Brown Shoe Company v. Stone
| Decision Date | 28 February 1927 |
| Docket Number | 234 |
| Citation | 292 S.W. 117,172 Ark. 1156 |
| Parties | BROWN SHOE COMPANY v. STONE |
| Court | Arkansas Supreme Court |
Appeal from Sebastian Circuit Court, Fort Smith District; John E Tatum, Judge; affirmed.
Judgment affirmed.
Clinton R. Barry, for appellant.
Warner Hardin & Warner, for appellee.
R. E Williams and J. H. Stone were in business in Fort Smith, Arkansas, and on the eighth day of March, 1924, made a deed of assignment to H. C. Bass, reciting that the parties of the first part were indebted in divers sums of money, which they were unable to pay in full to their different creditors, a list of which was given; and the deed further stated that they decided to make a fair distribution of their property and assets among all their creditors, in proportion to their respective claims. The said deed recited that it was in trust for the benefit of creditors of the estate of the parties of the first part. Among the creditors in the list attached was the Brown Shoe Company in St. Louis, to whom, according to the list, Williams & Stone were indebted in the sum of $ 1,004.87.
H. C. Bass took charge of the assets of Williams & Stone, and wrote the creditors, on the 24th day of March, 1924, the following letter, which was mailed to the Brown Shoe Company, as well as to the other creditors:
Fort Smith, Arkansas.
Beal-Burrow D. G. Co.
Little Rock, Ark
$ 2,733.34
Brown Shoe Co.
St. Louis, Mo.
1,004.87
Berry D. G. Co.
Ft. Smith, Ark.
652.42
J. Foster & Co.
Ft. Smith, Ark.
1,941.23
Arkansas Valley Bank
Ft. Smith, Ark.
2,000.00
Ft. Smith Garment Co.
Ft. Smith, Ark.
125.50
Wolverine Shoe Co.
Rockford, Mich.
306.50
The Davis Hat Co.
Dallas, Texas
121.30
Safe Cabinet Co.
Marietta, Ohio
22.10
Sunbraid Hat Co.
St. Louis, Mo.
After the Brown Shoe Company received the letter they sent to Bass, the trustee, their account, amounting to $ 1,004.87. Thereafter, on the 24th day of April, 1924, H. C. Bass wrote to the Brown Shoe Company, inclosing a check to them for $ 482.34, in which he stated that this amount represented the first and final dividend of 48 per cent. of their account against Williams & Stone. This statement was then followed in the letter by a complete statement of the receipts and disbursements. On the 13th day of September, 1924, the Brown Shoe Company filed suit against Williams & Stone for $ 522.49. No service was had on Williams and the suit proceeded against Stone. Defendant Stone filed an answer denying the indebtedness, and denying that the account matured prior to April 8, 1924, denying their statement of account was correct, and denying that Williams admitted it to be true; and, for further answer, Stone alleged that a meeting of all the creditors of the concern was called and held, and that at said meeting the partners proposed to deliver over all the assets in liquidation and settlement of the outstanding debts, including the plaintiff's. They alleged that the proposition was accepted by the creditors and the agreement fully consummated, and all other assets of the business were turned over to the trustee, who was selected by the creditors, and that the creditors accepted the amount in full, final, and complete settlement of all the obligations, including the debt of plaintiff. They alleged that plaintiff was a party to the agreement entered into, acquiesced in and accepted the agreement and settlement thereunder, and that their creditors were paid, each, including the plaintiff, its pro rata part.
The letter from the trustee to the appellant stated that Williams & Stone had made an assignment to the writer for the benefit of all the creditors, share and share alike, subject, of course, to the approval of all creditors. The appellant then had notice that there was an assignment for the benefit of all creditors, but it was subject to the approval of all creditors. Then the letter, inclosing the appellant a check for $ 482.34, stated that it represented the first and final dividend. The letter of March 13, 1924, above referred to, also stated that the liabilities of Williams & Stone were considerably in excess of their cash assets, and that it was the opinion of the creditors that it would be to the interest of all parties concerned to liquidate their business, and the writer was asked to act as trustee to avoid bankruptcy proceedings. This letter also contained the following statement: "Acting on the assumption that all creditors not represented at the meeting will concur in the assignment, it will be the purpose of the trustee to sell the stock of merchandise and fixtures at public auction at 10 A. M. Monday, March 24, at the Williams & Stone store." The letter closed with the statement: "Hoping that you will concur in the assignment and forward verified statement of your account by return mail, I am," etc.
The appellant therefore knew that an assignment for the benefit of all creditors was made, was subject to the approval of all creditors, and knew when the stock was to be sold, and knew that, if it approved it, it was requested to send its verified statement of account by return mail.
The trustee who wrote those letters testified that he had received the account of the Brown Shoe Company through the mail. This witness further testified that the creditors represented felt that it was the best thing that could be done for the creditors to save expense and to save bankruptcy cost. Witness also testified that, when he wrote the letter to the Brown Shoe Company, appellant, he received a verified statement of account; in other words, it filed its claim with him.
The testimony shows that, when creditors took charge of a debtor's property, it was the custom in that territory that the pro-rata share of the property received by each creditor should be in satisfaction of the creditor's claim, and that this was the understanding in this case. The testimony also shows that the appellant, Brown Shoe Company had been doing business in that trade territory for many years. It was advised by the trustee that an assignment had been made for the benefit of all the creditors, but that it was on condition that it met the approval of all the creditors, and it was expressly stated to the appellant in the letter that the creditors had done this to avoid bankruptcy, that is, this is the substance of what was stated in the letter, and, after being told that the debtors had...
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