Cook v. Martin

• Decision Date: 08 April 1905
• Citation: 87 S.W. 625,75 Ark. 40
• Parties: COOK v. MARTIN
• Court: Arkansas Supreme Court

87 S.W. 625

75 Ark. 40

COOK v. MARTIN

Supreme Court of Arkansas

April 8, 1905

Appeal from Garland Chancery Court LELAND LEATHERMAN, Judge.

Reversed.

STATEMENT BY THE COURT.

John J Sumpter was in 1895 the owner of a one-third interest in lots 4 and 5 of block 112, of the city of Hot Springs, Garland County. On the 26th of June, 1895, one William Cameron recovered a judgment against Sumpter. On December 5, 1895 execution was issued on this judgment. On January 14, 1896 Sumpter gave a stay bond, staying this execution for six months. In July, 1896, Sumpter executed a deed conveying his interest in the lots to his mother, but the deed was dated as if executed on the 6th day of January, 1896. On September 12 1896, an execution was issued on the stay bond. On the 18th day of the same month, Lula W. Cook and other creditors brought actions against John J. and William Sumpter in the Garland Circuit Court, and had writs of attachment issued, which attachments were levied on the lots above described. Four days later certain other creditors brought a suit in the Garland Chancery Court in the nature of a creditors' bill, seeking to have certain conveyances made by John J. Sumpter, among them the deed from him to his mother conveying the lots named above, set aside as fraudulent and void as to creditors. On October 9, 1896, the execution issued on the bond staying the Cameron judgment was levied on the lots above described, upon which the writs of attachment had also been levied. On October 31, 1896, the lots were sold under the stay-bond execution, and bought by Cameron, the execution creditor. On January 9, 1897, Lula W. Cook and other creditors also filed a creditors' bill against the Sumpters to set aside fraudulent conveyances. On June 30, 1897, the two creditors' bills above referred to were consolidated. On January 6, 1898, the sheriff executed a deed to Cameron, conveying him a one-third interest in lots 4 and 5, which he purchased at execution sale. On January 28, 1898, the plaintiffs in the attachment suits and creditors' bills made application for the appointment of a receiver to take charge of the property attached and involved in the litigation, and the court, on the 28th day of that month, made an order to that effect. The order recites that the property is valuable, and yields monthly rentals aggregating about $ 700 a month, and "that it is proper and necessary for the preservation of the property for the benefit of plaintiffs and other creditors of John J. and William Sumpter that a receiver should be appointed to take charge of said property, rent the same out, and collect the rents accruing therefrom, and that said application of plaintiffs should be granted. It is therefore considered, ordered and adjudged that W. H. Martin be, and is hereby, appointed receiver of this court to take charge of all of said property at once, and that he be authorized, empowered and is hereby directed to rent the same to the best advantage for terms not exceeding twelve months," etc.

The receiver was also empowered to make such repairs, pay taxes and such water and light charges as should be necessary for the preservation of the property. On the same day W. H. Martin qualified as receiver by giving bond for the faithful discharge of the duties of the office as required by the order of the court.

On February 14, 1898, Cameron conveyed the lots to M. E. Gaines. On April 4, 1898, appellant filed an amendment to the creditors' bill, praying that Cameron be made a party defendant; that he be enjoined from selling the land, and that the sheriff's deed to him be cancelled. On the day following M. E. Gaines conveyed the two lots to Mamie K. Martin, the purchase being made through her husband, W. H. Martin, the receiver, acting as her agent. On May 9, 1898, the final decree was rendered on the complaint of appellant and other creditors, setting aside all of the conveyances made by Sumpter as fraudulent and void to his creditors, and ordering them sold at public sale by W. H. Martin, the receiver, who was appointed commissioner for that purpose. This decree did not refer to the Cameron title.

On July 19, 1898, the deeds of Cameron to Gaines and of Gaines to Mrs. Martin were filed for record. On September 21, 1898, Mrs. Martin filed her intervening petition in the creditors' action, in which she claimed title to the lots through the deeds from the sheriff to Cameron, from Cameron to Mrs. Gaines, and from Mrs. Gaines to her, and asked that her title be quieted. On June 8, 1898, a one-third interest in the lots 4 and 5, belonging to another party, were sold by Belding, special commissioner, at public sale to Annie E. Little, Mary E. Sumpter and Losetta E. Fourbler, for the sum of $ 4,300.

