(12) For the allowance of commission for the sale of the property to the receiver in addition to the compensation already allowed and paid him. and on June 21st R. A. Young was appointed | services before his appointment as receiver. receiver, and "was authorized to borrow money to meet the pay roll then due at the mine and pay the necessary expenses of preserving the property, and if, in his judgment, it was to the best interest of all parties, to operate the mine, employing union miners for that purpose." The company was indebted at the time of his appointment in the sum of $26,208.54. He operated the mine about eight months during the three years of the receivership before the property was sold, and borrowed money to pay the expenses of the operation, $7,000 being borrowed from the German National Bank, which was the principal creditor at the time of his appointment. He mined and sold coal during the operation of the mine to the amount of $23,594.16. The mine property was sold for $25,839.22. The receiver's report on June 1, 1912, covering the period of the receivership, showing the moneys received and paid out, is as follows: Recapitulation of Receipts. 134 89 1,235 53 24,864 53 17,460 05 $45,729 65 He later filed a supplementary report showing receipts, including the sale of the mine property, $25,839.22, and disbursements of $19,366.63, in which was an allowance of compensation to him as receiver of $4,000, and in which he claimed a commission of 15 per cent. on the sale of the mine, amounting to $3,852. ་ Appellant excepted to the different reports on several grounds some of which were sustained and the report was confirmed, and they appealed from the judgment of the court overruling certain exceptions, assigning as errors the following: (4) The court erred in not sustaining its objection to the item of $2,034.65, for which the receiver claimed credit as expenses when the money was used for his personal benefit. (5) In not charging the receiver with the amount lost in the operation of the mine. (6) In paying certain creditors in full; in effect, giving their claim preference and discriminating against the bank. (8) In the allowance of the claim for extra compensation for salary of bookkeeper in the sum of $1,776.65. (9) In the allowance of claim of Young for Hill, Brizzolara & Fitzhugh, of Ft. Smith, and Moore, Smith & Moore, of Little Rock, for appellant. R. W. McFarlane, of Greenwood, and Read & McDonough, of Ft. Smith, for appellee. KIRBY, J. (after stating the facts as above). This appeal is from a decree overruling exceptions to a report of a receiver and orders distributing assets in his hands. [1] The first contention noted is the allowance of $2,034.65 to the receiver as expenses, which was,.in fact, moneys used directly by the receiver as follows: "December 21, 1909, a check for $1,700 used to pay off his personal note. Another check is on April 25, 1910, for the same purpose, for $636.37; another for $413.21. He purchased for himself one mule at the mine, agreeing to pay therefor $100, and from this amount-$2,849.58-it was considered that the Greenwood Coal Company's account for $814.93 should be deducted, leaving a balance of $2,034.65." The receiver replied to the exception, and stated that the items above were for advances made to him personally, and contends that the money was drawn from the funds on hand for his personal use, and that his account showed that was part of his fees, and was not claimed as expenses of. the receivership. It is also claimed that the amount having been allowed by the court in its approval of the receiver's report of June 10, 1912, and not appealed from, is res judicata, These items and cannot be re-examined. show on such reports as were filed charged “R. A. Young, personal." It is true most of the parties interested understood, when agreeing that the receiver's compensation should be fixed at $4,000, that the said $2,034.65 had been used as expenses in the administration of the estate by the receiver, when, in fact, it was used, as stated above, for the receiver's personal benefit, and he claimed that in the agreement for the allowance of his compensation it was understood that he should have the $4,000 in addition to The court, however, is of the said sum. opinion that the preponderance of the testimony shows it was the intention and agreement to allow only $4,000 to the receiver for his entire services, and that that sum is a reasonable compensation therefor. He was receiver for several other concerns during the time of this receivership, was superintendent for another coal mining company during the whole period at a salary of $150 per month, and during no part of the