McDonald Land Co. v. Shapleigh Hardware Co.

• Decision Date: 14 April 1924
• Docket Number: (No. 298.)
• Citation: 260 S.W. 445
• Parties: McDONALD LAND CO. et al. v. SHAPLEIGH HARDWARE CO. et al.
• Court: Arkansas Supreme Court

Page 445

260 S.W. 445

McDONALD LAND CO. et al. v. SHAPLEIGH HARDWARE CO. et al.

(No. 298.)

Supreme Court of Arkansas.

April 14, 1924.

Appeal from Greene Chancery Court; Archer Wheatley, Chancellor.

Creditors' bill by the Shapleigh Hardware Company against the McDonald Land Company and another, to which other judgment creditors were made parties, and in which the defendants filed a cross-bill, consolidated with an action by the East Arkansas Lumber Company against Bob J. McDonald. From portions of the decree rendered, the plaintiff in the creditors' bill and the defendants in both actions appeal. Reversed in part and affirmed in part.

M. P. Huddleston, of Paragould, for appellants.

R. P. Taylor, of Paragould, for appellees.

WOOD, J.

Judgments were obtained against Bob J. McDonald in justice court in Greene county, Ark., by various creditors from January 16, 1922, to and including February 8, 1922. Summons was issued in each of these cases, and service had upon McDonald, as shown by the return of the constable, as follows:

"By delivering a copy, and stating the substance thereof, at the usual place of abode of the within named, Bob J. McDonald, to Mrs. Bob J. McDonald, his wife, and a member of his family over the age of fifteen years, as I am herein commanded."

Execution was issued on the several judgments and a return of nulla bona thereon, and certified transcripts of the judgments were filed with the clerk of the circuit court of Greene county, from and on January 7, 1922, to and including February 18, 1922.

Bob J. McDonald and wife executed a deed to Bill McDonald, Jr., conveying certain lots in Paragould, Ark., known as the "Swimming Pool," and also conveyed to the McDonald Land Company certain other lots described in the deed, and known as "the Bob J. McDonald homestead." The deeds were dated January 28, 1922, and were signed and acknowledged by Mrs. Bob J. McDonald on that day. The deeds were then carried with her to Bob J. McDonald, who was then in Cuba, and were by him signed and acknowledged on the 11th of February, 1922, and on that day mailed by him at Havana, Cuba, to the respective grantees at Paragould, Ark. The deeds were duly filed by the grantees for record in the clerk's office at Paragould, Ark., at 11:00 o'clock a. m., February 20, 1922. On March 14, 1922, the Shapleigh Hardware Company, one of the creditors that had obtained judgment in the justice court, a transcript of which had been lodged in the office of the circuit clerk February 18, 1922, filed what it called a creditors' bill in the chancery court of Greene county against the McDonald Land Company and Bill McDonald Jr., alleging that the deeds above mentioned were executed for the purpose of defrauding the creditors of Bob J. McDonald; that Bob J. McDonald at the time was a resident of Cuba, and that by these conveyances he had rendered himself insolvent. The other creditors who had obtained judgments in the justice court, and filed transcripts thereof with the circuit clerk, as above mentioned, also were made parties plaintiff to the creditors' bill, and joined in the prayer to have the deeds mentioned, canceled.

The Shapleigh Hardware Company alleged in its bill that Bill McDonald, Jr., was indebted to it in the same account as that on which it had recovered judgment against Bob J. McDonald in the justice court, and it prayed personal judgment against Bill McDonald, Jr. The judgment creditors filed, and made an exhibit to their complaint, the several judgments obtained in the justice court as indicated.

The McDonald Land Company and Bill McDonald, Jr., answered the creditors' bill, denying the material allegations thereof, and set up that no personal service was had upon Bob J. McDonald, upon which to base the alleged personal judgments against him inasmuch as he had been a nonresident of the state since July, 1921. Bill McDonald, Jr., answered, denying that he was indebted to the Shapleigh Hardware Company in any sum. The answer denied specifically that the conveyances were fraudulent, and alleged that the property conveyed therein was purchased in good faith and paid for. The McDonald Land Company and Bill McDonald, Jr., filed a cross-bill setting up the same facts as alleged in their answer to the creditors' bill, and alleged that the judgments obtained in the justice court were null and void; that same were a cloud on their title; and prayed that same be set aside and held for naught.