On June 15, 1901, the plaintiffs in the creditors' bill filed a response to the intervening petition of Mrs. Martin, in which they set up that the lien acquired by them on the lots was superior to that acquired by Cameron, and that the deed from the sheriff to Cameron, from Cameron to Mrs. Gaines, and from Mrs. Gaines to Mrs. Martin conveyed no title. They further alleged that Mrs. Martin purchased the lots from Mrs. Gaines through her husband, W. H. Martin, acting as her agent. "That at the time of so purchasing said lots, for his wife, W. H. Martin held the same as receiver and as trustee for the plaintiffs, and his said act in so purchasing said lots was inconsistent with his duties as such receiver, and whatever benefits he obtained, or could have obtained, by such purchase will inure to the benefit of these plaintiffs." Wherefore they ask that the deeds under which Mrs. Martin claims be cancelled and set aside, and for other relief.

Mrs. Martin filed an answer to this amendment and response, in which she alleged that her title was valid and superior to the liens acquired by plaintiffs. She further alleged that, at the time W. H. Martin was appointed receiver, the title to the lots had already passed to Cameron and his grantee, Mrs. Gaines, and she denies that he ever held such lots as receiver or as trustee for plaintiffs, and she therefore asked that her title to the premises be quieted.

On the hearing the chancellor found the issues in favor of Mrs. Martin, and rendered a decree quieting her title, from which decree plaintiffs appealed.

Decree reversed and cause remanded.

Wood & Henderson, for appellants.

The lien which Cameron acquired by the judgment of the circuit court was merged in the lien of the statutory judgment fixed by the execution of the stay bond. 29 Ark. 475; 20 Ark. 68; 14 Ark. 595, 568; 16 Ark. 599; 20 Ark. 98; 19 Ark. 265; 25 Ark. 469, 606; 12 Ark. 613; 67 Ark. 325. Appellants' lien was superior to any rights of Cameron by reason of his levy. 5 Am. St. 657; 36 F. 29; 17 N.E. 823; 22 N.E. 533; Black, Judg. §§ 420, 454; 94 U.S. 300; 27 F. 420; 11 Ala. 988; 43 P. 1103; 61 Ark. 189. If Cameron's' title is superior to appellants', appellee can only hold to the extent of lien for money paid as the purchase price. 24 N.E. 111; 64 N.W. 141; 77 N.W. 43; 82 N.W. 655; 39 A. 63; 14 P. 725; 39 S.W. 600; 23 Am. & Eng. Enc. Law, 1085; 53 Ark. 81.

Rose, Hemingway & Rose, for appellee.

The lien of the judgment was not destroyed by the stay bond. 57 Ark. 638; 32 Ark. 346; 17 Am. & Eng. Enc. Law, 807; 43 Am. Dec. 523; 63 Id. 708; 39 Id. 301; 2 Freeman, Judg. § 382. Cameron had first lien under the execution. 56 Ark. 292; Kirby's Dig. § 3227; 1 Freeman, Exec. § 207; 11 Am. & Eng. Enc. Law, 672; 42 Ark. 305. Appellee was not prejudiced by the decree of May 9, 1898. 16 Ark. 543; 28 Ark. 85, 523; 30 Ark. 111; 33 Ark. 328; 44 Ark. 92.

RIDDICK J. HILL, C. J., dissenting. Mr. Justice MCCULLOCH concurs in this dissent. BATTLE, J.

OPINION

RIDDICK, J., (after stating the facts.)

This is a contest over the title of one-third interest in two lots in the city of Hot Springs, formerly owned by John J. Sumpter. It is admitted that Cameron, under whom Mrs. Martin, the intervener, holds, obtained a judgment against Sumpter which was a lien on the lots before the attachment of plaintiffs was either issued or levied. But it is said that Sumpter afterwards made a fraudulent conveyance of this property, and that after this conveyance was made he executed a stay bond, staying the Cameron judgment, and that the lien of the judgment was merged in that of the stay bond, and that the lien of the stay bond only relates back to the date of its execution. But in this we think learned counsel for plaintiffs are in error, for in our opinion the lien of the judgment is continued in the stay bond, and this lien relates back to the rendition of the judgment, so as to protect the judgment creditor against subsequent liens or conveyances by the judgment debtor. As the Cameron judgment antedated the attachment and the creditors' bill filed by plaintiffs, we think that the lien of this judgment took precedence over the lien acquired by plaintiffs, and it was not affected by the subsequent execution of the stay bond or the fraudulent conveyance made by Sumpter.

It follows, from what we have stated, that the title of Mrs Martin, who holds under the title acquired by Cameron by virtue of an execution on his stay bond and a sale of the lots under such execution, is superior to that of plaintiffs acquired by a sale under the subsequent attachment and creditors' bill, and must prevail over their title, unless there are equitable reasons why she cannot assert that title against them. Now, this Cameron title to a one-third interest in these lots was purchased by W. H. Martin for the intervener, his wife, on April 5, 1898. He purchased a one-third interest in the lots for his wife from Mrs. Gaines, to whom Cameron had conveyed it. At the time he made this purchase for his wife ...