period did he devote his whole time to the business of this receivership. The decision approving the allowance of the item $2,034.65, not having been appealed from after the allowance and confirmation of the report, cannot now be re-examined, it is true, but we are of the opinion that equity, good conscience, and jus- [ amount claimed as extra compensation for tice require that the $4,000 allowed as com- a bookkeeper of $2,575.41. The testimony pensation for the receiver must be reduced by shows that no complete set of books was kept said amount of $2,034.65 already paid him, by the bookkeeper, who was shown to have and that the court erred in not so reducing been a competent one, that he was a cashier it and making a final allowance of an amount of a bank, and kept books also for the Greensufficient with it to make the $4,000 compen-wood Coal Company, and did this work as he sation in all. [2] The receiver was given authority, if, in his judgment, he thought it to the best interest of the estate, to operate the coal mine, and proceeded to do so. It was shown that he was a capable and skilled superintendent or mine operator, and that he had operated the mine under adverse conditions, and in a reasonably careful and economical way, and that the loss was due more to bad labor conditions and dull times, in not being able to dispose of the product to advantage, than to any fault of the receiver, and we do not think the court erred in refusing to charge him with the amount lost in the operation of the mine. It was the duty of those interested, and they should have kept closely in touch with the receiver's proceedings and have objected to the further operation of the mine and had it discontinued if they did not think it would result to their benefit. They will not be heard now on the final settlement of the receivership of three years to complain that the mine was operated at a loss, and that the receiver, who seemed to have been given, and to have exercised, a free hand in its operation, shall be charged with the amount of the loss. Buster v. Mann, 69 Ark. 30, 62 S. W. 588. There is no need to sustain the sixth assignment. It appears that certain small amounts were paid to certain of the creditors of the company, but an examination shows that these amounts were for preferred claims, to the payment of which appellant only had the right to object that they should not have been paid until after it had received all the money it loaned the receiver with which to operate the mine. [3] He should not have paid off all the other indebtedness in full incurred by him for money borrowed for operating the mine, and only about 70 per cent. of the amount borrowed from the German National Bank during the receivership, but should have paid the claims for borrowed money used in the operation of the plant pro rata, if there was not enough to pay it all, and will be directed to pay said bank first and at once out of the moneys in his hands the balance due upon its claim for money loaned him as receiver before any other disbursement or distribution is made. [4] The eighth assignment is sustained. The claim for extra compensation for the bookkeeper should not have been allowed. The reports show the amount of $15 allowed monthly for a bookkeeper's services and the receiver's supplementary report shows an himself said "as a side line." The whole course of dealing shows that it was not contemplated that he should be paid more than $15 a month for the service, and the testimony shows that the service rendered was not worth more than that amount. The mine was only operated for about eight months during the whole three years for which he was paid $15 per month for keeping books. The whole claim for extra compensation should have been disallowed and the exception sustained, and the court erred in making the allowance of $1,776.65 on this claim. [5] With regard to assignment No. 9 we will not disturb the court's ruling. Young was a capable mining man and superintendent, was engaged at the mine for two months before it went into the hands of the receiver, and, as an employé, his claim was entitled to preference under section 4057, of Kirby's Digest, and the amount of $150 per month was agreed upon and not unreasonable for the service rendered. [6] Assignment No. 12 is also sustained. The court erred in allowing the receiver the commission of $1,540.80 upon the sale of the property. $4,000 had been agreed upon as a reasonable sum and allowed as compensation for his services as receiver, and the evidence shows that that was a reasonable amount for all services rendered by him, and the court erred in making any further allowance, and he must be charged again with the $1,540.80 so erroneously allowed. He will be charged and must account for the item of $2,034.65, as decided under the fourth assignment, with $1,776.65, amount erroneously allowed for extra compensation to the bookkeeper, as decided under the eighth assignment, and with the $1,540.80 erroneously allowed for commissions upon the sale of the property, as decided under assignment 12in all, with the sum of $5,352.10 additional. For the errors indicated, the judgment is reversed, and the cause remanded for further proceedings not inconsistent with this opinion. BAXTER COUNTY BANK v. COPELAND et al. (No. 158.) (Supreme Court of Arkansas. Oct. 12, 1914.) 