Case Name: R. H. HORTON et al v. City of PARAGOULD, Arkansas et al
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1974-12-02
Citations: 257 Ark. 313
Docket Number: 74-162
Parties: R. H. HORTON et al v. City of PARAGOULD, Arkansas et al
Judges: 
Reporter: Arkansas Reports
Volume: 257
Pages: 313–328

Head Matter:
R. H. HORTON et al v. City of PARAGOULD, Arkansas et al
74-162
516 S.W. 2d 370
Opinion delivered December 2, 1974
Rhine & Rhine, for appellants.
Cathey, Brown, Goodwin & Hamilton, for appellees.

Opinion:
J. Fred Jones, Justice.
This is an appeal from a circuit court order overruling a demurrer and dismissing parts of a cross-complaint or counterclaim.
The appellee-plaintiffs as Mayor and city councilmen of the City of Paragould, together with appellee-plaintiffs Harris and Smith as newly elected water and sewer commissioners, filed suit in circuit court against the appellant-defendants as individuals and as water and sewer commissioners, and as members of a class of property owners in Water and Sewer Improvement District No. 3 of the City of Paragould.
The ten page complaint traced the legislative and ordained history of Improvement District No. 3 and alleged that under the provisions of the state law and municipal ordinances, Improvement District No. 3 had fulfilled the purpose of its creation and that by operation of law the ownership of the water and sewer system and its facilities had reverted to the citizens of Paragould, to be operated under the supervision and control of the governing body of the City of Paragould. The complaint then alleged that the defendant-commissioners had refused to recognize Harris and Smith as newly elected members of the commission; that they had neglected and refused to account to the City of Paragould, through its Mayor and city council, as to any of the official acts of the commission pertaining to the finances and operation of the water and sewer system of the city; had failed to keep accurate records of business transactions and had in fact usurped the offices of Harris and Smith, and had refused to permit the city council to inspect or copy water and sewer records.
The amended complaint then prayed for a declaratory judgment determining the ownership and right to manage and control the water and sewer system of the City of Paragould, and for an order directing the defendant-appellants Keeton and Gardner to cease the usurpation of the offices rightly belonging to Harris and Smith; for a mandatory injunction requiring the defendants to make available to the plaintiffs and the citizens of Paragould, access to the records of the water and sewer commission, and requiring them to comply with ordinances of the City of Paragould, and to render an accounting to the City of Paragould for the receipts and disbursements of funds passing through their hands as such commissioners, and to make certain reports to the city council.
The appellant-defendants filed a general demurrer to the complaint alleging that it did not state facts sufficient to constitute a cause of action and praying that the complaint be dismissed. The appellants then filed a 50 page brief in support of their demurrer and it is included in the record on this appeal. The appellee-plaintiffs made request for admissions and in response thereto, the appellant-defendants refused to admit or deny any of the requests made by the plaintiff-appellees until after their general demurrer was acted on by the trial court.
The appellant-defendants then filed an answer and cross-complaint in which they, in effect, denied each material allegation in the complaint. The defendant-appellants alleged in subsections (a) and (b) of Section VIII of what they termed a "Taxpayer's Cross-Complaint Against the Plaintiffs" that the city council had passed an ordinance in which a provision provided that the operation of the water works and sewer system and collection of revenues therefrom, should be under the control of the water and sewer system "heretofore established and presently functioning in the City. " They then alleged that the board, so referred to in the ordinance, was the same board as the named defendants; that the plaintiffs were estopped to challenge the authority of said board because of their contractual obligations set out in the ordinance, and that the Acts and ordinances relied on by the appellee-plaintiffs were unconstitutional and void.
In subsections (c) through (k) the cross-complaint then alleged various acts amounting to misfeasance and non-feasance in office by the Mayor and city council in connection with many collateral and unrelated matters and in connection with many collateral and unrelated matters and in connection with the employment of special counsel rather than using the services of the city attorney in procuring the passage of unconstitutional legislation and prosecuting frivolous lawsuits, some of which were against the directors of Improvement District No. 3. The appellants also alleged in these subsections that the Mayor was receiving salary in excess of constitutional limit, and they prayed personal judgments for reimbursement and for injunctive relief.
