Page images
PDF
EPUB

and on June 21st R. A. Young was appointed services before his appointment as receiver. receiver, and “was authorized to borrow (12) For the allowance of commission for money to meet the pay roll then due at the the sale of the property to the receiver in mine and pay the necessary expenses of pre- addition to the compensation already allowed serving the property, and if, in his judgment, and paid him. it was to the best interest of all parties, to

Hill, Brizzolara & Fitzhugh, of Ft. Smith, operate the mine, employing union miners for and Moore, Smith & Moore,. of Little Rock, that purpose.”

for appellant. R. W. McFarlane, of GreenThe company was indebted at the time of wood, and Read & McDonough, of Ft. Smith, his appointment in the sum of $26,208.54.

for appellee. He operated the mine about eight months during the three years of the receivership before

KIRBY, J. (after stating the facts as the property was sold, and borrowed money above). This appeal is from a decree overto pay the expenses of the operation, $7,000 ruling exceptions to a report of a receiver being borrowed from the German National and orders distributing assets in his hands. Bank, which was the principal creditor at the

[1] The first contention noted is the allowtime of his appointment. He mined and sold ance of $2,034.65 to the receiver as expenses, coal during the operation of the mine to the which was,.in fact, moneys used directly by amount of $23,594.16. The mine property was the receiver as follows: sold for $25,839.22. The receiver's report on

“December 21, 1909, a check for $1,700 used June 1, 1912, covering the period of the re to pay off his personal note. Another check ceivership, showing the moneys received and is on April 25, 1910, for the same purpose, for paid out, is as follows:

$636.37; another for $413.21. He purchased

for himself one mule at the mine, agreeing to Recapitulation of Receipts.

pay therefor $100, and from this amount-$2,

849.58%it was considered that the Greenwood Loans from banks..

. $21,700 00 Coal Company's account for $814.93 should be Sales of coal.

23,594 16 deducted, leaving a balance of $2,034.65." Sale of mine mules.

500 00 Incidentals

64 72

The receiver replied to the exception, and

stated that the items above were for ad

45,658 88 vances made to him personally, and contends Sebastian County Bank.

77 86

that the money was drawn from the funds on 45,736 74 hand for his personal use, and that his ac

count showed that was part of his fees, and Recapitulation of Disbursements.

was not claimed as expenses of.the receiverR. A. Young (personal).

.$ 2,034 65

ship. It is also claimed that the amount Sebastian County Bank, interest on overdraft

134 89 having been allowed by the court in its apTaxes 1909, 1910, 1911.

1,235 53 proval of the receiver's report of June 10, Pay roll..

24,864 53

1912, and not appealed from, is res judicata, Operating expenses, notes, and interest

17,460 05 and cannot be re-examined. These items

show on such reports as were filed charged

$45,729 65 “R. A. Young, personal.” It is true most of He later filed a supplementary report show the parties interested understood, when ing receipts, including the sale of the mine agreeing that the receiver's compensation property, $25,839.22, and disbursements of should be fixed at $4,000, that the said $2,$19,366.63, in which was an allowance of com- 034.65 had been used as expenses in the adpensation to him as receiver of $4,000, and in ministration of the estate by the receiver, which he claimed a commission of 15 per cent. when, in fact, it was used, as stated above, on the sale of the mine, amounting to $3,- for the receiver's personal benefit, and he 852.

claimed that in the agreement for the allow- . Appellant excepted to the different reports ance of his compensation it was understood on several grounds some of which were sus- that he should have the $4,000 in addition to tained and the report was confirmed, and said sum. The court, however, is of the they appealed from the judgment of the court opinion that the preponderance of the testioverruling certain exceptions, assigning as mony shows it was the intention and agree. errors the following:

ment to allow only $4,000 to the receiver for (4) The court erred in not sustaining its ob- his entire services, and that that sum is a jection to the item of $2,034.65, for which reasonable compensation therefor. He was the receiver claimed credit as expenses when receiver for several other concerns during the money was used for his personal benefit. the time of this receivership, was superin