1. BANKRUPTCY (§ 9*)-FEDERAL BANKRUPTCY ACT-EFFECT. The federal Bankruptcy Act July 1, 1898, c. 541, 30 Stat. 544 (U. S. Comp. St. 1901, p. 3418), superseded state insolvency laws (Laws 1897, p. 115) in so far as they relate to the same subject-matter and affect the same persons; hence state courts should not assume ju For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes. risdiction of a general assignment for credi- | Baxter county; that Copeland had executed tors within four months after the date of the assignment. [Ed. Note. For other cases, see Bankruptcy, Cent. Dig. 88 7-9; Dec. Dig. § 9.*] 2. APPEAL AND ERROR (§ 1026*)-REVIEWHARMLESS ERROR. The error of the state court in assuming jurisdiction to administer the assets of an insolvent, under a general assignment, is not prejudicial, where there was nothing to show that the assignment was made for the purpose of hindering, delaying, or defrauding the insol vent's creditors. [Ed. Note.-For other cases, see Error, Cent. Dig. §§ 4029, 4030; 1026.*] Appeal and 3. FRAUDULENT CONVEYANCES (§ 51*)-PROPERTY EXEMPT-DISPOSAL. Where an insolvent person trades exempt property for land, taking title in his wife, the transaction is not open to attack by his creditors. [Ed. Note. For other cases, see Fraudulent Conveyances, Cent. Dig. 88 114-117; Dec. Dig. § 51.*] 4. Appeal and ERROR (§ 1149*)-DETERMINA TION-CORRECTION OF ERRORS. As an equity case is heard de novo on appeal, a mere clerical error, whereby an insufficient judgment was rendered for plaintiff against one of the defendants, will be corrected. [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 4483-4496; Dec. Dig. § 1149.*] Appeal from Marion Chancery Court; Geo. T. Humphries, Chancellor. Action by the Baxter County Bank against J. C. Copeland and others, consolidated with insolvency proceedings had upon the named defendants' general assignment. From the decrees, plaintiff appeals. Modified and af firmed. to one Gallup two promissory notes in the sum of $114.90 each, which Gallup had, for value and before maturity, transferred to the bank. It alleged: "That Copeland is wholly insolvent and has recently traded off a large amount of his personal property to one Henry Browning for certain lots in the town of Cotter; that he caused Henry Browning to convey said property to Lula B. Copeland, wife of J. C. Copeland, for the purpose of hindering and delaying his creditors and placing the same beyond the reach of his creditors, among whom was the plaintiff; that J. C. and defrauding his creditors, transferred to T. Copeland, for the purpose of hindering, delaying, L. Bond and A. G. Thompson a large amount of personal property by voluntary transfer, wholly without consideration, and that said Copeland still remains the owner thereof, and of the land described; that Copeland is insolvent, and that his debts exceed the sum of $1,000." The complaint prayed that a receiver be appointed to take possession of the goods in the hands of T. L. Bond and A. G. Thompson and safely keep the same pending suit, and that Copeland be declared the beneficial owner of the real property deeded to his wife, Lula B. Copeland, by Browning, and that the same be subjected to the plaintiff's debt, and it prayed for judgment on the notes. Appellees J. C. Copeland and Lula B. Copeland answered the complaint, admitting that the personal property claimed by them as exempt was traded for the town lots, as set forth in the complaint, and that the title was taken in the name of Lula B. Copeland, but denied that this was done to hinder or defraud creditors. They alleged that the property traded for the town lots was exempt and had been scheduled and set apart as exempt property in J. C. Copeland's deed of assignment; that the deed was taken in his wife's name in good faith and for a valuable consideration; that Lula B. Copeland has fur $500 in cash; and that this was the consideration for the deed to her. J. C. Copeland, an insolvent merchant of Marion county, Ark., on the 4th day of January, 