Randolph v. Nichol

• Decision Date: 28 January 1905
• Citation: 84 S.W. 1037,74 Ark. 93
• Parties: RANDOLPH v. NICHOL
• Court: Arkansas Supreme Court

84 S.W. 1037

74 Ark. 93

RANDOLPH v. NICHOL

Supreme Court of Arkansas

January 28, 1905

[Copyrighted Material Omitted]

Appeal from Crittenden Chancery Court EDWARD D. ROBERTSON Chancellor.

Modified in part.

STATEMENT BY THE COURT.

On September 1, 1844, various owners of lands in Crittenden County, Arkansas, and Shelby County, Tennessee, formulated a joint scheme for the disposition of their lands by the organization of a voluntary association (unincorporated) called the Memphis & Hopefield Real Estate Stock Association and pursuant to said plan they conveyed said lands to John S. Claybrook and Seth Wheatly, as trustees, who issued stock in said association to the several owners of the lands in proportion to the values of the tracts so conveyed by them. The lands so conveyed to the trustees were to be sold by them for the benefit of the stockholders, and the deed of conveyance further provided that "at any sale of the land and lots herein conveyed the said trustees may receive the stock issued as aforesaid at its par value in payment of purchases."

Under this instrument lands were sold by the trustees from time to time, some sales being for money and many being made for stock in the association. The stock received in payment of sales was always cancelled. Dividends were declared of the money received for sale, which were credited on the outstanding stock certificates.

It appears that 90 per cent. of the face value of all outstanding stock had been paid to all stockholders before the suit was commenced.

On September 13, 1882, George W. Harrison and Horace W. Ferguson, stockholders in the Memphis & Hopefield Real Estate Stock Association, filed a bill in chancery in the circuit court of Crittenden County, Arkansas, against Willoughby Williams and John S. Claybrook, who were then trustees of said association, and others. The object of this bill was to wind up the said association, and dispose of its assets for the benefit of the stockholders therein.

Willoughby Williams, who died after the commencement of this suit, but before answer, owned $ 40,000 of stock in the association. He left a will, which was probated in Davidson County, Tennessee, where he lived, and in Jefferson County, Arkansas, whereby he bequeathed this stock to his children, $ 10,000 to his daughter, Nannie W. Nichol, to be held by his son, John H. Williams, as trustee for her.

John H. Williams and M. H. Williams were appointed executors by the will. Willoughby Williams died soon after the filing of the bill in the cause, and his executors filed an answer thereto, in which they claimed title to all the stock disposed of by the will.

On April 26, 1883, a decree was rendered for the closing of the trust, and the cause was referred to a master to ascertain and report the description and value of the undisposed of property, and the amount of outstanding stock and names of the holders thereof. After report of the master, the court on January 20, 1886, made an order, based upon the report of the master, for the sale of the undisposed of land of the association, to the end that the proceeds thereof might be divided and distributed among the holders of the stock of said association, according to their respective rights, as the same existed and might be declared and decreed by the court in this suit. The order directed that the commissioner should "receive the stock issued under the provisions of said deed at its par value in payment of any purchase that may be made of the land sold, should any stock be tendered;" and further provided that the court should thereafter "determine who are the stockholders entitled to participate in the distribution of the proceeds of the sales which may be made herein, and the proportion in which the person or persons so entitled shall share the same, and such question is for the time reserved." The decree also contained the following provision: "Nothing in this decree shall be so construed as to prejudice or in any manner affect the questions not herein disposed of, or the rights of any of the parties to this suit not herein or heretofore expressly adjudicated, but all such questions and rights are hereby reserved."

On July 18, 1887, the commissioners filed their report, showing sales of the lands made by them pursuant to the order of court, from which report it appears that they had made sales to the extent of $ 41,651.91 in price, about all of which was paid for in stock of the association.

