conway County Bridge District, seeking to cancel a certain deed from the district to Schuman.
He alleged, in his complaint, that he was a resident and taxpayer of Conway county and had been since the creation of said bridge district pursuant to Act 71 of the Acts of 1917, and has paid all assessments made by the district upon his own land since the district was created.
He further alleged that on December 13, 1940, the bridge district, through foreclosure proceedings, obtained title to fractional southwest quarter of section 7, township 5 north, range 16 west, 147.20 acres, more or less, in Conway county; that under said foreclosure proceedings and deed said bridge district became the sole owner of said land with the right to sell and convey the same; that it was the duty of the bridge commissioners to secure a reasonable, and the best obtainable price for said land, which was worth, when sold to appellee, Schuman, $ 1,000; that disregarding their duty to appellant and all other taxpayers similarly situated, L. T. Oates as secretary and E. E. Mitchel as president of the bridge district, without the knowledge or authority of the commissioners of the district, on December 2, 1941, executed a deed conveying the land in question to appellee, Schuman, for a consideration of $ 9.75; that Schuman knew at the time he obtained said deed that the land was reasonably worth $ 1,000 and that the consideration of $ 9.75, which he paid, was totally inadequate, unconscionable and a fraud upon appellant and all other taxpayers similarly situated. He further alleged "that all debts of said district had been paid at the time of the execution of said deed, and there was no immediate necessity to sell said land"; that it was the duty of the commissioners to obtain a reasonable and fair price for the land and that they either intentionally or carelessly failed to perform their duty in the sale of the land to appellee for a grossly inadequate consideration; that the action of the commissioners in making the sale and of appellee, Schuman, in purchasing the land for the nominal amount of $ 9.75, constituted a fraud upon appellant and all other taxpayers similarly situated and was against "public policy and void, and such as to constitute a shock to the conscience of this court."
Appellant prayed that the deed to Schuman be canceled and title restored to the bridge district and for other equitable relief. To this complaint appellee demurred, alleging:
July 9, 1943, the trial court sustained the demurrer and upon appellant's refusal to plead further, dismissed his complaint for want of equity. This appeal followed.
It will be observed from the allegations in the complaint that at the time Schuman purchased the land in question and secured his deed from the bridge district, all bonds and other indebtedness of the bridge district had been paid in full. This being true, appellee earnestly contends that by virtue of Act 330 of March 15, 1939, which provides: "After all of the valid bonds and interest of any bridge improvement district have been paid in full, then all amounts collected from the sale of lands and from delinquent taxes shall be paid into the State Bridge Bond Retirement Fund," -- the landowners within the district have no interest in the surplus funds or assets of the district and says appellee,
Since the debts of the district have all been paid, and assuming without deciding that all surplus funds and assets of the district became the property of the state and must be paid into the "State Bridge Bond Retirement Fund," under the above act, we cannot agree that appellant, as a resident and taxpayer, has no such interest in these funds...
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