(5) In not charging the receiver with the tendent for another coal mining company amount lost in the operation of the mine. during the whole period at a salary of $150

(6) Ip paying certain creditors in full; in per month, and during no part of the period effect, giving their claim preference and dis- did he devote his whole time to the business criminating against the bank.

of this receivership. The decision approving (8) In the allowance of the claim for extra the allowance of the item $2,034.65, not havcompensation for salary of bookkeeper in the ing been appealed from after the allowance sum of $1,776.65.

and confirmation of the report, cannot now

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.

himself said “as a side line." The whole [2] The receiver was given authority, if, course of dealing shows that it was not conin his judgment, he thought it to the best templated that he should be paid more than interest of the estate, to operate the coal $15 a month for the service, and the testimine, and proceeded to do so. It was shown mony shows that the service rendered was that he was a capable and skilled superin- not worth more than that amount. The tendent or mine operator, and that he had mine was only operated for about eight operated the mine under adverse conditions, months during the whole three years for and in a reasonably careful and economical which he was paid $15 per month for keeping way, and that the loss was due more to bad books. The whole claim for extra compensalabor conditions and dull times, iņ not being tion should have been disallowed and the exable to dispose of the product to advantage, ception sustained, and the court erred in than to any fault of the receiver, and we do making the allowance of $1,776.65 on this not think the court erred in refusing to charge claim. him with the amount lost in the operation [5] With regard to assignment No. 9 we of the mine. It was the duty of those inter- will not disturb the court's ruling. Young ested, and they should have kept closely in was a capable mining man and superintendtouch with the receiver's proceedings and ent, was engaged at the mine for two months have objected to the further operation of the before it went into the hands of the receiver, mine and had it discontinued if they did not and, as an employé, his claim was entitled think it would result to their benefit. They to preference under section 4057, of Kirby's will not be heard now on the final settlement Digest, and the amount of $150 per month of the receivership of three years to com- was agreed upon and not unreasonable for plain that the mine was operated at a loss, the service rendered. and that the receiver, who seemed to have [6] Assignment No. 12 is also sustained. been given, and to have exercised, a free The court erred in allowing the receiver the hand in its operation, shall be charged with commission of $1,540.80 upon the sale of the the amount of the loss. Buster v. Mann, 69 property. $4,000 had been agreed upon as a Ark. 30, 62 S. W. 588.

reasonable sum and allowed as compensation There is no need to sustain the sixth as- for his services as receiver, and the evidence signment. It appears that certain small shows that that was a reasonable amount amounts were paid to certain of the creditors for all services rendered by him, and the of the company, but an examination shows court erred in making any further allowance, that these amounts

for preferred and he must be charged again with the $1,claims, to the payment of which appellant 510.80 so erroneously allowed. He will be only had the right to object that they should charged and must account for the item of not have been paid until after it had received $2,034.65, as decided under the fourth assignall the money it loaned the receiver with ment, with $1,776.65, amount erroneously alwhich to operate the mine.

lowed for extra compensation to the book[3] He should not have paid off all the keeper, as decided under the eighth assignother indebtedness in full incurred by himment, and with the $1,540.80 erroneously al'for money borrowed for operating the mine, lowed for commissions upon the sale of the and only about 70 per cent. of the amount property, as decided under assignment 12borrowed from the German National Bank in all, with the sum of $5,352.10 additional. during the receivership, but should have paid

For the errors indicated, the judgment is the claims for borrowed money used in the reversed, and the cause remanded for furoperation of the plant pro rata, if there was ther proceedings not inconsistent with this not enough to pay it all, and will be directed opinion, to pay said bank first and at once out of the moneys in his hands the balance due upon BAXTER COUNTY BANK v. COPELAND its claim for money loaned him as receiver

et al. (No. 158.) before any other disbursement or distribution (Supreme Court of Arkansas. Oct. 12, 1914.) is made.

