Baxter County Bank v. Copeland

• Decision Date: 12 October 1914
• Docket Number: 158
• Parties: BAXTER COUNTY BANK v. COPELAND
• Court: Arkansas Supreme Court

169 S.W. 1180

114 Ark. 316

BAXTER COUNTY BANK v. COPELAND

No. 158

Supreme Court of Arkansas

October 12, 1914

Appeal from Baxter Chancery Court; George T. Humphries, Chancellor modified and affirmed.

STATEMENT BY THE COURT.

J. C Copeland, an insolvent merchant of Marion County, Arkansas on the 4th day of January, 1913, executed a general deed of assignment for the benefit of creditors, naming T. 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 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 Baxter County; that Copeland had executed 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. Copeland, for the purpose of hindering delaying and defrauding his creditors, transferred to T. 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 furnished the said J. C. Copeland the sum of $ 500 in cash, and that this was the consideration for the deed to her.

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 that 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.

The Baxter County Bank appeared specially 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 mercantile business in Marion County, Arkansas, 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 one hundred and fourteen dollars 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, Arkansas, 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 listed in schedule "A," and which the said Copeland 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, Arkansas, 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....