Rodgers v. Carson Lake Road Imp. Dist. No. 6, 4-3859.

• Decision Date: 17 June 1935
• Docket Number: No. 4-3859.,4-3859.
• Parties: RODGERS et al. v. CARSON LAKE ROAD IMP. DIST. NO. 6 et al. (COLLUM et al., Interveners).
• Court: Arkansas Supreme Court

85 S.W.2d 716

RODGERS et al. v. CARSON LAKE ROAD IMP. DIST. NO. 6 et al. (COLLUM et al., Interveners).

No. 4-3859.

Supreme Court of Arkansas.

June 17, 1935.

Rehearing Denied September 23, 1935.

Appeal from Chancery Court, Mississippi County, Osceola District; J. F. Gautney, Chancellor.

Suit by L. F. Rodgers, trustee, and others against the Carson Lake Road Improvement District No. 6 and others, wherein Joe Collum and others constituting the board of commissioners of the road improvement district and another intervened. From adverse orders, plaintiffs appeal.

Reversed and remanded, with directions.

Elcock & Martin, of Wichita, Kan., and Rose, Hemingway, Cantrell & Loughborough, of Little Rock, for appellants.

Cecil Shane, of Blytheville, and Daggett & Daggett, of Marianna, for appellees.

JOHNSON, Chief Justice.

Carson Lake Road Improvement District No. 6 of Mississippi county was organized in 1929 pursuant to and by authority of section 5399 et seq., Crawford & Moses' Dig., commonly known as the Alexander Road Law.

To effect the contemplated improvements, bonds were issued in the total sum of $370,000 and benefits were duly assessed against the real property situated in the district to secure the due payment of the bonds and interest. The bonds drew interest at the rate of 6 per cent. per annum payable semiannually in May and November each year. The semiannual interest payment which was due on May 1, 1932, aggregating $9,250 was in part defaulted by the district and thereafter L. F. Rodgers, as trustee for the bond owners and holders, instituted suit in the Mississippi county chancery court to enforce collection of delinquent benefit assessments, to enforce the obligations of its bond contract, and for other purposes not necessary to here set out. To facilitate these ends, the chancellor on September 12, 1932, appointed Charles E. Sullenger as receiver and soon thereafter he qualified as such and acted in the premises until this proceeding was instituted and determined.

The second annual report of the receiver, which was filed at the end of his second year's receivership, reflects that there is $37,475 in past-due interest payments in default.

On September 17, 1934, Joe Collum, R. E. L. Wilson, Jr., and R. H. Cromer, who constitute the board of commissioners of Carson Lake Road Improvement District No. 6, and J. H. Crain, a taxpayer within said district, filed their petition of intervention in said receivership matter in which it was, in effect, alleged that the appointment of a receiver by the chancery court is contrary to the spirit of the law and of good business principles; that it was a serious business mistake for the court to so adjudge in the first instance; that section 5451, Crawford & Moses' Dig., authorizing such appointment upon default by the district is in violation of section 15 of article 7 of the Constitution of 1874; that said section (section 5451, Crawford & Moses' Dig.) was expressly repealed by Act No. 46 of 1933 (page 126); and that the bond owners and holders have a complete and adequate remedy at law; therefore that equity has no jurisdiction of the subject-matter and the receivership should be dissolved and the receiver discharged.

The trustee for the bond owners and holders responded to interveners' petition by denying the material allegations thereof and affirmatively alleged that the intervening commissioners of said district, their employees, and business associates own approximately 50 per cent. of the lands situated in said district and have paid no taxes or assessments for the past four years; that while said district was being operated by interveners they failed and refused during the years 1931 and 1932 to bring any suits to enforce delinquent assessments, though such delinquencies were many, and made no effort in this behalf, thereby permitting a default in the district's obligations which superinduced this proceeding.

The chancery court determined that section 5451, Crawford & Moses' Dig., is contrary to section 15 of article 7 of the Constitution and therefore void; moreover, that said section was repealed by Act No. 46 of 1933 (page 126), and that the best interests of the taxpayers of the district would be subserved by the dissolution of the receivership. Proper orders were made to this effect and this appeal follows.

Section 5451, Crawford & Moses' Dig., is not contrary to section 15 of article 7 of the Constitution. This section of the Constitution authorizes the establishment of chancery courts by the Legislature and when so established they draw unto themselves such jurisdiction as was exercised by such courts under the common law and common-law practice. The power to appoint receivers by the chancery courts was fully recognized at common law and it is one of its ancient prerogatives. 23 R. C. L. p. 32, § 30, title Receivers, states the law as follows:

"The power to appoint a sequestrator or receiver seems to have been exercised by the chancellor as early as the time of Edward VI. At all events the appointment of a receiver is one of the oldest remedies in the chancery court. This power is one of the prerogatives of a court of equity, exercised in aid of its jurisdiction, in order to enable it to accomplish, as far as practicable, complete justice between the parties before it."

True, we have consistently held since Hempstead and Conway v. Watkins, 6 Ark. 317, 42 Am. Dec. 696, that the Legislature is without power to add to, limit, or abridge the jurisdiction conferred on chancery courts or circuit courts acting as such by the Constitution of this state. See Hester v. Bourland, 80 Ark. 145, 95 S. W. 992; Gladish v. Lovewell, 95 Ark. 618, 130 S. W. 579; Walls v. Brundidge, 109 Ark. 250, 160 S. W. 230, Ann. Cas. 1915C, 980; German National Bank v. Moore, 116 Ark. 490, 173 S. W. 401; Wilson v. Lucas, 185 Ark. 183, 47 S.W.(2d) 8, but we have never held that where the subject-matter was within chancery courts ancient jurisdiction that the Legislature was without power to regulate the exercise thereof. In fact, we expressly decided to the contrary in Marvel v....