1. BANKRUPTCY (8 9*)-FEDERAL BANKBUPT[4] The eighth assignment is sustained.

CY ACT-EFFECT. The claim for extra compensation for the The federal Bankruptcy Act July 1, 1898, c. bookkeeper should not have been allowed. 541, 30 Stat. 544 (U. $. Comp. št. 1901, p. The reports show the amount of $15 allowed 1897, p. 115) in so far as they relate to the

3418), superseded state insolvency laws (Laws monthly for a bookkeeper's services and the same subject-matter and affect the same per. receiver's supplementary report shows ansons; hence state courts should not assume ju.

were

For other cases see same topic and section SUMISER in Dec. Dig. & Am. Dig. Key-Xo. 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 to one Gallup two promissory notes in the assignment.

sum of $114.90 each, which Gallup had, for [Ed. Note: --For other cases, see Bankruptcy, value and before maturity, transferred to the Cent. Dig. 88 7-9; Dec. Dig. $ 9.*]

bank. It alleged: 2. APPEAL AND ERROR (S 1026*)-REVIEWHARMLESS ERROR.

"That Copeland is wholly insolvent and has The error of the state court in assuming recently traded off a large amount of his personjurisdiction to administer the assets of an in- al property to one Henry Browning for certain solvent, under a general assignment, is not lots in the town of Cotter; that he caused Henprejudicial, where there was nothing to show ry Browning to convey said property to Lula B. that the assignment was made for the purpose of Copeland, wife of J. C. Copeland, for the purhindering, delaying, or defrauding the insol- pose of hindering and delaying his creditors and vent's creditors,

placing the same beyond the reach of his cred[Ed. Note.--For other cases, see Appeal and Copeland, for the purpose of hindering, delaying,

itors, among whom was the plaintiff ; that J. C. Error, Cent. Dig. 88 4029, 4030; Dec. Dig. 8 and defrauding his creditors, transferred to T. 1026.*)

L. Bond and A. G. Thompson a large amount 3. FRAUDULENT CONVEYANCES (8 51*)-PROP- of personal property by voluntary transfer, wholERTY EXEMPT-DISPOSAL,

ly without consideration, and that said Copeland Where an insolvent person trades exempt still remains the owner thereof, and of the land property for land, taking title in his wife, the described ; that Copeland is insolvent, and that transaction is not open to attack by his cred- his debts exceed the sum of $1,000." itors.

The complaint prayed that a receiver be [Ed. Note. For other cases, see Fraudulent appointed to take possession of the goods in Conveyances, Cent. Dig. 88 114-117; Dec. Dig. the hands of T. L. Bond and A. G. Thompson 8 51.*] 4. APPEAL AND ERROR ($ 1149*)—DETERMINA- that Copeland be declared the beneficial own

and safely keep the same pending suit, and TION-CORRECTION OF ERRORS.

As an equity case is heard de novo on ap er of the real property deeded to his wife, peal, a niere clerical error, whereby an insuffi. Lula B. Copeland, by Browning, and that the cient judgment was rendered for plaintiff against same be subjected to the plaintiff's debt, and one of the defendants, will be corrected.

[Ed. Note.--For other cases, see Appeal and it prayed for judgment on the notes. Error, Cent. Dig. 88 4483-4496; Dec. Dig. S Appellees J. C. Copeland and Lula B. Cope1149.*]

land answered the complaint, admitting that Appeal from Marion Chancery Court; Geo. empt was traded for the town lots, as set

the personal property claimed by them as exT. IIumphries, Chancellor. Action by the Baxter County Bank against taken in the name of Lula B. Copeland, but

forth in the complaint, and that the title was J. C. Copeland and others, consolidated with denied that this was done to hinder or deinsolvency proceedings had upon the named fraud creditors. They alleged that the propdefendants' general assignment. From the

erty traded for the town lots was exempt and decrees, plaintiff appeals. Modified and af- had been scheduled and set apart as exempt firmed.