1913, executed a general deed of assignment for the benefit of creditors, naming T.nished the said J. C. Copeland the sum of L. Bond as assignee. The deed included all of his property, except certain articles of personal property, described in the schedule attached, which he claimed as exempt. The deed specified that the assignee, after filing the inventory of the property described in the deed and making the bond required by law, should administer the assets under the directions of the chancery court in conformity with the statutes. The deed was filed with the clerk of the Marion chancery court on the 8th day of January, 1913, and the assignee took possession of the property. Copeland thereafter moved to Baxter county and traded the personal property scheduled as exempt for town lots in Cotter, Baxter county, to one Browning, and had the deed to the lots made to his wife. On the 20th day of March, 1913, the Baxter County Bank instituted suit against Copeland and his wife and Browning and T. L. Bond and A. G. Thompson in Baxter chancery court. It set up in its complaint that Copeland and his wife were then residents of In the Marion chancery court an ex parte petition was filed at the April term, 1913, by certain creditors of J. C. Copeland, in which they alleged the execution of the deed of assignment by Copeland and the proceedings thereunder, to wit, that Bond, the assignee, had taken possession of the property mentioned, and that, after taking possession of the same, a receiver was appointed by the chancery court of Baxter county, who, under the orders of the chancery court, had taken the property from the possession of T. L. Bond; that the Baxter chancery court had decreed that, when the Marion chancery court took jurisdiction of the property for the purpose of administering the same under the assignment, said goods and property should be returned to the jurisdiction of that court. It set up that the assignee named in the deed had failed to qualify; that the Marion chancery court took jurisdiction and appointed a trustee in his stead. For other cases see same topic and section NUMBER in De: Dig. & Am. Dig. Key-No. Series & Rep'r Indexes The Baxter County Bank appeared special-ed in Schedule A, and which the said Copeland ly to this petition and objected to the Marion chancery court taking jurisdiction. It set up that Copeland was indebted to it and was indebted generally in a sum exceeding $1,500; that the assignment was void; and that the law pertaining to general assignments for the benefit of creditors, to be administered in the chancery court, was inoperative. It alleged that it had a suit pending in the Baxter chancery court against Copeland, and that said court had ample power and jurisdiction to adjudicate all the matters involved. The Marion chancery court overruled the bank's objection to its jurisdiction, and assumed jurisdiction to administer the personal estate mentioned in the deed of assignment of Copeland, and appointed a trustee. From this order of the Marion chancery court, the bank appealed. Thereafter, at the October term, 1913, of the Baxter chancery court, the court dismissed the complaint of the bank as to the personal property and as to the receivership, for the reason that the Marion chancery court had assumed jurisdiction to administer the personal estate and had appointed a trustee to take charge of the same. The Baxter chancery court, after a further hearing of the cause upon the pleadings, the deposition of Copeland, and the agreed statement of facts, entered the following finding: "That Lula B. Copeland has title to the town lots in controversy; that defendant J. C. Copeland is indebted to the plaintiff for the debt sued for." And the court entered a decree in favor of the bank for $114.90, the principal of said note, and for the additional sum of $25.38 interest thereon, and entered a decree quieting the title to the lots in controversy in Lula B. Copeland. Appellant duly prosecutes these appeals from the decrees of the Marion and the Baxter chancery courts. The causes are consolidated for convenience in the hearing. The agreed statement of facts used in both the Marion and the Baxter chancery courts is as follows: "It is agreed: That on and prior to the 4th day of January, 1914, J. C. Copeland, one of the defendants herein, was engaged in the mer cantile business in Marion county, Ark., and was, at and prior to said date, a resident of said Marion county. That, in pursuing the said business, the said J. C. Copeland became involved, contracting a large amount of indebtedness that he was unable to pay, among other indebtedness the two notes of $114 each to H. H. Gallup, and by him assigned