Drum v. McDaniel

222 S.W.2d 59, 215 Ark. 690, 1949 Ark. LEXIS 810
CourtSupreme Court of Arkansas
DecidedJuly 4, 1949
Docket4-8938
StatusPublished
Cited by4 cases

This text of 222 S.W.2d 59 (Drum v. McDaniel) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Drum v. McDaniel, 222 S.W.2d 59, 215 Ark. 690, 1949 Ark. LEXIS 810 (Ark. 1949).

Opinion

Minor W. Millwee, Justice.

This appeal involves venue of a suit in the nature of a bill of interpleader filed by appellants, Roy A. Drum and William K. Ward, trustee, against appellees, Charles E. McDaniel, M. B. Morgan and Ava Morgan, in the Pulaski Chancery Court.

The pleading's and exhibits reflect that the Morgans owned and operated the M. B. Morgan Ice Co. at Clarksville, Johnson county, Arkansas, on July 24, 1948, when they entered into a written contract with appellant, R. A. Drum, or his nominee, for sale of the business which included a lease contract held by the Morgans on the land and improvements thereon and certain personal property used in the business. The contract provided for a sale price of $27,500 with $22,500 payable upon the buyer’s approval of title and execution by the seller of an assignment of said lease and a hill of sale covering the personal property. The contract further provided that the balance of the purchase price of $5,000 should be held by appellants until October 1, 1948, when it should be paid to the Morgans unless lien claims were then pending against the property in which event appellants should continue to hold said sum until all such claims were settled, or otherwise disposed of.

Pursuant to the provisions of the contract, the lease on the real property was assigned to appellant "Ward, trustee, on July 28, 1948, and on the same date the Morgans by hill of sale delivered to Ward all the. personal property described in the contract, and all of the purchase price was paid except the $5,000 which was withheld for the purpose above mentioned.

On September 21, 1948, appellee, Charles E. McDaniel, a Clarksville building contractor, filed a mechanic’s lien in the office of the circuit clerk of Johnson county in the sum of $4,026.92 for labor and materials used in the construction of the building housing the ice business. The complaint further alleges: “ Plaintiffs further state that the said defendants, M. B. Morgan and Ava Morgan, dispute and deny the validity and legality of said lien claim and the indebtedness asserted against them by the said defendant, McDaniel, and have demanded that plaintiffs forthwith pay the balance of said purchase price, amounting to the sum of $5,000, as aforesaid, and are threatening to institute legal proceedings against plaintiffs for recovery thereof. Plaintiffs state that the said McDaniel has not commenced suit to foreclose Ms alleged lien and that they are unable to determine the validity and legality of the said disputed claims; that while they are indebted to the said defendants, M. B. Morgan and Ava Morgan for the said sum of $5,000, as balance of. the purchase price of said property, they cannot pay the same voluntarily without being subject to litigation, costs and expenses and to risk and liability of having said lien claim adjudged to be a valid, -subsisting and legal lien against said described property, and they cannot safely refuse to pay the same as demanded, without risk, liability and judgment against them if the said asserted mechanic’s lien claim is in fact and law invalid, illegal or unenforceable.

. “The said defendants are adverse claimants to the said sum of money .or said property, and plaintiffs are entitled by this bill of interpleader to deposit said sum of $5,000 in the registry of this Court, to he disbursed to the lawful owners by order of this court, and when this is done an order should be entered herein releasing and discharging the plaintiffs, and their said property, of all liability to said defendants, and that the said McDaniels should be permanently enjoined and restrained from commencing and prosecuting suit on said lien claim in the court or courts of Johnson county to foreclose said lien. ”

Appellants prayed in their complaint that they be directed to deposit the $5,000 into the registry of the court and thereupon released from all liability to appellees and that appellee McDaniel he permanently enjoined from asserting a lien on the property or prosecuting suit in the courts of Johnson county for foreclosure of his lien or otherwise subjecting said property to payment of his lien claim. Summons was served on the Morgans in Pulaski county where they resided on October 25, 1948, and on McDaniel in Johnson county on November 5,1948.

On November 26, 1948, appellee McDaniel filed separate motion to dismiss as to him on the ground of improper venue asserting that the complaint shows on its face that venue of the action is in Johnson county. On December 1, 1948, appellees Morgan filed their separate answer and cross-complaint in which they admitted generally the allegations of the complaint and adopted same .as their own pleading, but specifically denied the validity of the lien claim filed by McDaniel and asserted that he had been paid in full for construction of the building. They asked for judgment against appellants for the $5,000 balance of the purchase money and prayed that a lien be declared for'this amount on any funds deposited in court by appellants.

On March 15, 1949, the trial court sustained the motion of appellee McDaniel to dismiss for improper venue and denied the prayer of appellees Morgan for judgment against appellants. Appellants have appealed from the action of the court in dismissing the suit as to McDaniel and appellees Morgan have cross-appealed from that part of the decree denying judgment in their favor against appellants.

■ Appellants insist that venue of the suit was properly laid in Pulaski county under Ark. Stats. (1947), § 27-816 (§ 1 of Act 141 of 1943) which provides: “Where there are two or more adverse claimants to money or property, the person, firm or corporation or association having custody thereof may file a bill of interpleader in the chancery court of any county in which one of the claimants resides or may be served with summons and upon depositing the money or property in the registry of the court, the court shall enter an order releasing and discharging the plaintiff from all liability; and the plaintiff shall recover all of his or its costs and a reasonable attorney’s fee to be fixed by the court and taxed as costs in.such suit.”

Appellants say this statute superseded any former venue statute applying to an interpleader suit and, therefore, authorized the instant proceeding to be brought in Pulaski* county where the Morgans reside.

. Ark. Stats. (1947), § 51-615, provides that all liens created by virtue of the Mechanics’ and Materialmen’s Lien Act shall be enforced in the circuit court of the county wherein the property on which the lien is attached is situated. This court has repeatedly held that chancery court has jurisdiction to foreclose such liens. Kizer Lumber Co. v. Mosely, 56 Ark. 516, 20 S. W. 409; Martin v. Blytheville Water Co., 115 Ark. 230, 170 S. W. 1019. A leasehold interest or estate is made subject to a mechanic’s lien by § 51-606 of the statute.

The first and third sub-divisions of Ark. Stats. (1947), § 27-601, provide that suits “for the recovery of real property” or “for the sale of real property under a mortgage, lien or other encumbrance or charge” must be brought in the county where the subject of the action or some part thereof is situated. In Harris v. Smith, 133 Ark. 250, 202 S. W.

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Cite This Page — Counsel Stack

Bluebook (online)
222 S.W.2d 59, 215 Ark. 690, 1949 Ark. LEXIS 810, Counsel Stack Legal Research, https://law.counselstack.com/opinion/drum-v-mcdaniel-ark-1949.