On March 2, 1922, the East Arkansas Lumber Company filed its complaint, in the chancery court of Greene county, to foreclose a lien against Bob J. McDonald in the sum of $3,286.87 for materials furnished him in the construction of the swimming pool on the lots which had been conveyed by him to Bill McDonald, Jr. To this action service was waived, and the appearance of Bob McDonald was entered, as required by statute. These actions were all consolidated and tried together. The causes were submitted upon the pleadings as above outlined, the exhibits thereto, the interrogatories that were propounded to each of the defendants in the actions, and the answers thereto, and the depositions that were submitted in the cause. The trial court found therefrom that Bob McDonald was indebted to the East Arkansas Lumber Company in the sum of $1,726.30, and declared a lien in its favor on the "Swimming Pool" property as described in the deed. The court also found that the Shapleigh Hardware Company was entitled to a personal judgment against Bill McDonald, Jr., in the sum of $329.20, and that all the other creditors who had obtained judgment in the justice court, as indicated, were entitled to liens on the Swimming Pool property described in the conveyance mentioned, to secure the payment of those judgments, in the order of their property, naming the several creditors, and specifying the amounts of those judgments; and also found that Griffin Smith was entitled to an additional judgment in the sum of $136.31, which was a lien on lots 1 and 2, block 4, Pruitt's addition to the city of Paragould — the Swimming Pool lots.

The court further found that, at the time of the conveyances by Bob McDonald to the McDonald Land Company of lots 4 and 5, block 1, McDonald's second subdivision to the city of Paragould, Ark., known as the Bob J. McDonald homestead, that these lands constituted the Bob J. McDonald homestead, and were, therefore, free from the claims of his judgment creditors, and dismissed their bill as to the McDonald Land Company, and rendered a decree in its favor, on its cross-bill, canceling the judgments as a cloud on its title.

The court entered a decree dismissing Bill McDonald, Jr.'s, cross-bill, praying a cancellation of the judgments mentioned as a cloud on his title. The court, in its decree, appointed a commissioner to sell the lots on which the Swimming Pool was situated, and to hold the proceeds subject to the decree in favor of the East Arkansas Lumber Company, for material furnished, and the balance to the creditors in the order of their priority. The McDonald Land Company, Bill McDonald, Jr., and Bob J. McDonald appealed from so much of the decree of the court as is adverse to them; and the Shapleigh Hardware Company, and the other plaintiffs in the creditors' bill, likewise appealed from the decree of the court, canceling the judgments obtained by them against Bob J. McDonald, and holding that the homestead of Bob McDonald, conveyed by Bob McDonald to the McDonald Land Company, could not be sold to pay these judgments.

1. If Bob J. McDonald himself were seeking to have the judgments, rendered against him in the justice court canceled as a cloud on his title to the "Swimming Pool" and the homestead, he could not obtain such relief until he had alleged and proved a meritorious defense to those actions. State v. Hill, 50 Ark. 458, 8 S. W. 401; Robinson v. Arkansas Loan & Trust Co., 74 Ark. 292, 85 S. W. 413; Broadway v. Sidway, 84 Ark. 527, 107 S. W. 163; Pettus v. Bird, 136 Ark. 537, 206 S. W. 737. This equitable doctrine applies to judgments rendered in a justice court as well as to judgments in courts of general jurisdiction. Simpson & Webb Furn. Co. v. Moore, 94 Ark. 347, 126 S. W. 1074; Brookfield v. Boynton Land & Lbr. Co., 127 Ark. 306, 192 S. W. 215.

The McDonald Land Company and Bill McDonald, Jr., derived their title to the lands in controversy...