Interstate Jobbing Company v. Velvin

• Decision Date: 14 July 1924
• Docket Number: 120
• Citation: 263 S.W. 966,165 Ark. 263
• Parties: INTERSTATE JOBBING COMPANY v. VELVIN
• Court: Arkansas Supreme Court

263 S.W. 966

165 Ark. 263

INTERSTATE JOBBING COMPANY v. VELVIN

No. 120

Supreme Court of Arkansas

July 14, 1924

Appeal from Hempstead Circuit Court; James H. McCollum, Judge reversed.

STATEMENT OF FACTS.

Appellant brought this suit against appellees to enforce the statutory liability against them for failing to make their annual report as president and secretary of a corporation.

Appellant Interstate Jobbing Company, is a domestic corporation, doing business at Little Rock, Arkansas, for the years 1919, 1920 1921, and since that time. During the years 1919, 1920, and 1921, it sold to the Farmers' Mercantile Company, a domestic corporation, at Washington, Arkansas, merchandise to the amount of $ 2,882.70. Of this amount $ 493.40 was furnished during the year 1921. Payments on the account were made to the amount of $ 2,423.25. Of this amount $ 350 was paid by the Farmers' Mercantile Company during the year 1921. The Farmers' Mercantile Company was subsequently adjudged to be a bankrupt, and the appellant received a dividend from the bankrupt court in the sum of $ 51.05. The appellant filed an itemized account, duly verified, and attached the same to the complaint in this case, which was also duly verified. The itemized account showed a balance due the appellant of $ 459.45.

E. D Velvin was president of the Farmers' Mercantile Company from January 1, 1921, until December 1, 1921. R. L. Byers was secretary of the Farmers' Mercantile Company from the time of its organization until December 1, 1921. No report was filed by the president and secretary of the corporation for the year 1920, as required by § 1715 of Crawford & Moses' Digest. No report, as such officers of said corporation, was filed by E. D. Velvin and R. L. Byers from January 1, 1921, to December 1, 1921. The last item of goods purchased by the Farmers' Mercantile Company from the Interstate Jobbing Company was on September 12, 1921, and the last payment was on September 28, 1921.

There was a verdict and judgment in favor of appellees, and the case is here on appeal.

Judgment reversed and cause remanded.

E. F. McFaddin, for appellant.

Instruction No. 1 was error. In the absence of an application of payments by the debtor, the law applies the payment in liquidation of the oldest item of the account. 91 Ark. 458, and cases cited; 30 Cyc. 1227; note 12 L. R. A. 712. The liability of the president and secretary for failure to file the report required by § 1715, C. & M. Digest, was primary and absolute. 90 Ark. 51; 68 Ark. 433; 78 Ark. 517. Instruction No. 11, which was requested by appellant and refused, states the law as set out in 124 Ark. 495. See also 68 Ark. 433; 75 Ark. 107; 90 Ark. 51; 96 Ark. 268; 92 Ark. 327; 111 Ark. 37; 123 Ark. 226.

OPINION

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

The first assignment of error is that the court erred in amending and giving as amended the following instructions:

"Under the laws of the State of Arkansas, it is the duty of the president and secretary of an Arkansas corporation to file in the office of the county clerk of the county in which the corporation is domiciled and carrying on business, an annual report, not later than February 15 or August 15 of each year showing the condition of affairs of the corporation of which they are officers. And the law further provides that, should the president and secretary neglect or fail, whether intentionally or not, to file the said report, then by such failure the said president and secretary become jointly and severally liable for all debts contracted by the corporation after the date of the failure to file such annual report. And if you find in this case, from the preponderance or greater weight of the evidence, that the Farmers' Mercantile Company was an Arkansas corporation, domiciled and carrying on business in Hempstead County, Arkansas, and that E. D. Velvin and R. L. Byers were the president and secretary of the corporation, and failed to file the report required by law, and that, after the date of the failure to file such report, the account sued on herein was contracted, then your verdict herein should be for the plaintiff, and...