Siloam Springs Ice Co. v. McCulloch

• Citation: 148 S.W.2d 327
• Decision Date: 10 March 1941
• Docket Number: No. 4-6236.,4-6236.
• Parties: SILOAM SPRINGS ICE CO. et al. v. McCULLOCH.
• Court: Arkansas Supreme Court

Page 327

148 S.W.2d 327

SILOAM SPRINGS ICE CO. et al. v. McCULLOCH.

No. 4-6236.

Supreme Court of Arkansas.

March 10, 1941.

Appeal from Benton Chancery Court; Lee Seamster, Chancellor,

Action to recover a sum alleged to have been paid under duress by Siloam Springs Ice Company and others against Zoe McCulloch, executrix. From an adverse decree, plaintiffs appeal.

Affirmed.

Vol T. Lindsey, of Bentonville, for appellants.

Duty & Duty, of Rogers, for appellee.

McHANEY, Justice.

Appellant Siloam Springs Ice Company was a domestic corporation in Siloam Springs for many years prior to its dissolution in June, 1937. Its capital stock consisted of 2,000 shares of the par value of $25 each, of which the late Will D. Sweet, husband of appellant, Edith G. Sweet, owned 1,374 shares, the latter owned 625 shares and Ed C. McCulloch, now deceased, owned 1 share. In 1932, Mr. McCulloch loaned the corporation $25,000, for which bonds were issued, secured by a mortgage on the company property. In 1923, there being $17,500 of this indebtedness unpaid, same was refunded in this amount, payable over a period of twelve years at 8 per cent, for which coupon bonds were issued. At that time the corporation was delinquent in interest payments in the sum of $1,500 and a separate note was given Mr. McCulloch for this amount. On June 16, 1936, Will D. Sweet died, and three days later the ice plant suffered a serious fire loss, covered by insurance with a loss-payable clause in favor of Mr. McCulloch. Out of the amount realized from the insurance, repairs were made to the ice plant and the sum of $1,000 was paid on the $1,500 note and there was left a balance of the insurance money in the sum of $321.39.

After the death of her husband, appellant Edith G. Sweet and her children, the other appellants, owned all the stock in the corporation, except one share, and it had been endorsed in blank and delivered to her. She decided to sell the assets of the corporation and liquidate its affairs. To this end she began negotiations with prospective purchasers. She applied to Mr. McCulloch to know what amount he would be willing to accept in full settlement of the debt due him, and on December 30, 1936, at a conference in the office of her attorney he agreed to accept the principal sum due on the bonds, $17,500, if paid within 90 days from that date, together with the $321.39 in the insurance account, and a written statement in the form of a letter to the Siloam Springs Ice Company was executed by him and delivered to her attorney. On January 5, 1937, appellants Siloam Springs Ice Company and Mrs. Sweet entered into a written contract with Roy A. Drum, of Ft. Smith, to sell to him the ice plant property and a small tract adjacent thereto belonging to her for $32,500, which contract was ratified by the stockholders and directors on January 7, and the president and secretary were authorized and directed, on a resolution by Mr. McCulloch, to make a deed and carry out the terms of the contract.

Shortly after the execution and delivery of the letter above mentioned, in which Mr. McCulloch agreed to accept $17,500 in full of his debt, he figured up the accrued and past-due interest on his bonds and found that it amounted to about $3,400. He immediately notified Mrs. Sweet's attorney Mr. A. L. Smith, that he could not stand such a loss, and that he had offered to accept the principal debt as payment in full on the assurance of Mrs. Sweet that the interest did not exceed $1,000 or $1,500. A conference was called in his office by said attorney for January 18, where the parties met and had considerable argument over the matter, and finally Mr. McCulloch agreed to stand a...