Senter v. Williams

• Decision Date: 19 October 1895
• Citation: 32 S.W. 490
• Parties: SENTER et al. v. WILLIAMS et al.
• Court: Arkansas Supreme Court

32 S.W. 490

SENTER et al. v.WILLIAMS et al.

Supreme Court of Arkansas.

October 19, 1895.

Appeal from circuit court, Hempstead county; Rufus D. Hearn, Judge.

Bill by Virginia J. Williams and others for the appointment of a receiver for the firm of Baird & Carruth, who had made a general assignment, the assignee having been unable to make bond.A receiver was appointed, and a cross complaint in the nature of a creditors' bill was filed, in which plaintiff and other creditors joined, seeking to have the assignment set aside as fraudulent.After a decree annulling the assignment, and directing the receiver to distribute the proceeds of the property among the creditors who had come in, but before distribution of the fund, Senter & Co. filed two interventions, both of which were denied, and the interveners appeal.Modified.

Baird & Carruth, merchants at Washington, Hempstead county, failed in business and made a general assignment.Virginia J. Williams, one of the preferred creditors, filed, in behalf of herself and all other creditors, a suit setting up that the assignee had been unable to make bond and praying for the appointment of a receiver.The assignee was appointed receiver.Barbara Hubbard and two other creditors of Baird & Carruth filed in the suit their cross complaint, in the nature of a creditors' bill, on behalf of themselves and all other creditors of the assignors who might wish to join them, alleging that the assignment was fraudulent, because the assignors had intentionally withheld a part of their property and for other reasons.Several creditors, including the original plaintiff, came in and adopted the allegations of the cross complaint.Upon a hearing the assignment was adjudged to be fraudulent, and was set aside, and it was ordered that the receiver distribute the proceeds of the property among the creditors who had intervened.After the decree, and before the fund had been distributed, Senter & Co. intervened, setting up that they had a claim upon which they had recovered judgment in the sum of $50,000 against Baird & Carruth, and praying that they be allowed to share in the distribution.Their petition was disallowed.On the same day they filed another intervention, alleging that, as security for their indebtedness, and before the failure, Baird & Carruth had transferred to them a note of one Phillips, secured by mortgage, and that the receiver had collected the rent on the mortgaged land, amounting to $140, when the land had never belonged to Baird & Carruth, and said moneys should go to Senter & Co.; that Baird & Carruth, before the failure, sold another tract to one Faucette, and transferred the purchase-money lien notes to Senter & Co. as security, but that the receiver had taken possession of the land, rented it to Faucette, and collected the rents, amounting to $40; that Baird & Carruth had sold some land to Parker & Rike, and transferred the purchase-money lien notes to Senter & Co., and that the receiver had taken possession of said land, rented it to Parker & Rike, and collected the rents, amounting to $90; that Baird & Carruth sold one Sexton another tract, and transferred the purchase-money lien notes to Senter & Co. before their failure, but that the receiver had taken possession of the land, and collected the rents, amounting to $250; that Baird & Carruth had sold another tract to one Mitchell, and had transferred the purchase-money lien notes to Senter & Co. before their failure, but that the receiver had taken possession of said land, rented it to said Mitchell, and collected the rent, amounting to $50; that Baird & Carruth are insolvent; that said lands and the other securities of Senter & Co. are inadequate to protect them; that the money was collected by the receiver without their knowledge or consent; and they pray that the amounts of rents collected, whether in money or notes, be turned over to them.This intervention, likewise, was denied, and Senter & Co. have appealed from both decrees.

Rose, Hemingway & Rose and J. H. Arnold, for appellants.J. W. House, J. D. Conway, and W. S. Eakin, for appellees.

HUGHES, J.

Though it is the favorite policy of a court of equity to distribute assets equally among creditors pari passu, yet, whenever a judicial preference has been established, by the superior legal diligence of any creditor, that preference is always preserved, in the distribution of assets, by the court.McDermutt v. Strong, 4 Johns. Ch. 687.Here the appellees, to whom the reward of diligence was granted, filed their bill to set aside the assignment for fraud, and succeeded.The appellants contented themselves with standing by and seeing the appellees carry on the contest at their own labor and expense.This seems to come within the maxim, "Vigilantibus non dormientibus jura subservient."The creditor who first files his bill obtains thereby...