As a separate item in response to appellees' motion to strike the above subsections of the cross-complaint, the appellant alleged conflicts of interest between the appel-lees and their special counsel and moved for a show cause order against the attorneys for violation of the canons of professional ethics.
The order appealed from in this case recites as follows:
"On this 23rd day of April, 1974, court being in session, there came on to be heard the defendants'demurrer, the plaintiffs' motion to strike defendants' demurrer, defendants' motion to dismiss request for admissions, plaintiffs' motion to strike portions of defendants' counterclaim cross-complaint, and defendants' motion to show cause why Canons of Professional Ethics are not being violated, plaintiffs appearing by and through their attorneys, Cathey, Brown, Goodwin and Hamilton, and defendants appearing by their attorneys, Rhine and Rhine. The court, having reviewed pleadings, the motions with exhibits attached thereto, having heard statements of counsel and being fully advised in the premises, does find and order that:
1. Defendants' demurrer should be and hereby is overruled and denied.
2. Subparagraphs c, d, e, f, g, h, i, j and k of paragraph VÍÍÍ of the defendants' answer and counterclaim should be and they hereby are dismissed without prejudice to the rights of the defendants or any of them to file suit in a separate case concerning the allegations contained therein in a court of competent jurisdiction.
3. The defendants' motion to show cause why Canons of Professional Ethics are not being violated should be and it hereby is dismissed as not being within the competent jurisdiction of this court in this proceeding.
4. The defendants should be and they hereby are granted twenty days from this date within which to file further responsive pleading or further proceeding in this matter.
5. To the actions and orders of this court defendants do except and object, which exceptions and objections are hereby noted of record, and the defendants did note their intention to appeal the court's ruling to the Supreme Court of the State of Arkansas.
IT IS SO ORDERED."
Upon appeal to this court the appellants set out the points they rely on for reversal as follows:
"The lower court erred when it overruled appellants' demurrer to the complaint filed by the appellees which complaint prayed for a declaratory judgment and information in the nature of quo warranto and other relief in an attempt to enforce City'of Paragould Ordinance 904, an ordinance to create a municipal water and sewer commission to take over the ownership, operation, and control of the water facilities of the City of Paragould now owned and controlled by Water Improvement District No. 3 of Paragould, Arkansas, with the authority to 'sell any property, real or personal, not necessary to be used in the operation of the facility within its supervision.'
(A) The City Council of Paragould, Arkansas, had no legislative powers expressly conferred or fairly implied to pass Ordinance 904 and Ordinance 904 is a void ordinance.
(B) Section VII of Ordinance 904 violates the Constitution of the State of Arkansas and the Fifth Amendment of the Constitution of the United States.
(C) Ordinance 904 is in direct conflict with Special Act 487 of 1923 which is still in full force and effect.
The lower court erred when it dismissed the defendants' (appellants') 'cross-complaint' and referred to the 'cross-complaint' as a 'counterclaim.'
The lower court erred when it dismissed without hear ing defendants' motion 'to show cause why the canons of professional ethics are not being violated by the appellees' attorney.'
We are unable to consider the points relied on by the appellants because this is an appeal from an interlocutory order and not from a final order or judgment disposing of the issues.
As early as 1915 in the case of Davis v. Receivers St. L. & S. F. Rd. Co.. 117 Ark. 393, 174 S.W. 1196, the defendant demurred to a complaint and the court sustained the demurrer. In the case at bar, as was recited in Davis, "no judgment was rendered dismissing the complaint of the plaintiffs and not even a judgment for cost was rendered." In Davis we held that when the trial court sustained the demurrer, the plaintiff had his election to amend his complaint, or, to rest on his complaint and permit final judgment to be rendered dismissing his complaint and then appeal. In so holding, we said:
"It is well settled in this State that no appeal lies where there is no final judgment. The order of the court sustaining the demurrer was not a final judgment but was interlocutory, merely."