to Baxter County Bank. That on the 4th day of January, 1913, while the said J. C. Copeland was a resident of said Marion county, and while his entire stock of merchandise was situated in said Marion county, Ark., he executed, acknowledged, and delivered to the defendant T. L. Bond the following instrument of writing: [Reference is here made to the deed of assignment.] That the said T. L. Bond on the 8th day of January, 1913, caused said instrument of writing to be filed with the clerk of the Marion chancery court, and at once took possession of the entire stock of merchandise belonging to the said Copeland, except that portion of said stock list claimed as exempted to him under the laws of the state of Arkansas. That the property alleged to have been sold by the defendant Copeland to the defendant Browning were the goods described in Schedule A to the above deed. That all of the stock of goods mentioned in said deed, except those sold to the defendant Browning, were, at and all times prior to the institution of this suit, in Marion county, Ark., and were. at the time of the appointment of the receiver therein, in the possession of the said T. L. Bond, through his agent, A. G. Thompson. That the receiver heretofore appointed by this court has taken possession of the said property and is now in possession thereof. T. L. Bond has made filed said inventory nor executed bond as proan inventory of the said property, but has not vided by law as such trustee. That the chancery court of Marion county has never taken any steps therein, nor made any orders in relation to said assignment, and has never assumed any jurisdiction thereof, unless the mere making of the said deed by Copeland and the filing of the same by Bond is to be construed as giving Marion county been in session since execution jurisdiction, nor has the said chancery court of and filing of the said deed. That all of the parties to said deed were, at the time of the execu tion thereof, residents of Marion county. That the inventory attached to the receiver's report herein is the inventory made by the said T. L. Bond, trustee. That, at the time of the commencement of this action, the defendant J. C. and both J. C. Copeland and Lula B. Copeland Copeland was a resident of Baxter county, Ark., were served with summons in this action by the sheriff of Baxter county, in Baxter county." Allyn Smith, of Cotter, for appellant. Z. M. Horton, of Mountain Home, and Gus Seawel and Sam Williams, both of Yellville, for appellee. WOOD, J. (after stating the facts as above). [1] The chancery court of Marion county had no jurisdiction to administer the estate of J. C. Copeland under the general deed of assignment. The state insolvency act of June 26, 1897 (Laws 1897, p. 115), was superseded by the bankruptcy act of Congress of July 1, 1898, in so far as they relate to the same subject-matter and affect the same persons, as was held in Hickman v. Parlin-Orendorff Co., 88 Ark. 519, 115 S. W. 371. See, also, Roberts Cotton Oil Co. v. F. E. Morse, 97 Ark. 513, 135 S. W. 334. An attack was made by appellant on this deed of assignment by its objection to the Marion chancery court, assuming jurisdiction to administer the assets under this insolvency act within four months after the deed of assignment. The Marion chancery court therefore erred in assuming jurisdiction to administer the personal assets of the estate under this deed of assignment. and the chancery court of Baxter county erred in holding that the Marion chancery court had such jurisdiction. [2, 3] It appears from the pleadings and agreed statement of facts that these errors were not prejudicial to appellant. The appellant does not allege nor show facts sufficient to show that the deed of assignment was made for the purpose of hindering, delaying, or defrauding Copeland's creditors. FENSES. Whenever a defendant can maintain a cross-action for damages occasioned by plaintiff's noncompliance with his part of the contract, he may, in an action upon a note given in consequence of the contract, set up such claim as a defense. Notes, Cent. Dig. §§ 1342, 1343, 1365, 1366; [Ed. Note.-For other cases, see Bills and Dec. Dig. § 451.