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Civil Procedure Keyed to Field
Chicot County Drainage District v. Baxter State Bank
Facts
The Chicot County Drainage District (Defendant) filed for bankruptcy based upon outstanding bonds and other debts. The trial court acted on the bankruptcy action and held a hearing on the matter. Plaintiff, as a bondholder, was a party to this hearing. As a result of the hearing, the court ordered the bonds to be readjusted and new bonds to be issued. The statute that had allowed this readjustment was later declared unconstitutional. Plaintiff then sued to recover under the old bonds, arguing that res judicata did not bar the suit because the statute had since been declared unconstitutional. Defendant argued that Plaintiff’s failure to challenge the constitutionality of the statute in the earlier action barred the new suit. The court found for Plaintiff and the court of appeals affirmed. The Supreme Court granted certiorari.
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