See also the more recent case of Spruill v. Hamilton, 207 Ark. 468, 181 S.W. 2d 35, and cases cited therein.
The appellants simply argue the merits of the cause under their contention that the trial court erred when it overruled their demurrer to the complaint, and in their reply brief they argue that this court should sustain their demurrer and they state, in part, as follows:
"The appellees contend that the order of the lower court was not a final order and not appealable. [I]n this case, the order entered by the lower Court did dismiss appellants' demurrer, and also dismissed the appellants' Cross-Complaint. Certainly this lower court order was final as to the Cross-Complaint, and to force these appellants into a trial without a final adjudication on the 'Cross-Complaint Question,' and if after the alleged cause of action is heard in the lower court, then the question of the Dismissal of the Cross-Complaint is again submitted to this Court, and this Court finds that the Cross-Complaint should not have been dismissed, a great injustice would be forced on these appellants."
The appellants' argument in this connection has been answered contrary to their contention in at least three decisions of this court. In Security Mtg. Co. v. Bell, 175 Ark. 128, 298 S.W. 865, the appellee-defendant filed separate demurrers to Sections 2 and 3 in the first paragraph of Section 4 of the complaint. The trial court sustained the demurrer to Section 3 and the first paragraph of Section 4, but overruled it as to Section 2. The appellant refused to plead further and the complaint was dismissed as to Section 3 and the First paragraph of Section 4 from which order the plaintiff appealed. We held in that case that an objection and exception (at that time required) to the ruling of the court sustaining a demurrer to the third section and fourth paragraph of the complaint fully saved the point on review and adjudication of the whole action, and in that case we quoted from Davie v. Davie, 52 Ark. 224, at p. 227, 12 S.W. 558, and said:
" 'The object of the limitation is to present the whole cause here for determination in a single appeal and thus prevent the unnecessary expense and delay of repeated appeals.'
As the appeal must be dismissed for being prematurely taken, we refrain from passing upon the issues determined upon demurrer until the whole case is brought before us on appeal properly taken and prosecuted."
In Renner v. Progressive Life Ins. Co., 191 Ark. 836, 88 S.W. 2d 57 (1935), the trial court entered an order sustaining a demurrer to part of a complaint and granting a motion to dismiss as to other portions of the complaint. In that case we said:
"The effect of the foregoing order was to dismiss
appellant's complaint in part only, and to retain a substantial part thereof for trial. In Security Mortgage Company v. Bell, 175 Ark. 128, 298 S.W. 865, reading from the second headnote, we stated the applicable rule as follows: 'An appeal from an order dismissing a cause as to certain paragraphs, but leaving the paragraph which presented a triable issue, held prematurely taken, since the issues should have been tried and objections to the demurrer urged on the final appeal from the whole action.'
Appellant's cause being dismissed in part only this appeal is prematurely prosecuted, and must be dismissed."
In the very recent case of Ind. Ins. Consultants v. 1st State Bk., 253 Ark. 779, 489 S.W. 2d 757, the trial court granted a motion for summary judgment and in so doing dismissed an intervention. After notice of appeal was filed, the trial court corrected its order to show only a partial dismissal of the intervention pertaining to the $21,000 item in issue, and the appellant contended that the trial court lacked jurisdiction to correct its order after the filing of notice of appeal. We found no merit to the contention and in that case we said:
"We do not reach the merits of the other points argued by appellant for lack of a final order. In Renner v. Progressive Life Insurance Co., 191 Ark. 836, 88 S.W. 2d 57 (1935) and Security Mortgage Co. v. Bell, 175 Ark. 128, 298 S.W. 865 (1927), we pointed out that an order dismissing a complaint in part and leaving a part which presented a triable issue was not an appealable order."
The appeal in this case is dismissed without prejudice.
Fogleman, J., concurs in part and dissents in part.