Seitz v. Meriwether

• Decision Date: 05 October 1914
• Docket Number: 144
• Citation: 169 S.W. 1175,114 Ark. 289
• Parties: SEITZ v. MERIWETHER
• Court: Arkansas Supreme Court

169 S.W. 1175

114 Ark. 289

SEITZ v. MERIWETHER

No. 144

Supreme Court of Arkansas

October 5, 1914

Appeal from Greene Chancery Court; Charles D. Frierson, Chancellor reversed as to Mitchell; affirmed as to Spence; appeal of the contractors dismissed.

Decree affirmed in part reversed and remanded in part with appeals dismissed.

R. H Dudley and R. E. L. Johnson, for appellants.

1. On behalf of appellant Spence, we contend:

The act contemplates two separate attorneys, or one attorney to act in two separate and distinct capacities. Acts 1909, p 429, § 21.

The payment of $ 500 to him was voluntary, with full knowledge of the law and facts connected therewith, and, there being neither allegation nor proof of fraud, can not now be recovered back. 46 Ark. 167; 49 Ark. 70; 70 Ark. 5; 72 Ark. 552; 92 Ark. 309; 102 Ark. 159.

The board, in making the allowance and payment to the attorney, acted clearly within their discretion, and the courts have no jurisdiction of the subject-matter.

2. On behalf of the appellant contractors, it is urged:

Under the averments of the complaint, the chancery court had no jurisdiction to wrest the management, control and construction of the ditch and levee from the board of directors and lodge the same in the chancery court. 5 Pomeroy, Equity Jur., §§ 342-346.

Fraud will not be inferred against the majority of the board, because they refused to discharge the engineer on the demand of one member. Moreover, there is no allegation that his report was not true, nor that the members of the board had any knowledge of any irregularity or impropriety charged against either the engineer or the contractors. 153 S.W. 259.

The decree deprives the contractors of their right to perform their contract under the direction of the board, and orders an accounting before a special master, when the proof fails to establish, and the court does not find, that either the board or the contractors were acting illegally, wrongfully or fraudulently. 168 F. 756; 115 S.W. 1090; 83 Ark. 554; 160 U.S. 1, 40 L.Ed. 319-337; 228 U.S. 610, 57 L. Ed., 989; 114 N.Y.S. 689; 118 N.W. 712; 49 So. 317; 201 Mass. 596; 88 N.E. 348; 76 N.E. 529; 208 Ill. 623.

The decree as to the contractors is final in that it adjudicates adversely to them, that the complaint states a cause of action against them; that the court had jurisdiction to render the decree; that they are not entitled to pay for the refill of the muck ditch, and that they be required to render an account to a special master. 80 Ark. 513; 104 Ark. 379; Id. 641.

3. For appellant Mitchell:

The chancery court was without jurisdiction to render the decree ousting him as engineer and restraining the board from continuing him in that position. Chancery has no jurisdiction to interfere by injunction with the acts of the board done in the exercise of the grant of power conferred by the legislative enactments, where there is no allegation nor proof of fraud on the part of the board in the selection of the engineer. 96 Ark. 424, and authorities cited; 160 S.W. 240.

The board proceeded in accordance with the power conferred by the acts of the Legislature. The board's acts were therefore legal, and injunction did not lie. 22 Cyc. 880, and authorities cited.

M. P. Huddleston and Block & Kirsch, for appellees.

1. The St. Francis Drainage District is a public quasi-corporation, having no powers other than those expressly conferred by statute. 94 Ark. 380; 79 Ark. 229; 67 Ark. 413; 93 Ark. 491; 71 Ark. 4.

Where there is any doubt as to the existence of any of its powers, the doubt must be resolved against the district. 1 Dillon, Mun. Corp. (4 ed.), § 89. Its governing officers or board of directors are mere trustees of the funds and property of the taxpayers of the district, and accountable as such in equity for any abuse of their trust. 52 Ark. 541; 33 Ark. 704; 2 Dillon, Mun. Corp., §§ 915-919. And taxpayers of the district may maintain a suit against such officers or board of directors to correct abuses and prevent misapplication of the funds. 54 Ark. 645; 101 U.S. 601; 121 Ill. 290; 103 Ind. 449; 23 C. C. A. 631. Equity has the power in such cases not only to grant relief by injunction, but also to compel restitution of funds unlawfully paid out. 61 Neb. 882; 85 Ark. 89; 75 N. W. (Wis.) 245; 101 N. W. (Ia.) 1055; 80 N. W. (Minn.) 694; 102 Wis. 181.

