Title: Nelson v. Berry Petroleum Company

State: arkansas

Issuer: Arkansas Supreme Court

Document:

413 S.W.2d 46 (1967) G. D. NELSON, Appellant, v. BERRY PETROLEUM COMPANY et al., Appellees. No. 5-4136. Supreme Court of Arkansas. April 3, 1967. *47 Kenneth Coffelt, Little Rock, for appellant. Keith, Clegg & Eckert, Magnolia, and Wright, Lindsey & Jennings, Little Rock, and Mahony & Yocum, El Dorado, and Catlett & Henderson, and Smith, Williams, Friday & Bowen, Little Rock, for appellees. HARRIS, Chief Justice. Appellant, G. D. Nelson, a citizen and taxpayer of Arkansas, instituted suit against appellee companies, Berry Petroleum Company, Arkansas Bitumuls Company, Lion Oil Inc., Humble Oil and Refining Company, The American Oil Company,[1] MacMillan Ring-Free Oil Company, Inc., and Bitucote Products Company, alleging, inter alia: The complaint asserts that appellee companies have received unlawfully in excess of $3 million of taxpayers' money; that the grades and quantities of asphalt sold "to the taxpayers of this state" have been of a lower grade and quantity than paid for. Appellant *48 prayed for an accounting of appellees' dealings and transactions with the state and its highway department, in order that the amount of funds and monies owed the taxpayers by reason of the foregoing allegations might be determined. To this complaint, appellees filed their several demurrers, and these demurrers were sustained by the court. Appellant elected to stand on his pleading, declining to plead further, and the court thereupon dismissed said complaint. From the decree so entered, appellant brings this appeal. The issue is thus simply whether the complaint stated a cause of action. In Quinn v. Stuckey, Admr., 229 Ark. 956, 319 S.W.2d 839, this court said: Likewise, in Dodson v. Abercrombie, 212 Ark. 918, 208 S.W.2d 433, we stated: With the rule as thus stated, we have reached the conclusion that the complaint did state a cause of action, and accordingly our discussion will be directed to the points relied upon by appellees in their argument supporting the action of the Chancellor in sustaining the demurrers. Four different arguments are advanced, and we proceed to a discussion of these points, though not in the order listed. It is asserted that the court has no jurisdiction of the cause, it being the position of appellees that the instant complaint is no more than an attempt to assert a cause of action based upon the Sherman Anti-Trust Act and the Clayton Act. We agree that state courts have no jurisdiction in federal antitrust actions, and many federal cases so hold. However, we do not agree that the instant suit is simply an attempt to seek recovery under these federal acts. Instead, it appears to be an action instituted pursuant to Article XVI, Section 13, of the Constitution of the State of Arkansas, which reads, as follows: This is a broad provision of our Constitution, and has been utilized in various types of actions. The case of Starnes v. Sadler, 237 Ark. 325, 372 S.W.2d 585, contains a comprehensive discussion of the meaning of the term, "Illegal Exaction." There, we said: In Revis v. Harris, 217 Ark. 25, 228 S.W.2d 624, suit was instituted by Owen Revis, a citizen and taxpayer, against Sam Harris for recovery of money, which Revis alleged was illegally paid to Harris while he (Harris) was acting as Municipal Judge. Pursuant to a motion to dismiss the complaint filed by Harris, the court overruled so much of the motion as sought to strike the prayer seeking injunctive relief, but granted the motion as to that part of the complaint seeking recovery of the funds allegedly illegally paid to Harris. On appeal to this court, we reversed this holding, stating: In Grooms v. Bartlett, supra, this court stated: We think these cases make it clear that the Chancery Court had jurisdiction to hear this suit.[2] It is also asserted by appellees that the complaint does not state facts sufficient to constitute a cause of action. Again, we are unable to agree with the contention made. In the first phase of this argument, appellees mention that there is a complete absence of any allegation in the complaint that appellant, or anyone else, has made demand upon the State Highway Commission or the State of Arkansas, or its attorneys, to institute proceedings against appellee companies. Appellees contend that it is necessary that this suit be brought by the Attorney General, or at least he must have refused to bring it, before a taxpayer may act, and it is pointed out that there is no allegation that the Attorney General refused to bring the suit. Several earlier cases are cited in support of this argument,[3] but the controlling case on this point is Samples v. Grady, supra. There, we stated: Under the same point, it is also asserted that, though alleging that appellees have defrauded the taxpayers of Arkansas, there are no particular facts pleaded to substantiate this statement, and that, standing alone, the facts pleaded constitute no more than a conclusion of the pleader. The simple answer to this contention is found in the recent case of Brewer v. Hawkins, 241 Ark. 460, 408 S.W.2d 492 (Nov. 1966). In comparing the complaint in that case (the allegations being set out in full) with the complaint in the instant case, it is immediately apparent that the allegations before us are as specific as those in Brewer. For that matter, it is evident that it would have been difficult, if not well nigh impossible, for Nelson to have alleged specific acts relied upon. This information could hardly be obtained until after institution of the suit. Of course, if appellees felt that the allegations were vague and should be pleaded more distinctly and clearly, a motion to make more definite and certain could have been filed. This was not done. It is also contended that Nelson, as a citizen and taxpayer, does not have legal capacity to maintain the action. The cases cited in our discussion of the other points answer this contention, and no additional comment is necessary. Finally, it is alleged that there is a defect of parties plaintiff, it being asserted that the Arkansas Highway Department was a necessary party. We have already cited sufficient authority to the effect that the taxpayer has a perfectly valid right to institute an action to recover public funds, and this being true, the right is not dependent upon any state agency becoming a party. Of course, there is nothing to prevent the Arkansas Highway Department from intervening in the case, and it might well do so; for that matter, the Attorney General, on behalf of the state, is entitled to intervene. Appellees do not make clear just how appellant could force the Highway Department to become a plaintiff, but, from what has been said, it is evident that the department is not an essential party to the litigation. We reiterate, in effect, the statement made at the outset, viz., that we are only called upon to determine whether the complaint was good as against the demurrers filed, and, under the cases cited on that point, we unhesitatingly reply in the affirmative. The decree is reversed, and the cause remanded, with directions to proceed in a manner not inconsistent with this opinion. [1] By agreement of the parties, and the consent of the court, the cause was dismissed as to Humble Oil and Refining Company, and the American Oil Company. [2] There is also a state law, Ark.Stat.Ann. § 70-101 (Repl.1957) prohibiting corporations, partnerships, individuals, "or other association or persons whatsoever" from entering into combinations to fix prices, maintain certain prices, or to fix or limit the amount or quantity of certain articles. This is defined as a conspiracy to defraud. Aside from any statutory authority, an attempted monopoly or an agreement in restraint of trade, was a criminal conspiracy at common law. Hammond Packing Company v. State, 81 Ark. 519, 100 S.W. 407. [3] Griffin v. Rhoton, 85 Ark. 89, 107 S.W. 380; Gladish v. Lovewell, 95 Ark. 618, 130 S.W. 579; Oats v. Smith, 194 Ark. 812, 109 S.W.2d 955; Etheridge v. Riley, 196 Ark. 713, 118 S.W.2d 665. The last two cases were suits to collect on the bond of officeholders, and the actions were brought in compliance with specific statutory provisions. [4] The opinion also distinguishes this case from Gladish v. Lovewell, supra.