Among these purchasers was C. W. Frazer, trustee, who held the Willoughby Williams stock, $ 40,000, as the representative of the executors, and who purchased land at the aggregate price of $ 18,894.30, and paid stock therefor, purchasing for the other owners of this lot of stock, exclusive of said Nannie W. Nichol, who had declined to permit any of her portion of the stock to be used for that purpose. The court, by decree entered July 18, 1887, confirmed these sales with a qualification in the following terms: "If it becomes necessary, under the final decrees entered herein, to raise additional amount of cash in order to pay off the costs, expenses, debts and liabilities aforesaid, and to settle the equities between the various stockholders in said association, if any there be, said purchasers who have paid for their said purchases in stock will be required each to pay in money his proper proportion of said additional sum which it may be necessary to raise for the purpose aforesaid. And a lien is now retained on each tract of said land, respectively, to secure such additional sums of money as the purchasers thereof may be hereafter required to pay;" and the commissioners were directed to execute deeds to the several purchasers with the foregoing provision incorporated therein, reserving such claim for contribution, which was done.

Later, during the progress of the cause, the remainder of the lands unsold, and also some of the lands previously purchased by Claybrook, one of the trustees, were sold under order of the court containing the same stipulations with reference to payment therefor in stock, and on September 28, 1900, these sales were confirmed by the court with the same stipulation as above, requiring the purchasers to contribute, when called upon, and declaring a lien upon the lands sold for such contribution.

On January 28, 1891, Nannie W. Nichol and M. W. Taggart, who had been substituted as trustee for her under the will of her father, Willoughby Williams, first appeared as parties to the suit, filing a petition setting up a claim to the stock in the sum of $ 10,000, included in the $ 40,000 bequeathed by the will. The petition showed that no property had been bought by or for Mrs. Nichol in the cause, and claimed that she, through her trustee, Taggart, was entitled to her pro rata share of all assets of the association that have been or might be realized in the cause. Petitioners prayed to be made parties to the cause, and that they might have the relief to which they were entitled as stockholders, and they offered to perform all such terms and conditions as to payment of or liability for costs as the court might require.

This petition does not appear to have been formally passed upon by the court, further than to sustain the exceptions of those parties to a report of master in 1892, fixing the value of the stock of the association.

On November 22, 1894, appellees, as heirs, and M. W. Taggart, as administrator of Nannie W. Nichol, filed an answer in the cause in opposition to the allowance of fees of a solicitor; and on September 19, 1900, appellees, as owners of the $ 10,000 stock formerly claimed by Nannie W. Nichol, filed exceptions to the report of the commissioner who had made the last sales. The exceptions claimed that all assets of the association had been exhausted, and that the small balance in the hands of the commissioner would be absorbed in the payment of costs, leaving nothing wherewith to pay non-purchasing stockholders their pro rata of the proceeds of sales of the property of the association.

On September 28, 1900, a decree was rendered in said cause which overruled the exceptions of appellees to the report of the commissioner, which showed the sales of the Claybrook lands, and confirmed such report. The decree directed the commissioner to execute deeds to said purchasers, and to present such deeds to the court for examination and approval. This decree says: "If it becomes necessary, under the final decree to be entered herein, to raise any additional amount of cash in order to pay off the costs, expenses, debts and liabilities which have been or may be established against the Memphis & Hopefield Stock Association, and to adjust the rights and equities of all parties, and to settle the equities between the various stockholders and the said association, if any such there be, and to satisfy the rights of non-purchasing stockholders, then the purchasers named above who have paid for their purchases in the stock as appears herein will be required each to pay in money his proper proportion of such additional sums; and a lien is now retained on each tract of said land, respectively, to secure such additional sums of money as the purchaser or purchasers thereof may hereafter be required to pay for the purpose as aforesaid, and the said deeds, respectively, shall reserve a lien to secure the payment of any sums of money which the court may hereafter in this cause direct the said purchasers, respectively, to pay."

"The compensation of such commissioner, as charged in said report was allowed, and he was directed to retain the same and pay any unpaid costs of the cause. If any balance remained, the commissioner was to pay it over to the clerk of the court, to be disposed of by it thereafter in the suit. ...