Parker v. Nixon

• Decision Date: 11 January 1932
• Docket Number: 77
• Citation: 44 S.W.2d 1088,184 Ark. 1085
• Parties: PARKER v. NIXON
• Court: Arkansas Supreme Court

44 S.W.2d 1088

184 Ark. 1085

PARKER v. NIXON

No. 77

Supreme Court of Arkansas

January 11, 1932

Appeal from Pulaski Circuit Court, Second Division; Richard M. Mann Judge; affirmed.

Judgment affirmed.

June P. Wooten and Troy W. Lewis, for appellant.

Roberts & Stubblefield, for appellee.

OPINION

SMITH, J.

This appeal is a continuation of the case of Arkansas Mineral Products Company v. Creel, found reported in 181 Ark. 722, 27 S.W.2d 1003.

As appears from the facts there stated, S. H. Creel owned a tract of land in Saline County which contained a valuable clay deposit, which land he conveyed to a corporation known as the Arkansas Mineral Products Company which was organized to develop the land. The conveyance was made to the corporation subject to a mortgage, which the corporation assumed but failed to pay, and the land was sold under a decree of foreclosure. Creel died, and his widow, as sole devisee under his will, redeemed the land by paying the mortgage debt. Mrs. Creel then brought suit in the Pulaski Chancery Court for the money thus paid, and, in connection with this suit, she prayed the cancellation of certain deeds based upon the sale of the land under the execution which had issued on the judgment in favor of Ben F. Reinberger for services rendered the corporation, it being alleged that the judgment had been obtained by fraud. The relief prayed was granted by the decree of the Pulaski Chancery Court, and that decree was reversed in part in the opinion above referred to upon the ground that the suit, which was one, in effect, to compel a reconveyance of the land, was a local action and was maintainable only in the county where the land was situated under § 1164, Crawford & Moses' Digest. The judgment for the debt resulting from the redemption of the land by Mrs. Creel was, however, affirmed.

This opinion was delivered May 5, 1930, and thereafter, to-wit, on July 28, 1930, the receiver who, under the orders of the Pulaski Chancery Court, had taken charge of the assets of the corporation, filed a pleading, which was denominated a petition to vacate the judgment under which the execution had issued and under which the land had been sold. A summons was issued and duly served upon Reinberger, the judgment plaintiff, and testimony was heard in support of and in opposition to the prayer of the petition. The court in which the judgment in favor of Reinberger had been rendered made the following findings of fact:

"In this case, the court finds that the Arkansas Mineral Products Company acquired the land of the petitioner, Creel, subject to a mortgage of $ 500; that none of the stockholders actually purchased or paid for the stock, but that the equity in the land was given a fictitious value to support the stock issue. By the terms of the contract, J. M. Ensor was to loan the company the funds which he might thereafter advance. This amounted to $ 200. It was not a payment of stock, but a loan to the company. This company employed the plaintiff, Ben F. Reinberger, to procure a permit from the Blue Sky Department for the sale of its stock. Under this contract, the plaintiff, Ben F. Reinberger, was to receive $ 500 face value of the stock. The work was performed, and the stock was never issued to Ben F. Reinberger according to this contract. At the time suit was filed, J. M. Ensor was president and A. W. Hall was secretary. Demand was made of these gentlemen for the issuance of the stock, but, instead of issuing the stock, which was known at the time to all parties to be worthless, the president and secretary of the Company chose to violate the contract and to confess judgment for $ 500 in money. There was no meeting of the board of directors in the confession of this judgment, but the answer was prepared by the plaintiff, and the appearance of the defendant entered in violation of the contract, and judgment was confessed in violation of the contract, and the effect of this judgment was to divest all the assets of the company, when, according to the terms of the contract, the stock could and should have been issued, in which event the stockholders would have participated with the remainder of the stockholders in the assets of the corporation. From these facts, this court concludes that the conduct on the part of the officials of the corporation and the plaintiff amounted to a legal fraud on the court in obtaining the judgment in the case. For this reason, the motion to set aside said judgment should be and is hereby granted.

"It is contended that the lapse of time precludes the petitioner from obtaining the relief he seeks. It appears from the testimony that there was no material lapse of time, but that the petitioner asserted his rights in the chancery court of Saline County and in the chancery court of Pulaski County with due diligence on discovery of the fraud of which he complains. The petition for setting aside said judgment will be granted, and the judgment will be set aside for the reasons indicated."

Upon these findings of fact the court rendered judgment vacating and annulling the original judgment rendered in Reinberger's favor on June 25, 1925, and this appeal is from that judgment.

We will not review the testimony upon which the findings were made that the judgment had been procured by fraud practiced upon the court in its rendition, but, having considered this testimony, we announce our conclusion that it is legally sufficient to sustain the findings made; and we are also of the opinion that upon these findings the plaintiff was entitled to the relief prayed and granted.

This appeal is from the judgment of the court setting aside the judgment in Reinberger's favor, and its reversal is urged upon several grounds which we now proceed to consider.

The proceeding was brought under the authority of the fourth subdivision of § 6290, Crawford & Moses' Digest, wherein it is provided that the court in which a judgment has been rendered shall have power, after the expiration of the term at which it was rendered, to vacate or modify the judgment "* * * for fraud practiced by the successful party in the obtaining of the judgment or order." Section 6292, Crawford & Moses' Digest provides that the proceeding to vacate a judgment under the provisions of § 6290, supra, shall be by complaint verified by affidavit "setting forth the judgment or order, the grounds to vacate or modify it, and the defense to the action if the party applying was defendant," and that on the complaint a summons shall issue and be served and other proceedings had as in an action by proceedings at law.

It is earnestly insisted that the pleading filed was insufficient and that the receiver had no authority to proceed at all. We think, however, the pleading was...