2. The statute, section 21, of Act 172, Acts 1905, under which appellant Spence was employed, contemplates the employment of but one attorney, and limits his compensation to the sum of $ 250 per annum. Even if the act contemplated the employment of two attorneys, the language of the act is sufficiently clear to limit their aggregate compensation to the sum of $ 250. Chancery was the proper forum in which to bring the suit, and had jurisdiction to order Spence to refund the five hundred paid to him without authority of law. Const. 1874, art. 17, § 13; 90 Ark. 219; 85 Ark. 89; 88 Ark. 353; 173 Ill. 331; 51 Ind. 325.

The rule as to voluntary payments, has no application to the facts presented here. 83 Ark. 275.

3. Under the provisions of section 15 of the act (Acts 1905, p. 442), it was the duty of the board of directors to withhold 15 per cent of the estimates furnished by the engineer to guarantee a faithful performance of the contract. Their failure to do this was contrary to the law, and gave any taxpayer of the district the right to come into equity to prevent such further payments and to secure redress for payments already made.

Any acceptance by the engineer of work that resulted from any change in the contract not in his power to make, could not be binding on the district, nor upon the taxpayers thereof. 100 Ark. 166. The board of directors themselves had no authority to change the contract after it had been let. Section 14 of the act; 93 N. W. (Minn.) 911; 97 Id. 420; 75 N.Y. 65; 43 N. E. (Ind.) 216; 135 Ala. 187.

OPINION

MCCULLOCH, C. J.

The St. Francis Drainage District, covering certain territory in Clay and Greene counties, Arkansas, was created by a special statute enacted by the General Assembly of 1905, for the purpose of constructing drainage ditches and building levees in the territory described. The act named five directors and provided for the appointment of their successors by the Governor, and constituted the board a body corporate with authority to cause the improvement named above to be made and to do the other things necessary to carry forward the work.

A section of the statute with reference to the employment of an attorney reads as follows:

"The board of directors or the president thereof, may engage the services of an attorney for the purpose of enforcing the payment of delinquent taxes, and an attorney may also be employed by the board for the purpose of bringing or defending any suit which may be instituted by or against the drainage district, but in all cases of fees to be paid such attorney, shall be agreed upon in writing at the time of employment, and shall not exceed in any one year the sum of two hundred and fifty dollars." Section 21, Act 172, Session of 1905, p. 444.

The statute further provided that the board should effect an organization "by electing a president, a secretary and a treasurer, who shall also be collector, and an engineer, and prescribe the duties and fix the salaries of said officers, not to exceed the amounts fixed by law," and further provided that said officers should be elected for two years at the first annual meeting of the board and biennially thereafter at regular meetings. The board was duly organized and W. E. Spence, an attorney-at-law, in Clay County, was employed as the attorney for the district, and J. D. Mitchell was elected as engineer. The board entered into two written contracts with A. W. Wills & Sons, one for the cutting of a ditch, and the other for the building of the levee as authorized in the statute, and the work was proceeded with pursuant to these contracts. Dissatisfaction subsequently arose on the part of two members of the board, and also on the part of many property owners and taxpayers in the district, concerning the operations of the district, the performance of the contract by the contractors, the method of paying the contractors, and the amounts so paid, and various other things which became the subject-matter of acute controversy. These differences resulted in the present action, instituted by two dissenting directors and several taxpayers against the other members of the board, the contractors, the engineer and the attorney.

In the complaint it is alleged that the contractors were making overcharges under the contract, and were being paid in excess of the contract price; that the stipulated percentage of estimates were not being reserved in accordance with the terms of the contract, and also that there are various other irregularities and inaccuracies in the account with the contractors. It is also alleged that the engineer had fraudulently approved the estimates of the contractors, and had also been guilty of fraud in padding his accounts for salaries of the assistant engineers in his employment. The complaint alleges further, that the attorney, Mr. Spence, had been allowed five hundred dollars as fees in excess of the amount authorized by statute. The prayer of the complaint is that the board of directors be restrained from paying the contractors any further sums of money on account of the levee; that an accounting be had as to the amount of work done by the contractors, and the amount paid by them in accordance with the contract; and an accounting be had of the moneys paid to Mitchell, the engineer; that Spence be compelled to refund the excessive sum of five hundred dollars paid to him; and that the board be...