property in J. C. Copeland's deed of assignJ. C. Copeland, an insolvent merchant of ment; that the deed was taken in his wife's Marion county, Ark., on the 4th day of Janu- name in good faith and for a valuable conary, 1913, executed a general deed of assigu- sideration; that Lula B. Copeland has furment for the benefit of creditors, naming T. nished the said J. O. Copeland the sum of L. Bond as assignee. The deed included all $500 in cash; and that this was the considof his property, except certain articles of per- eration for the deed to her. sonal property, described in the schedule at In the Marion chancery court an ex parte tached, which he claimed as exempt. The petition was filed at the April term, 1913, by deed specified that the assignee, after filing certain creditors of J. C. Copeland, in which the inventory of the property described in the they alleged the execution of the deed of asdeed and making the bond required by law, signment by Copeland and the proceedings should administer the assets under the direc- thereunder, to wit, that Bond, the assignee, tions of the chancery court in conformity had taken possession of the property menwith the statutes.

tioned, and that, after taking possession of The deed was filed with the clerk of the the same, a receiver was appointed by the Marion chancery court on the 8th day of Jan. chancery court of Baxter county, who, under uary, 1913, and the assignee took possession the orders of the chancery court, had taken of the property. Copeland thereafter moved the property from the possession of T. L. to Baxter county and traded the personal Bond; that the Baxter chancery court had property scheduled as exempt for town lots decreed that, when the Marion chancery court in Cotter, Baxter county, to one Browning, took jurisdiction of the property for the purand had the deed to the lots made to his wife. pose of administering the same under the as

On the 20th day of March, 1913, the Baxter signment, said goods and property should be County Bank instituted suit against Copeland returned to the jurisdiction of that court. It and his wife and Browning and T. L. Bond set up that the assignee named in the deed and A. G. Thompson in Baxter chancery had failed to qualify ; that the Marion chancourt. It set up in its complaint that Cope- cery court took jurisdiction and appointed a land and his wife were then residents of trustee in his stead.

The Baxter County Bank appeared special-, ed in Schedule A, and which the said Copeland ly to this petition and objected to the Marion claimed as exempted to him under the laws of chancery court taking jurisdiction. It set leged to have been sold by the defendant Čope

the state of Arkansas. That the property alup that Copeland was indebted to it and was land to the defendant Browning were the goods indebted generally in a sum exceeding $1,500; described in Schedule A to the above deed. That that the assignment was void; and that the all of the stock of goods mentioned in said deed, law pertaining to general assignments for the were, at and all times prior to the institution

except those sold to the defendant Browning, benefit of creditors, to be administered in the of this suit, in Marion county, Ark., and were. chancery court, was inoperative. It alleged at the time of the appointment of the receiver that it had a suit pending in the Baxter chan- therein, in the possession of the said T. L. Bond,

through his agent, A. G. Thompson. That the cery court against Copeland, and that said receiver heretofore appointed by this court has court had ample power and jurisdiction to taken possession of the said property and is now adjudicate all the matters involved.

in possession thereof. T. L. Bond has made The Marion chancery court overruled the filed said inventory nor executed bond as pro

an inventory of the said property, but has not bank's objection to its jurisdiction, and as- vided by law as such trustee. That the chansumed jurisdiction to administer the personal cery court of Marion county has never taken estate mentioned in the deed of assignment of any steps therein, nor made any orders in rela

tion to said assignment, and has never assumed Copeland, and appointed a trustee. From any jurisdiction thereof, unless the mere making this order of the Marion chancery court, the of the said deed by Copeland and the filing of bank appealed. Thereafter, at the October the same by Bond is to be construed as giving term, 1913, of the Baxter chancery court, the Marion county been in session since execution

jurisdiction, nor has the said chancery court of court dismissed the complaint of the bank as and filing of the said deed. That all of the parto the personal property and as to the receiv- ties to said deed were, at the time of the execuership, for the reason that the Marion chan- tion thereof, residents of Marion county. That

the inventory attached to the receiver's report cery court had assumed jurisdiction to ad- herein is the inventory made by the said T. L. minister the personal estate and had appoint- Bond, trustee. That, at the time of the comed a trustee to take charge of the same. The mencement of this action, the defendant J. C. Baxter chancery court, after a further hear- and both J. C. Copeland and Lula B. Copeland

