Blanton v. Jonesboro Building & Loan Ass'n

Hart, C. J., (after stating the facts). The title was acquired by the drainage district when the land was struck off to it in April, 1924, and the deed was made to the board of directors of the drainage district by the commissioner who made- the sale. There was a valid decree of foreclosure for the nonpayment of drainage taxes, and the statute was in all respects complied with by the commissioner who made the sale, and the conveyance in pursuance thereof to the board of directors was a valid one. The drainage district was organized under a special act passed by the Legislature of 1917. Acts 1917, vol. 1, page 1053. The suit was instituted by the district against Gausey, as owner of the land, for the nonpayment of drainage taxes, in accordance with § 28 of the act. When the land was sold under the decree, the board of directors of the drainage district became the purchaser thereof. Section 28 provides that, where lands are offered for sale as provided by the act, and the amount of the taxes due, with interest, costs and penalty, is not bid at the sale, the commissioner shall bid the land in in the name of said board of directors of said drainage district for the whole amount due as aforesaid. The section further provides that the commissioner shall then execute his deed thereto as in other cases under this act, conveying such land to such drainage district, and that such deed, when duly executed in conformity to the provisions of the act, and recorded, shall be received as evidence in all cases, showing an indefeasible title in said purchaser, unassailable in law or in equity. In Douglass v. Lewis, 131 U. S. 45, 9 S. Ct. 634, 33 L. ed. 53, it was said that a covenant that the grantee is seized of an indefeasible estate in fee simple is a covenant for a perfect title. Hence, under the provision of the statute just referred to, the drainage district acquired an absolute title to the land after the period of redemption provided by the statute had expired. While there is no express provision authorizing the drainage district to sell lands acquired by it in this manner, we think the power to sell arises by necessary implication. It would seem that there would be no use in providing that the district should have an absolute title to lands purchased by it for the nonpayment of drainage assessments if they could not sell the lands in aid of the drainage work. The drainage board was an involuntary quasi corporation created to construct a public work, authorized to procure the means to accomplish the improvement by the imposition of assessments upon private property. It was a governmental agency existing- for a public purpose, and, while it could hold no real estate in a proprietary sense, it was empowered to bid in the land at a public sale for the nonpayment of drainage assessments and to acquire an absolute .title, thereto, and this, we-think, by necessary implication, gave power to resell the lands for the purpose of acquiring funds for the prosecution of the drainage work. This view receives support from the following cases: Altheimer v. Board of Directors Plum Bayou Levee Dist., 79 Ark. 229, 96 S. W. 140; Board of Directors St. Francis Levee District v. Fleming, 93 Ark. 490, 125 S. W. 132, 659; and Chicago Mill & Lumber Co. v. Drainage Dist. No. 17, 172 Ark. 1059, 291 S. W. 810. It is next contended that no valid contract was made with Bay by the district for the purchase of the land. We have copied the letters written by the attorneys of Bay and the replies of the secretary of the drainage district thereto. In these letters the terms of the contract are plainly set out. The names of the contracting parties are given, there is a proper description of the lot to be sold, and the price and method of payment are given. This constituted a valid contract which might be specifically enforced between private parties. Moore v. Exelby, 170 Ark. 908, 281 S. W. 671. We can see no reason why the doctrine of specific performance should not apply to a drainage district. But it is contended that Shelton had no power to make the contract, and reliance is placed upon the case of St. Francis Levee District v. Cottonwood Lumber Company, 86 Ark. 221, 110 S. W. 805, and Ritter v. Board of Directors of St. Francis Levee District, 128 Ark. 324, 194 S. W. 13. We do not think these cases apply. In the first case it was held that the district was not bound by the unauthorized promise of the secretary of the board. The same holding’ was made in the latter case with regard to the unauthorized act of the president. The court held that, while he had authority, under the statute, to make the deed, he had no power to enter into a covenant to refund the purchase price if the title failed, and that he could not execute a deed with covenants of warranty. Quite a different situation confronts us here. The secretary of the board testified that it was his custom to act for the board in making contracts for the redemption of the land or the repurchase of it by the owner or by •those interested in it. He said that it was the custom to give a preferential right to the owner. It is fairly inferable from his testimony, which is not contradicted, that he had the power to enter into ia contract on behalf of the board for lands which had been sold to it under foreclosure proceedings for the nonpayment of the drainage assessments. Of course, in all cases the deed would be executed by the board of directors of the drainage district in whom was the legal title. This court has .held repeatedly, however, that it is not necessary that authority to sell and make a binding contract for the sale of land should be in writing. The reason is that a contract employing an agent to find a purchaser of land is not within the statute of frauds. Moore v. Exelby, 170 Ark. 908, 281 S. W. 671, and cases cited. The rule announced in these cases would also govern the power of the attorneys of Ray to execute a contract for him. According to the testimony of Ray and of one of his attorneys, he had placed the matter in their hands for the purpose of redeeming the lot in question from the sale for drainage taxes, or in some way acquiring the title of the drainage district to it, in order that he might subject it to the payment of his mortgage. It was realized that the lot was worth more than the amount of the drainage district tax, interest and costs. Hence we think the record shows that the attorneys of Ray had a right to make a binding contract for the sale of said lot to Ray and that the secretary of the district had a right to make a binding contract for it. The letters on their face purport to be a completed contract, and became enforceable as a written agreement before tbe quitclaim deed to Blanton was executed. The record shows that Blanton purchased the lot with notice of the outstanding contract made by the secretary of the drainage district with Ray. Indeed, this is how came Blanton to purchase the lot. The secretary of the drainage district told him about the letters he had written to Ray, and Blanton persuaded Causey to ask the board of directors of the drainage district to execute a deed to Blanton, and the latter, having notice of the contract of Ray, acquired no better title to the lot than the drainage district in whose shoes he stands. Vance v. Newman, 72 Ark. 359, 80 S.W. 574, 105 Am. St. Rep. 42; and Adams v. Rhodes, 143 Ark. 172, 220 S. W. 29. In the latter case it was expressly held that, where a 'defendant had contracted to sell land to the plaintiff, a third person who purchased the land with notice of his rights is not an innocent purchaser, and -plaintiff is entitled to specific performance as against him. The result of our views is that the decree of-the chancery court was correct, and it will be affirmed.