Hinton v. Willard

• Decision Date: 02 May 1949
• Docket Number: Nos. 4-8809, 4-8810.,s. 4-8809, 4-8810.
• Citation: 220 S.W.2d 423
• Parties: HINTON et al. v. WILLARD et al. (two cases).
• Court: Arkansas Supreme Court

220 S.W.2d 423

HINTON et al. v. WILLARD et al. (two cases).

Nos. 4-8809, 4-8810.

Supreme Court of Arkansas.

May 2, 1949.

Rehearing Denied June 6, 1949.

Appeals from Chancery Court, Benton and Washington Counties; John K. Butt, Chancellor.

Suits by Clyde B. Willard and others against W. L. Hinton and others to set aside as fraudulent as to creditors certain conveyances and transactions between defendants and subject property to the lien of judgment held by plaintiffs against named defendant. Upon death of named plaintiff, cause as to him was revived in the name of his executrix. From decrees in favor of plaintiffs, defendants appeal.

Decrees reversed in part and otherwise affirmed.

Claude Williams, of Rogers, and Vol T. Lindsey, of Bentonville, for appellants.

Hill, Fitzhugh & Brizzolara, of Fort Smith, and J. Wesley Sampier, of Rogers, for appellees.

McFADDIN, Justice.

Appellants challenge a decree of the Benton Chancery Court, and also a decree of the Washington Chancery Court (both rendered on the same evidence), in each of which decrees the Courts set aside as fraudulent certain conveyances and transactions between the appellants (defendants), and subjected properties in Benton and Washington Counties to the lien of the judgment which the appellees¹ (plaintiffs) hold against appellant, W. L. Hinton. The record presented is voluminous. The two transcripts exceed 620 typewritten pages; and the abstracts and briefs exceed 450 printed pages. For convenience, we will refer to the parties as they were styled in the lower courts; and will detail the facts and discuss the issues in the following topic headings.

I. The Judgment Rendered by the Sebastian Chancery Court and now Sought to be Enforced by the Plaintiffs. For approximately ten years W. L. Hinton was secretary and manager of the Mutual Savings Building and Loan Association of Fort Smith (hereinafter called "Association."). He resigned in 1938, and the Association sued him for an accounting, in the Sebastian Chancery Court. A master was appointed and considerable evidence was taken—all of which is in the record in the present cases. Hinton voluntarily conveyed to the Association certain properties; but even after these conveyances, a decree was entered: (1) Returning title from Hinton to the Association to other properties, and (2) awarding the Association a personal judgment against W. L. Hinton for $12,643.27 with interest at 6% until paid. This money judgment was rendered on October 10, 1939, and is the one which the plaintiffs are now seeking to enforce. The only credits on the judgment are: $179.17 on April 9, 1940, and $300 on January 7, 1941.

The judgment was assigned to C. B. Willard and A. F. Hoge, who—along with Hinton —had been officers in the Association. By proper writs of scire facias and orders of revivor, sections 8271-8277 Pope's Digest,² the judgment was revived by Willard and Hoge, as assignees, on February 27, 1945, and, again, on February 24, 1948. In each of these instances, the writ of scire facias was duly served on W. L. Hinton, and also the order of revivor recites the assignment of the judgment by the Association to Willard and Hoge, and the two payments credited thereon as previously mentioned.

One of Hinton's main contentions in the present suits is that these orders of revivor are not res judicata against him, and that he is entitled to cross complain against the plaintiffs, Willard and Hoge, in these suits, and compel them to account to him now for all of their actions in the liquidation of the Association. Hinton claims (1) that Willard and Hoge, as directors of the Association, were trustees;³ (2) that Willard and Hoge, in winding up the affairs of the Association after Hinton left, were guilty of neglect as trustees;⁴ and (3) that the judgments of revivor in the scire facias actions were not res judicata against the cross complaint of Hinton.⁵

We hold against Hinton on the third contention (i. e., res judicata), and such holding makes it unnecessary to discuss the other two. From 1939 until 1948 Hinton seemed absolutely indifferent to the affairs of the Association. He moved from Fort Smith to northwest Arkansas, and went into the winery business. Willard and Hoge, as the remaining officers of the association, were left "with the bag to hold." By borrowing large sums on their own financial standing, they satisfied creditors and other stockholders; and, in order to salvage what they could to apply on their own losses, they took the assignment of the Hinton judgment from the Association. The Association was liquidated, its charter surrendered, and Willard and Hoge revived the judgment as previously recited. If Hinton had desired to question the validity of the assignment of the judgment from the Association to Willard and Hoge, or had wanted to claim on the judgment any bona fide credits due him by the Association or by Willard and Hoge, then in any such event, Hinton should have offered such defenses when the writs of scire facias were served on him, and before the judgments of revivor were entered.

The purpose of a revivor of a judgment by scire facias is to continue the lien of the judgment by the holder thereof for the amount due, less credits. So, ownership of the judgment and the extent of the credits are matters necessarily within the scope of defense in the proceedings to revive by scire facias. In Ward v. Sturdivant, 96 Ark. 434, 132 S.W. 204, 205, Mr. Justice Frauenthal, speaking for this Court, said—concerning the force and effect of a judgment of revivor based on a writ of scire facias:

"That judgment was rendered in a proceeding by scire facias, and, after its rendition it became as effective as an adjudication as other judgments. In a proceeding to revive a judgment by scire facias the defendant is bound to plead all matters of defense that he has just as he would in an ordinary suit. The judgment of revival is conclusive against all facts and defenses which existed before its rendition. In 2 Freeman on Judgments, § 448, it is said: `The effect of a judgment entered upon a scire facias as an adjudication does not differ from that of other judgments. It cannot be collaterally avoided for mere error or irregularity and until set aside by some proper proceeding it conclusively establishes the facts necessary to support it as against all persons properly made parties thereto.' Helms v. Marshall, 121 Ga. 769, 49 S.E. 733; Babb v. Sullivan, 43 S.C. [436], 440, 21 S.E. 277; Witherspoon v. Twitty, 43 S.C. 348, 21 S.E. 256."

In Ward v. Sturdivant, supra, it was attempted in a subsequent proceeding to raise the issue of defect of parties in the order of revivor, and this Court said:

"But having failed to raise any objection to the party in whose name the judgment of revivor was rendered the appellant is now concluded thereby, * * *."

Holdings in other jurisdictions are in accord with the Arkansas holdings as to the effect of the writ of scire facias and the order of revivor. See 47 Am.Juris. 482.

We therefore conclude that the defendant —by offering no defense to the writs of scire facias and by allowing the Sebastian Chancery Court to enter the uncontested orders of revivor in 1945 and 1948—is bound by the rules of res judicata, and cannot be heard in the present suits to say either that Willard and Hoge are not the owners of the judgment, or that Hinton is entitled to credits (other than the two entered on the judgment) for any matters prior to the 1948 order to revivor.

II. W. L. Hinton's Ownership of the Winery and the Other properties in Washington and Benton Counties. On October 6, 1939 (four days before the Sebastian Chancery Court judgment was rendered) Hinton and his wife and daughter (all of whom are defendants) signed and placed of record a limited partnership agreement for the ownership and operation of "The W. L. Hinton Winery." This instrument recited the interest of the parties to be: 98% to Mrs. Hinton and the daughter, and 2% to W. L. Hinton. Furthermore, after 1939 title to various tracts of property in Washington and Benton Counties was taken either in the name of the winery or in the name of Mrs. W. L. Hinton. In these suits the plaintiffs seek to enforce the lien of their judgment not only against the winery, but also against the other property held in the name of Mrs. Hinton. The plaintiffs claim that all of these transactions were fraudulent as against the judgment rendered against Hinton in favor...