Roberts v. Letchworth

• Decision Date: 19 February 1917
• Docket Number: 183
• Citation: 192 S.W. 375,127 Ark. 490
• Parties: ROBERTS v. LETCHWORTH
• Court: Arkansas Supreme Court

192 S.W. 375

127 Ark. 490

ROBERTS v. LETCHWORTH

No. 183

Supreme Court of Arkansas

February 19, 1917

Appeal from Pulaski Chancery Court, Jno. E. Martineau, Chancellor reversed.

Decree reversed.

Emmet Vaughan, for appellants.

1. An inventory of the estate should have been ordered filed by the receiver. 34 Cyc. 246.

2. The building was an asset in the hands of the receiver; he should have been charged with its value. He had no right to dismantle it and parcel it out to creditors who had liens for material. 61 F. 546; 68 N.E. 20.

3. It is reversible error for a chancellor to direct a receivership verbally. His orders should all be made a matter of record. It was also error to allow the receiver to buy part of the property.

4. It was error to appoint a receiver who has an attachment suit pending--a party in interest--and to allow him to buy. 61 F 546, 549. It was the receiver's duty, immediately upon his appointment, to intervene in his own attachment suit and move to dissolve. Kirby's Digest, § 4055.

5. The chancellor erred in approving the receiver's final report, showing a sale privately, and applying the proceeds to his own debt. He was allowed to plunder the estate and the poor laborers got "left." A decree should be entered for $ 409.27, the amount of the preferred claims against the receiver.

W. A Leach, for appellee.

1. It is not mandatory that an inventory should be filed. It was a matter of discretion for the court and no abuse is shown. No proper showing was made and no injury resulted.

2. There was a vendor's, or materialman's lien on the saw mill building; the receiver was powerless. It was never an asset in the hands of the receiver. The owners removed the roofing, under the directions of the chancellor.

3. It is not against the law, nor public policy, to appoint a party receiver who has an attachment suit pending.

4. No principle of equity was violated in permitting the receiver to buy lumber no one else would have. None of the creditors could use it and no one else wanted it. Under all the proof the receiver discharged his duties properly, and no injury is shown. He accounted for all property that came into his hands. The burden was on appellants to sustain their objections. The findings of the chancellor are sustained by the evidence. The decree should be affirmed.

OPINION

HUMPHREYS, J.

This suit was commenced in the Pulaski chancery court for the purpose of winding up the partnership affairs of Brown & French. It became necessary to appoint a receiver. The first receiver appointed was C. R. Powell, who resigned, and the court appointed J. W. Letchworth, one of the creditors, receiver in succession. J. W. Letchworth was appointed receiver at his own suggestion on application of the other creditors in order to save fees and other expenses incident to the receivership. At the time C. R. Powell resigned he filed a report showing a small balance due him for expenses. He turned the assets, which consisted largely of lumber and household effects in and about a sawmill located at Letchworth, Arkansas, over to his successor, J. W. Letchworth. During the administration of C. R. Powell he had been ordered to file an inventory but the matter was overlooked. No order was made by the chancellor requiring J. W. Letchworth, as receiver in succession, to file an inventory. No request was made by appellants for him to do so until September 21, 1915, at which time disposition had been made of practically all the assets in his hands.

The matter proceeded until the receiver in succession filed his second report, at which time the other creditors filed exceptions to the report, which were overruled by the chancellor.

This appeal is prosecuted to correct alleged errors of the chancellor in overruling the exceptions to said report.

The first alleged error urged for reversal is that the chancellor refused to require the receiver to file an inventory. The statutes of Arkansas do not require him to do so; no order had been made by the court requiring J. W. Letchworth, as receiver, to file an inventory until disposition had been made of the assets. The estate was small and the assets had been converted either into money or applied to the payment of his own judgment at the time the creditors made their application. It is the better practice in all cases for receivers to file inventories of the estates over which they are appointed, but we think this a belated request and cannot find that the chancellor committed reversible error in refusing to require the receiver to file an inventory.

The second alleged error consisted in the refusal of the chancellor to...