Morris v. Bowman & Brown

• Decision Date: 16 January 1928
• Docket Number: (No. 113.)
• Citation: 1 S.W.2d 549
• Parties: MORRIS v. BOWMAN & BROWN.
• Court: Arkansas Supreme Court

1 S.W.2d 549

MORRIS v. BOWMAN & BROWN.

(No. 113.)

Supreme Court of Arkansas.

January 16, 1928.

Appeal from Craighead Chancery Court; Archer Wheatley, Special Chancellor.

Suit by Bowman & Brown against Robert S. Morris, as receiver of the First National Bank of Jonesboro, and others. From the decree, all parties appeal. Affirmed.

Cooley, Adams & Fuhr, of Jonesboro, for appellant.

Chas. D. Frierson, of Jonesboro, for appellees.

SMITH, J.

The decree from which this appeal comes contains findings of fact, the correctness of which is not questioned except as to certain details, which we think are unimportant, and from which we quote the material facts, which are as follows:

The suit was brought by Bowman & Brown, who are dealers in seed rice, against C. O. Wofford, the First National Bank of Jonesboro, and R. S. Morris, as receiver of the bank, to recover the purchase price of a quantity of seed rice sold by the plaintiffs to Wofford in the year 1926. The plaintiffs claim the sale was made to the bank direct, but the court found that the sale was made to Wofford upon the promise of the bank to advance Wofford the money to pay for the rice. The rice was purchased for the purpose of being planted by Wofford on four rice farms which Wofford was operating substantially for the use and benefit of the bank, as well as for himself, under separate contracts, one of which covered each of the farms.

The bank furnished Wofford the money necessary to grow the crops of rice, and had done so prior to 1926, and it was the intention of the parties, including the bank, that payment should be made Bowman & Brown in cash for the rice immediately after its delivery, and it is admitted that the bank would have paid for the rice, or have furnished the money for that purpose, but for the fact that it failed and was taken in charge by a receiver before the payment was made.

The bank made advances on the rice crops before its doors were closed. After the failure of the bank it was necessary to make other advances to mature and gather the crops, and the receiver himself made certain advances. Other advances were made by three other creditors of Wofford in making the crops under an arrangement made by the receiver after taking charge of the bank, and all parties concede the priority of the claim of these three last-mentioned creditors.

Wofford was a member of the Rice Growers' Association and had a contract with that organization whereby he was required to deliver his rice to it for sale. The court permitted this contract to be performed, and the rice was delivered to and sold by the association, which made a report showing the net proceeds of the sale, and this money is now, in effect, a fund in court, to be distributed as ordered by the court.

The court found the amount due Bowman & Brown for the rice was $2,726.80, with interest, and that the bank and its receiver had made advances against the rice crop aggregating $30,709.62, and that the bank had, as security for its advances, the lien of a landlord on the crop of rice grown on one of the farms and chattel mortgages on the other crops of rice.

The court deducted from the net proceeds of the sale of the rice as reported by the Rice Growers' Association the advances by the three preferred creditors, and directed that the balance be apportioned between the bank and its receiver, on the one hand, and Bowman & Brown, on the other, in proportion to the advances each had made to enable Wofford to make and gather the crop.

It was ascertained that the indebtedness due Bowman & Brown for the seed rice was .0986 per cent. of the total cost of producing and marketing the rice, and it was ordered that that per cent. of the net proceeds of the rice be paid them, and that as to the balance they have judgment against the bank and its receiver, with the proviso "that as against the bank and its receiver no execution may issue, but said judgment shall participate in dividends and distributions with other general debts and obligations of the bank." From this decree all parties have appealed.

It is immaterial whether the bank agreed to pay for the rice or to furnish Wofford money for that purpose, as the fact is indisputed that, if the bank did not promise to pay Bowman & Brown, the rice was sold upon the faith of the promise of the bank that the rice would be paid for.

It is true that the bank has liens upon the rice crop, while Bowman & Brown have no lien, but it was the theory...