Court Opinion

ID: 7814218
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:29:26.525058+00
Date Added: 2024-06-11T16:30:33.580211
License: Public Domain

Ed. F. McFaddin, Justice (dissenting). I dissent from that portion of the majority opinion which holds that the case should not have been transferred to equity. The rules enunciated throughout our cases are: (a) that if either the relief sought or the defense made is cognizable exclusively in chancery, then the case should be transferred to equity; and also (b) that if the law court cannot afford complete and adequate relief, the' cause should be transferred to equity. Daniel v. Garner, 71 Ark. 484, 76 S. W. 1063; Dunbar v. Bourland, 88 Ark. 153, 114 S. W. 467; Smith v. Pinnell, 107 Ark. 185, 154 S. W. 497; and American Surety Co. v. Vann, 135 Ark. 291, 205 S. W. 646. Measured by the foregoing rules, I earnestly maintain that this case was properly transferred to equity. The majority opinion says: “. . . no facts are pleaded which support any of these principles of equity. In fact the answer itself shows that none of these doctrines is applicable. The mere allegation of an equitable principle is a conclusion, and when no facts are alleged to support such principle, the allegation is not sufficient to give equity jurisdiction.” As I read the pleadings, the grounds for equity were sufficiently and minutely detailed. The complaint of the plaintiff established a trust, and here is the allegation: “That by virtue of the agreement entered into by the defendant, John Baxter, the defendant, John Baxter, agreed that he would pay to the plaintiff his pro rata share of the proceeds of the government loan which might be received from said cotton by virtue of its disposal or sale by the United States Government. “Plaintiff states that the United States Government did dispose of the 477 bales of cotton which was produced by the plaintiff, Paul Duncan, and according to their loan agreement, paid the net proceeds of said sale to the defendant, John Baxter.” The Government loan agreement, referred to in the foregoing quoted section of the complaint, was an exhibit, and has this language in it, signed and agreed to by Baxter as the producer: “4. The producer agrees that if any tenant or sharecropper has an interest in the cotton, such tenant or sharecropper will be paid his pro rata share of the proceeds of the loan and his pro rata share of any additional proceeds received from the cotton. ’ ’ Thus Duncan’s case was bottomed on the theory of an express trust growing out of the foregoing and last quoted language. I maintain that Duncan’s complaint showed on its face the essential of equity jurisdiction— that is, the enforcement of a trust. Equity has exclusive jurisdiction of trusts. Spradling v. Spradling, 101 Ark. 451, 142 S. W. 848; Ferguson v. Rogers, 129 Ark. 197, 195 S. W. 22; Blanton v. First National Bank, 136 Ark. 441, 206 S. W. 745; and Simpson v. Brooks, 208 Ark. 1093, 189 S. W. 2d 364. But when we examine Baxter’s answer and motion to transfer to equity, we find detailed allegations concerning the necessity of equitable intervention. Baxter had pleaded that Duncan entered into a full and complete settlement with him and released all of his interest in the government loan cotton, so in his answer and cross-complaint and motion to transfer to equity, Baxter made these detailed allegations: “That if Duncan in the face of his release and relinquishment to Baxter at the time of the mutual termination of their relationship has any claim against Baxter from the proceeds of the ultimate sale of the cotton, the receipt and release of Duncan executed by Dermott State Bank and Baxter should be cancelled and set aside for mutual mistake, and, Baxter be allowed to assert his claim against Duncan for the balance owing Baxter by Duncan to the extent of $12,865.62, together with interest. That only a Court of Equity can rescind and set aside the mutual agreement voluntarily executed and made between Baxter and Duncan at the termination of the landlord and tenant relationship, and, determine, impress or fix a lien for such unpaid advances to Duncan made by Baxter. That if Baxter is held to account to Duncan for any sums received by Baxter as Trustee for Duncan, his sharecroppers and Baxter, only a Court of Equity can declare the trust, fix the respective interests in said trust funds and impress Baxter’s lien to the extent of Baxter’s part in such proceeds, if any, for which Baxter is held to account. “That unless this cause is transferred to the Chancery Court, Baxter has no complete and adequate remedy at law to set aside for mutual mistake his receipt to Duncan which he executed at the termination of their relationship and for an accounting on sums due him by Duncan; for determination of the extent of his liability as a Trustee, if any, to Duncan, his tenants and himself; or, the recovery of $12,865.62 owing Baxter by Duncan and for which sum Baxter would be entitled to have a lien impressed in the nature of an equitable conversion on any money which may be determined Baxter may have received from thé United States Government as Trustee and for which he might be held to account to Duncan. ” Thus there were detailed allegations of the defenses of (a) recision because of mutual mistake, (b) the necessity of bringing in sharecroppers to have an accounting, and (c) the trust feature of the case. The significant fact is that when the case was transferred to equity, the Court did declare a trust in favor of some of the sharecroppers to the extent of $911.58; and that amount of money was paid by Baxter into the Registry of the Chancery Court. This certainly made a case for equity jurisdiction under the authorities previously cited in regard to exclusive equity jurisdiction in the matter of trusts. In the light of the foregoing, I respectfully dissent from the majority, which has held that this case should not have been transferred to equity. Justices Millwee and Ward join in this dissent.