Ritchie Grocer Co. v. Sanders

• Decision Date: 15 October 1956
• Docket Number: No. 5-997,5-997
• Citation: 294 S.W.2d 54,226 Ark. 775
• Parties: , 59 A.L.R.2d 1110 RITCHIE GROCER CO. et al., Appellants, v. W. D. SANDERS, B. M. Ritchie, Appellees.
• Court: Arkansas Supreme Court

Page 54

294 S.W.2d 54

226 Ark. 775, 59 A.L.R.2d 1110

RITCHIE GROCER CO. et al., Appellants, v. W. D. SANDERS, B. M. Ritchie, Appellees.

No. 5-997.

Supreme Court of Arkansas.

Oct. 15, 1956.

O. E. Gates, Little Rock, Gaughan, McClellan & Laney, Camden, for appellants.

Wayne Jewell, El Dorado, for cross-appellant.

Robert C. Compton and Walter L. Brown, El Dorado and J. Bruce Streett, Camden, for appellees.

HOLT, Justice.

Prior to November 9, 1953, appellee, B. M. Ritchie, operated a mercantile business at Hampton, Arkansas, and on this date he sold the business, fixtures and merchandise to W. D. Sanders. On this same day Ritchie took Sanders' note for $8,100 payable in sixty monthly installments of $135 each and to secure payment of the note Sanders executed a chattel mortgage covering the fixtures, which were particularly described, and 'also, my entire stock of merchandise, now in my store in the Ritchie Building, and that which may hereafter be stocked from time to time in said building, in Hampton, Arkansas.' This mortgage was duly recorded and at the time it was executed both B. M. Ritchie (mortgagee) and Sanders (mortgagor) owed no debts.

Sanders took over the business on November 9, 1953 and proceeded to operate it until February 17, 1954, when he delivered the fixtures and merchandise back to Ritchie and thereafter Ritchie operated the business, selling and disposing of the merchandise and stock in the regular course of retail trade. During the time that Sanders operated the business he purchased groceries and merchandise from appellants, Ritchie Grocer Co., South Arkansas Grocer Co., and Robert Mays Wholesale Grocer Co., which merchandise he co-mingled with his stock for retail sale and at the time when he delivered the merchandise and fixtures back to Ritchie, he, Sanders, was indebted to Ritchie Grocer Co. in amount of $749.51, South Arkansas Grocer Co. in amount of $566.48 and Mays Wholesale Grocer Co. in amount of $438.06. When Sanders delivered the stock of merchandise and fixtures back to Ritchie (February 17, 1954) no effort was made to comply with our bulk sales law, § 68-1501 to 68-1504 incl., Ark.Stats.1947. When appellants learned that Sanders had returned the business and merchandise to B. M. Ritchie, as indicated, they filed the present suit against Sanders and Ritchie, in which they alleged that when W. D. Sanders transferred and delivered to B. M. Ritchie his entire stock of merchandise and fixtures on February 17, 1954, there was no compliance with the bulk sales law and that such delivery of said stock of goods was in fraud of creditors; that Sanders was wholly insolvent and had made no provisions to pay his accounts to appellants or to his other creditors, and prayed for the appointment of a receiver to take possession of the stock of goods, merchandise and fixtures, to be administered for the benefit of Sanders' creditors. At this point it appears that by agreement B. M. Ritchie was allowed to execute a bond in the amount of $2,000 to protect the creditors of Sanders, which was done, and the receiver, previously appointed by the court, was authorized to return the fixtures and merchandise to B. M. Ritchie. Appellee Sanders filed answer and cross complaint. A trial resulted in a decree holding that the delivery of the stock of goods, merchandise and fixtures from W. D. Sanders to B. M. Ritchie was not in violation of the bulk sales law; that Ritchie was not responsible to the creditors of Sanders under the bulk sales law; and that there was 'no liability on the part of B. M. Ritchie and his surety on the bond set forth in the court's order of March 10, 1954. The court finds that the receiver has collected some accounts owing to W. D. Sanders and has received other monies and has incurred expenses in performing his duties as receiver, and that a final settlement should be made and the receiver discharged, * * *' and decreed 'that the plaintiff, Ritchie Grocer Company have judgment against the defendant, W. D. Sanders in the sum of $749.51 with interest from March 23, 1955; that South Arkansas Grocer Company have and recover judgment against the defendant, W. D. Sanders, in the sum of $566.48 with interest from March 23, 1955; that Robert Mays Wholesale Grocer Company have and recover judgment against the defendant W. D. Sanders in the sum of $438.06 with interest from March 23, 1955; that the cross complaint of W. D. Sanders against B. M. Ritchie and against Ritchie Grocer Company and South Arkansas Grocer Company be, and the same is dismissed for want of equity; that the cross complaint of B. M. Ritchie against Ritchie Grocer Company and South Arkansas Grocer Company be, and...