Copeland was a resident of Baxter county, Ark., ing of the cause upon the pleadings, the depo- were served with summons in this action by the sition of Copeland, and the agreed statement sheriff of Baxter county, in Baxter county." of facts, entered the following finding:

Allyn Smith, of Cotter, for appellant. Z. "That Lula B, Copeland has title to the town M. Horton, of Mountain Home, and Gus · lots in controversy ; that defendant J. C. Cope. Seawel and Sam Williams, both of Yellville, land is indebted to the plaintiff for the debt sued for."

for appellee. And the court entered a decree in favor of

WOOD, J. (after stating the facts as the bank for $114.90, the principal of said above). [1] The chancery court of Marion note, and for the additional sum of $25.38 in- county had no jurisdiction to administer the terest thereon, and entered a decree quieting estate of J. C. Copeland under the general the title to the lots in controversy in Lula B. deed of assignment. The state insolvency Copeland.

act of June 26, 1897 (Laws 1897, p. 115), Appellant duly prosecutes these appeals was superseded by the bankruptcy act of from the decrees of the Marion and the Bax-Congress of July 1, 1898, in so far as they ter chancery courts. The causes are consoli- relate to the same subject-matter and afdated for convenience in the hearing. The fect the same persons, as was held in Hickagreed statement of facts used in both the man v. Parlin-Orendorff Co., 88 Ark. 519, Marion and the Baxter chancery courts is as 115 S. W. 371. See, also, Roberts Cotton follows:

Oil Co. v. F. E. Morse, 97 Ark. 513, 135 S. "It is agreed: That on and prior to the 4th W. 334. day of January, 1914, J. C. Copeland, one of An attack was made by appellant on this the defendants herein, was engaged in the mer deed of assignment by its objection to the cantile business in Marion county, Ark., and was, at and prior to said date, a resident of said Marion chancery court, assuming jurisdicMarion county. That, in pursuing the said busi- tion to administer the assets under this inness, the said J. C. Copeland became involved, solvency act within four months after the contracting a large amount of indebtedness that deed of assignment. The Marion chancery he was unable to pay, among other indebtedness the two notes of $114 each to H. H. court therefore erred in assuming jurisdicGallup, and by him assigned to Baxter County tion to administer the personal assets of Bank. That on the 4th day of January, 1913, the estate under this deed of assignment, while the said J. C. Copeland was a resident of said Marion county, and while his entire stock and the chancery court of Baxter county of merchandise was situated in said Marion erred in holding that the Marion chancery county, Ark., he executed, acknowledged, and court had such jurisdiction. delivered to the defendant T. L. Bond the fol

[2, 3] It appears from the pleadings and lowing instrument of writing: (Reference is here made to the deed of assignment.] That the agreed statement of facts that these errors said T. L. Bond on the 8th day of January, were not prejudicial to appellant. The ap1913, caused said instrument of writing to be pellant does not allege nor show facts suffifiled with the clerk of the Marion chancery cient to show that the deed of assignment court, and at once took possession of the entire stock of merchandise belonging to the said was made for the purpose of hindering, de Copeland, except that portion of said stock list- / laying, or defrauding Copeland's creditors. Mere general allegations to that effect are / 2. BILLS AND NOTES (8 451*)--ACTIONS-DEnot sufficient. Appellant does not set up

FENSES. any facts tending to show fraud. The al-cross-action for damages occasioned by plain

Whenever a defendant can maintain a legations of its complaint as to the trans- tiff's noncompliance with his part of the confer of personal property for the lots therein tract, he may, in an action upon a note given mentioned and the taking of the title to in consequence of the contract, set up such

claim as a defense. those lots in Lula B. Copeland are not sufficient to show fraud in this transaction, and Notes, Cent. Dig. 88 1342, 1343, 1365, 1366;