*] Mere general allegations to that effect are | 2. BILLS AND NOTES ($ 451*)-ACTIONS-DEnot sufficient. Appellant does not set up any facts tending to show fraud. The allegations of its complaint as to the transfer of personal property for the lots therein mentioned and the taking of the title to those lots in Lula B. Copeland are not sufficient to show fraud in this transaction, and the agreed statement of facts shows that the creditors had no right to complain of this, for the personal property transferred was exempt. Copeland and his wife had a right to make such disposition of that property as they pleased. The creditors of Copeland could not subject such property to the payment of their debts. See Sims v. Phillips, 54 Ark. 193, 15 S. W. 461; Clark v. Edwards, 57 Ark. 331, 21 S. W. 477: King v. Hargadine Co., 60 Ark. 1, 28 S. W. 514. The chancery court did not err, therefore, in holding that the title to the lots in controversy was in Lula B. Copeland and in quieting her title. The proof fails to show any fraud on the part of appellee J. C. Copeland in making the deed of assignment. [4] Under the pleadings and the agreed statement of facts, the chancery court should have entered a judgment in favor of the appellant bank for the additional sum of $114.90, with interest. The undisputed facts show that this amount was also due the appellant, and the court should have entered a decree for that sum, and doubtless would have done so, had a specific request been made for such judgment. The failure to enter such judgment was in the nature of a clerical misprision, and, as the trial is de novo, this court will enter such judgment as the chancery court should have entered upon the undisputed facts of the record. See Greenlee v. Rowland, 85 Ark. 101, 107 S. W. 193. The decree of the Baxter chancery court is modified and affirmed, and judgment will be entered here in favor of the appellant for the additional sum of $114.90, with interest at 10 per cent. per annum from August 6, 1912. As it is manifest that the chancery court would have rendered judgment for this sum had its attention been called to the oversight at the time its decree was entered of record, appellant is not entitled to the costs of this appeal, and judgment for costs will be in favor of the appellees. 3. CONTRACTS (§ 305*)-ACTIONS-BREACH. Where a landowner, who knew little about wells, accepted one dug by plaintiff, relying upon his superior knowledge and skill, such acan action on a note for the price of digging the ceptance does not preclude the landowner, in well, from setting up that the well was not properly constructed." [Ed. Note.-For other cases, see Contracts, Cent. Dig. 88 1398, 1399, 1400, 1463, 1464, 1467 1475; Dec. Dig. § 305.*] 4. HUSBAND AND WIFE (§ 238*)-ACTIONSVERDICT-JUDGMENT. In an action against a husband and wife on a note for the price of digging a well, where the defense of both was failure of consideration, judgment should be rendered in favor of both. where the jury found in favor of the husband alone, for the consideration must have failed as to both if to one. [Ed. Note.-For other cases, see Husband and 5. HUSBAND AND WIFE (§ 85*) MARRIED A married woman is not liable on a note executed jointly with her husband, where it was not given with reference to or for the benefit of her separate estate. [Ed. Note.-For other cases, see Husband and Wife, Cent.Dig. §§ 333, 336-341; Dec. Dig. § 85.*] Appeal from Circuit Court, Randolph County; C. H. Henderson, Special Judge. Suit by George Dutton against George W. Million and another. From a judgment for defendants, plaintiff appeals. Affirmed. George Dutton, pro se. Thos. W. Campbell, of Pocahontas, for appellees. MCCULLOCH, C. J. This is an action instituted before a justice of the peace of Randolph county by the plaintiff, George Dutton, against the defendants, George W. Million and his wife, Florence Million, to recover the balance of a promissory note executed by the defendants to plaintiff for a part of the price for digging a well. The case was appealed to the circuit court, and the trial there resulted in a verdict and judgment in favor of the defendants. [1] The plaintiff was engaged in the business of digging wells and entered into a conDUTTON v. MILLION et al. (No. 153.) tract with defendant George W. Million to (Supreme Court of Arkansas. Oct. 12, 1914.) dig and curb a well on the latter's farm. Ac1. CONTRACTS (§ 323*)-FAILURE OF CONSID-cording to the terms of the contract, the ERATION-ACTIONS-QUESTION FOR JURY. In a suit on a note given as part of the plaintiff was to receive a certain price per price for digging a well, the question whether foot for digging and curbing the well, and there was a failure of consideration because that he "guaranteed that he would get wathe well was not properly constructed held un- ter." When the well was completed, the agder the evidence for the jury. gregate price was found to be $120, and the defendant George W. Million paid the plaintiff the sum of $25 in cash and executed the [Ed. Note. For other cases, see Contracts, Cent. Dig. §§ 1311, 1349. 1466, 1543-1548, 1827, 18272: Dec. Dig. § 323.*] For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes |