International Shoe Co. v. Pinkus

• Citation: 292 S.W. 996,173 Ark. 316
• Decision Date: 21 March 1927
• Docket Number: 298
• Parties: INTERNATIONAL SHOE COMPANY v. PINKUS
• Court: Supreme Court of Arkansas

292 S.W. 996

173 Ark. 316

INTERNATIONAL SHOE COMPANY v. PINKUS

No. 298

Supreme Court of Arkansas

March 21, 1927

Appeal from Chicot Chancery Court; E. G. Hammock, Chancellor affirmed.

Decree affirmed.

Streett & Burnside, for appellant.

Golden & Golden, E. E. Hopson and N. B. Scott, for appellee.

OPINION

MEHAFFY, J.

The appellant filed its complaint in the chancery court of Chicot County, alleging that it was a corporation legally organized and doing an interstate business; that its transaction with Pinkus constituted interstate commerce, and that it was authorized to maintain the suit; that the defendant, I Pinkus, and the garnishees, M. A. Threet, M. A. Threet as receiver, Sam Dessent, Bank of Dermott, and Exchange Bank & Trust Company were all citizens and residents of the State of Arkansas, the last two being banking corporations. It alleged that, on the 24th day of August, 1925, it obtained judgment against I. Pinkus in the common pleas court of Chicot County for $ 463.43, with interest from December 9, 1924, at the rate of 6 per cent. per annum, and for all costs. That no part of said judgment has been paid; that an execution was issued against the property of Pinkus, and the sheriff reported that he was unable to find any property of the defendant upon which to levy. It further alleged that the garnishee, M. A. Threet, and M. A. Threet as receiver, has in his possession and control said moneys property of defendant Pinkus, acquired by the sale of merchandise and fixtures belonging to Pinkus under certain proceedings now pending in the Chicot Chancery Court, wherein I. Pinkus was plaintiff and Ed Cannon and other creditors of the said Pinkus, including the plaintiff herein, are defendants, instituted under and by virtue of act 48 of the Acts of the General Assembly for 1897, being now §§ 5885 to 5893, inclusive, of Crawford & Moses' Digest. That all proceedings of the Chicot Chancery Court under the State statute are void, because the insolvency laws of the State were suspended by the bankrupt act; that the moneys now held by Threet, individually or as receiver, belong to I. Pinkus, and are subject to the payment of judgment in favor of plaintiff; that the said Threet, individually and as receiver, has said moneys deposited in one or both of the banks named as garnishees; that Sam Dessent owes Pinkus certain sums of money arising from sale and purchase of merchandise and fixtures.

Plaintiff attached interrogatories to be answered under oath by each of the garnishees. Plaintiff attaches a copy of the judgment in the common pleas court, the return of the sheriff, and the petition of defendant, Pinkus, to be declared an insolvent, and for the appointment of a receiver; also shows the exhibits attached to the petition. Plaintiff also attaches, as an exhibit, the decree and orders of the chancery court. Plaintiff also exhibits the transcripts of the answer of Threet as receiver, showing the amount realized from the sale of the store and fixtures belonging to I. Pinkus. Exchange Bank & Trust Company also filed answer to interrogatories, which were exhibited with plaintiff's complaint. Defendants filed demurrers to plaintiff's complaint, and the court sustained the demurrers and dismissed plaintiff's complaint.

It is contended by the appellant, first, that the Federal bankrupt act of 1898 superseded And suspended the insolvency laws of the State of Arkansas, in so far as the instant case is concerned, and that the proceedings attempted to be had thereunder in this case are coram non judice, and void, second, that, if the chancery court had jurisdiction to declare Pinkus a bankrupt, it could not bind appellant, a nonresident of the State, in such proceeding.

The Arkansas statute with reference to insolvent debtors simply authorizes a debtor to go in the chancery court and ask for the appointment of a receiver to take charge of his property and distribute the same among his creditors. The effect of this is the same as if the debtor had made an assignment of his property for the benefit of his creditors, and this court has repeatedly held that a debtor may make an assignment of all his property, but that he cannot reserve any to himself, except, of course, the exemptions he is allowed by the Constitution.

This court, however, has said: "It is no longer questioned that the national bankruptcy law brooks no interference with its operation, and supersedes all State insolvency laws in conflict with it or that provide the same relief. But it is also true that such Federal bankruptcy law does not repeal or abrogate State laws in conflict, but only supersedes and suspends their operation for the time being upon persons or cases within the purview of the Federal statute. The national bankruptcy act does not apply...