Jefferson Bank of St. Louis, Missouri v. Little Red River Levee District of White County

• Decision Date: 09 January 1933
• Docket Number: 4-2736
• Citation: Jefferson Bank of St. Louis, Missouri v. Little Red River Levee District of White County, 57 S.W.2d 805, 186 Ark. 1048 (Ark. 1933)
• Parties: JEFFERSON BANK OF ST. LOUIS, MISSOURI v. LITTLE RED RIVER LEVEE DISTRICT OF WHITE COUNTY
• Court: Arkansas Supreme Court

57 S.W.2d 805

186 Ark. 1048

JEFFERSON BANK OF ST. LOUIS, MISSOURI v. LITTLE RED RIVER LEVEE DISTRICT OF WHITE COUNTY

4-2736

Supreme Court of Arkansas

January 9, 1933

Appeal from White Chancery Court; Frank H. Dodge, Chancellor reversed.

Cause remanded.

Culbert L. Pearce, for appellant.

Brundidge & Neelly, for appellee.

OPINION

SMITH J.

Little Red River Levee District No. 1 of White County (hereinafter referred to as the district) was organized on April 7, 1913 by the order of the county court of White County, under the general law providing for the creation of levee improvement districts. Sections 6811 et seq., Crawford & Moses' Digest. To expedite the construction work, bonds were issued and sold pursuant to the authority conferred by law, and a resolution was passed by the board of directors distributing the payment of betterments over a period of twenty-five years from 1913 to 1938, inclusive.

The appellant bank brought this suit, and for its cause of action alleged that it was the owner of six of these bonds, each in the sum of $ 500; that two of the bonds had matured January 1, 1929, two on January 1, 1930, and the other two on January 1, 1931, and that neither these bonds nor the interest thereon had been paid. It was alleged that the district, to secure the payment of these and other bonds, had executed a pledge in writing of all revenues derived from taxes levied upon the real estate within the district, which pledge had been delivered to the Mercantile Trust Company, of St. Louis, Missouri, as trustee, and that it was the duty of the trustee under the pledge to take appropriate action to see that the betterment assessments were collected and the bonds paid from the proceeds of the collections, but that the said trustee had declined to act unless the plaintiff indemnified it against costs, expenses and attorney's fees in a sum designated by the trustee, which offer plaintiff declined and brought suit in its own name.

The right of the plaintiff to sue is questioned; but we think it had that right. The trustee was made a party defendant, and the plaintiff, as a creditor, had the right to demand the payment of its debt in the manner provided by law. As an incident to the enforcement of its demand for the payment of its debt, it had the right to require the officers of the district to apply the taxes of the district to the uses and purposes for which they had been collected. The complaint alleged there had been waste and mismanagement in the affairs of the district; that the taxes had not been collected with diligence, and that excessive and unauthorized fees had been paid to the officers of the district. It was prayed that a receiver be appointed to take over the affairs of the district; that its officers be required to account for its assets, and that an acceleration of the collection of betterments be ordered to the end that the maturing bonds and the interest thereon might be paid.

The act under which the district was created and the bonds issued contained no provision for the appointment of a receiver for the district upon its default in meeting its obligations, and the court properly refused to appoint a receiver for the district. The court can and will make such orders to the directors of the district as are necessary to require them to perform their duties under the law. Paving Dist. No. 5 v. Fernandez, 142 Ark. 21, 217 S.W. 795; Martin v. Hargrove, 149 Ark. 383, 232 S.W. 596; South Miller County Highway Dist. v. Dorsey, 174 Ark. 553, 297 S.W. 833; Sloan's Improvement Districts in Arkansas, § 477; Guardian Savings & Trust Co. v. Road Imp. Dist. No. 7, Poinsett County, 267 U.S. 1, 45 S.Ct. 201, 69 L.Ed. 487.

It is definitely settled that an improvement district may be required to accelerate the collection of the betterments assessed in the district, and that this may be done by increasing the per cent. of the betterments to be collected in a particular year, provided the total assessments ordered to be collected shall never exceed the total amount of betterments assessed in the district, and the total assessments against any particular property shall never exceed the betterments assessed against that piece of property. There is, at all times and under all circumstances, a constitutional inhibition against collecting upon any property any sum in excess of the betterments assessed against it. Griffin v. Little Red River Levee Dist., 157 Ark. 590, 249 S.W. 16; Chicago Mill & Lbr. Co. v. Drainage Dist. No. 17, 172 Ark. 1059, 291 S.W. 810; Arkansas-Louisiana Highway Imp. Dist. v. Pickens, 169 Ark. 603, 276 S.W. 355.

The court declined to order an acceleration of the collection of the betterment assessments, and it is earnestly insisted that this was error. But it does not appear to be so. The complaint alleged that the...