(Ed. Note.-For other cases, see Bills and the agreed statement of facts shows that the Dec. Dig. $ 451.*] creditors had no right to complain of this, 3. CONTRACTS (8 305*)— ACTIONS-BREACH. for the personal property transferred was Where a landowner, who knew little about exempt. Copeland and his wife had a right wells, accepted one dug by plaintiff, relying to make such disposition of that property as upon his superior knowledge and skill, such acthey pleased. The creditors of Copeland an action on a note for the price of digging the

ceptance does not preclude the landowner, in could not subject such property to the pay- well, from setting up that the well was not ment of their debts. See Sims v. Phillips, 54 properly constructed. Ark. 193, 15 S. W. 461; Clark v. Edwards, Cent. Dig. £$ 1398, 1399, 1400, 1463, 1464, 1467–

[Ed. Note. For other cases, see Contracts, 57 Ark. 331, 21 S. W. 477: King v. Harga- 1475; Dec. Dig. '$ 305.*] dine Co., 60 Ark. 1, 28 S. W. 514.

4. HUSBAND AND WIFE (8 238*)-ACTIONSThe chancery court did not err, therefore,

VERDICT-JUDGMENT. in holding that the title to the lots in con- In an action against a husband and wife troversy was in Lula B. Copeland and in on a note for the price of digging a well, where

the defense of both was failure of consideration, quieting her title. The proof fails to show judgment should be rendered in favor of both, any fraud on the part of appellee J. C. where the jury found in favor of the husband Copeland in making the deed of assignment. alone, for the consideration must have failed

[4] Under the pleadings and the agreed as to both if to one. statement of facts, the chancery court should wife, Cent. Dig. 88 853-850, 858, 860–863, 983 ;

(Ed. Note.-For other cases, see Husband and have entered a judgment in favor of the ap Dec. 'Dig. & 238.*j pellant bank for the additional sum of

5. HUSBAND AND WIFE (8 85*) MARRIED $114.90, with interest. The undisputed facts

WOMEN-LIABILITIES OF. show that this amount was also due the ap- A married woman is not liable on a note pellant, and the court should have entered executed jointly with her husband, where it was a decree for that sum, and doubtless would not given with reference to or for the benefit of

her separate estate. have done so, had a specific request been

(Ed. Note.-For other cases, see Husband and made for such judgment. The failure to Wife, Cent.Dig. $8 333, 336–341; Dec. Dig. $ 85.*] enter such judgment was in the nature of a clerical mísprision, and, as the trial is de

Appeal from Circuit Court, Randolph novo, this court will enter such judgment as County; C. H. Henderson, Special Judge. the chancery court should have entered up

Suit by George Dutton against George W. on the undisputed facts of the record. See Million and another. From a judgment for Greenlee v. Rowland, 85 Ark. 101, 107 S. W. defendants, plaintiff appeals. Affirmed. 193.

George Dutton, pro se. Thos. W. CampThe decree of the Baxter chancery court bell, of Pocahontas, for appellees. is modified and affirmed, and judgment will be entered here in favor of the appellant for MCCULLOCH, C. J. This is an action in: the additional sum of $114.90, with interest stituted before a justice of the peace of Ranat 10 per cent. per annum from August 6, dolph county by the plaintiff, George Dutton, 1912. As it is manifest that the chancery against the defendants, George W. Million court would have rendered judgment for and his wife, Florence Million, to recover the this sum had its attention been called to the balance of a promissory note executed by the oversight at the time its decree was entered defendants to plaintiff for a part of the price of record, appellant is not entitled to the for digging a well. The case was appealed costs of this appeal, and judgment for costs to the circuit court, and the trial there rewill be in favor of the appellees.

sulted in a verdict and judgment in favor of the defendants.

[1] The plaintiff was engaged in the busi

ness 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. (Ed. Note.-For other cases, see Contracts,

gregate price was found to be $120, and the Cent. Dig. $$ 1311, 1349, 1466, 1543-1548, 1827, defendant George W. Million paid the plain182712; Dec. Dig. $ 323.*]

tiff the sum of $25 in cash and executed the

« PreviousContinue »