Oliver & Oliver v. Western Clay Drainage Dist.

• Decision Date: 05 June 1933
• Docket Number: No. 4-3050.,4-3050.
• Citation: Oliver & Oliver v. Western Clay Drainage Dist., 61 S.W.2d 442, 187 Ark. 539 (Ark. 1933)
• Parties: OLIVER & OLIVER v. WESTERN CLAY DRAINAGE DIST. et al.
• Court: Arkansas Supreme Court

61 S.W.2d 442

OLIVER & OLIVER v.WESTERN CLAY DRAINAGE DIST. et al.

No. 4-3050.

Supreme Court of Arkansas.

June 5, 1933.

Rehearing Denied July 10, 1933.

Appeal from Clay Chancery Court, Western District; J. M. Futrell, Chancellor.

Suit by the Western Clay Drainage District against Oliver & Oliver, a partnership, composed of G. B. Oliver, Sr., and G. B. Oliver, Jr., and others. From the decree, the named defendants appeal, and the complainant cross-appeals.

Affirmed on the cross-appeal, and reversed on the appeal and remanded, with directions.

Oliver & Oliver, of Corning, for appellants.

J. L. Taylor, of Corning, for appellees.

MEHAFFY, Justice.

The Western Clay drainage district was formed by special act of the Legislature in 1907.The directors were authorized to divide the territory included in said district into subdistricts, and it was divided into five subdistricts.Subdistrict 5 began suit in Clay county against numerous persons to foreclose its lien for annual assessments.

G. B. Oliver, one of the appellants, owned considerable property in subdistrict 5, and the partnership of Oliver & Oliver, composed of G. B. Oliver, Sr., and G. B. Oliver, Jr., owned one half of a judgment which was rendered against the district April 29, 1929, the other half of said judgment having been settled.Nothing had ever been paid on the half of the judgment belonging to Oliver & Oliver, and there was a balance due them of $10,018.53 at the time the suit was filed.

The appellants filed a cross-complaint alleging that they owned the judgment against the district, and asked that the amount of taxes due the district from Oliver be credited on the judgment.

They alleged in the cross-complaint that one W. R. Brown, doing business as Clay County Dredge Company, entered into a contract with subdistrict 5 for the construction of drains and levies in said subdistrict; that under the contract, estimates of the work done were to be made from time to time as the work progressed; and that Brown was to be paid the amount of estimates, less 15 per cent. until the work was completed.When the work was completed this 15 per cent. was to be paid to Brown.

On the completion of the work, the district refused to pay Brown, giving as a reason that the work had not been completed within the time prescribed.Brown assigned his cause of action to W. D. Polk.Polk brought suit and recovered a judgment for Polk and Brown for $16,559.67, with interest at 6 per cent. from April 29, 1929, to date of judgment.

Appellants further alleged in their cross-complaint that one-half of the judgment had been sold by the receiver who had been appointed to take charge of Polk's property, and that under an order of the chancery court one-half of the judgment was assigned to the appellants, and that nothing has been paid on said judgment; that the subdistrict sold bonds of the face value of $110,000 receiving therefor $106,000 in cash; that $140,000 of benefits was assessed against the property in the subdistrict.The act authorized the subdistrict to sell bonds for the purpose of the construction of the improvements, and it is alleged that they sold bonds sufficient to pay for the construction work and all incidental expenses only the sum of $91,000; that they knowledge of appellants, or their privies, wrongfully and unlawfully transferred $10,679.44 of the funds received for construction, and wrongfully and unlawfully used the same to make payments to the bondholders of subdistrict 5; that the amount of taxes collected from the lands in subdistrict 5 amounted to $107,380.56, but that the subdistrict paid to the bondholders $118,060, and the district has paid for construction, maintenance, and all expenses, but that the district, without the also collected by lending the proceeds of the sale of its bonds a large sum of money; that said district has no means with which to pay the judgment of appellants, except from the annual taxes collected.

They ask that the taxes due from G. B. Oliver, Sr., to the district, be credited on the judgment owned by appellants; that the treasurer and directors of the district be restrained from receiving in payment of taxes anything except money until appellants have been paid in full; and that the directors be ordered to restore to the construction fund and pay to appellants, all money received until their judgment is fully satisfied, and that they be restrained from paying any money to the bondholders until said judgment is paid.

Appellees demurred to the cross-complaint of appellants, and the court sustained the demurrer, except he found that the taxes due on the lands should be credited on the judgment.The case is here on appeal.

The appellees contend that the bondholders should be made parties.This question was not raised in the court below, and section 1189 of Crawford & Moses' Digest provides that the defendant may demur to the complaint where it appears on its face that there is a defect of partiesplaintiff or defendant.

Section 1190 provides: "The demurrer shall distinctly specify the grounds of objection to the complaint; unless it does so, it shall be regarded as objecting only that the complaint does not state facts sufficient to constitute a cause of action."

The appellees filed a general demurrer but did not specify, as required by the statute, the grounds of objection to the complaint, except to state that the cross-complaint did not state facts sufficient to constitute a ground for the...