Simmons Hardware Co. v. Rhodes

Citation7 F.2d 352
Decision Date15 June 1925
Docket NumberNo. 6771.,6771.
PartiesSIMMONS HARDWARE CO. et al. v. RHODES et al.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

Arthur L. Adams, of Jonesboro, Ark. (Morton Jourdan and Fred L. English, both of St. Louis, Mo., H. M. Cooley and Robert E. Fuhr, both of Jonesboro, Ark., and George N. Dunn, of St. Louis, Mo., on the brief), for plaintiffs in error.

J. T. Coston, of Osceola, Ark. (W. J. Driver and S. R. Simpson, both of Osceola, Ark., on the brief), for defendants in error.

Before SANBORN, Circuit Judge, and POLLOCK and SYMES, District Judges.

POLLOCK, District Judge.

The record in this case brings before this court for review this question: What is the legal effect of a written trust agreement of general assignment of all the property of a debtor for the benefit of creditors; said assignment being conditioned by a parol contemporaneous agreement that the debtor is to have all its debts absolutely satisfied and extinguished as a consideration for the making of the assignment?

This question came into this litigation by way of an amendment to the answer, and is pleaded in this language: "The facts are, as the plaintiff well knows, that on the 7th day of August, 1923, the plaintiff agreed if Segraves Hardware Company would turn over and deliver to G. N. Dunn and M. J. Burke, trustees, all of its assets, that the same would _____ received and treated as a payment and satisfaction in full the demand of plaintiff and other creditors, and thereupon the said Segraves Hardware Company executed and delivered to G. N. Dunn and M. J. Burke, trustees, an assignment or conveyance of all of its assets of whatever nature and wherever situated."

To this amendment to the answer so declaring, the written assignment to the trustees was attached and made a part of the same. However, the written assignment does not contain any such release as pleaded. Wherefore, if shown by defendants, the same must have been shown to rest in parol.

At the trial, the defense offered evidence to establish the release of the corporation from its indebtedness pleaded was made contemporaneously with the written agreement and as a consideration for its making, and that the same rested in parol. To this evidence plaintiff objected at the time, which objection was overruled and exception saved. The trial court charged the jury, if it found the written assignment was conditioned when made by the parol agreement for release of the corporation from its indebtedness claimed, then the corporate indebtedness was thereby extinguished, and a verdict for defendant should be returned. As a verdict was returned for defendant by the jury, it must have found the parol agreement was made as claimed by defendants.

This controversy and result arose out of this state of facts:

The Segraves Hardware Company, a corporation of Arkansas, was engaged in business at the town of Osceola, Mississippi county, Ark. Of this corporation one C. B. Segraves was president and Joe W. Rhodes, Jr., was secretary. The state of Arkansas has a statutory provision making it the duty of the president and secretary of all corporations to make certain reports, certify the same, and file with the county clerk of the county in which the corporation is engaged in business concerning its corporate actions and affairs. And if this corporate duty is not performed, another statute makes said officers liable for all debts contracted during the default of the officers. These statutory provisions are found in sections 1715 and 1726, Crawford & Moses' Digest of Arkansas Statutes, and provide as follows:

"1715. Annual Report. The president and secretary of every corporation organized under the provisions of this act shall annually make a certificate showing the condition of the affairs of such corporation, as nearly as the same can be ascertained, on the first day of January or of July next preceding the time of making such certificate, in the following particulars, viz: The amount of capital actually paid in; the cash value of its real estate; the cash value of its personal estate; the cash value of its credits; the amount of its debts; the name and number of shares of each stockholder; which certificates shall be deposited on or before the fifteenth day of February or of August with the county clerk of the county in which said corporation transacts its business, who shall record the same at length in a book to be kept by him for that purpose."

"1726. Liability of President and Secretary for Debts. If the president or secretary of any such corporation shall neglect, fail or refuse to comply with the provisions of section 1715, and to perform the duties required of them respectively, the person or persons so neglecting, failing or refusing, shall jointly and severally be liable to an action founded on this statute for all debts of such corporation contracted during the period of any such neglect or refusal, and shall be deemed guilty of a misdemeanor, and upon conviction shall be fined in any sum not to exceed five hundred dollars, and each and every day such person or persons shall so neglect to comply with the provisions of said section 1715 or fail or refuse to perform said duties, shall constitute a separate offense."

On August 7, 1924, the Segraves Hardware Company being heavily indebted, made what is called a trust agreement; the same being a general assignment of all its property to G. A. Dunn, a representative of the Simmons Hardware Company and M. J. Burke, a representative of the John Deere Plow Company, as trustees. A further like assignment seems to have been made on September 21, 1923. Shortly after the making of this assignment the officers of the hardware company and the trustees made or attempted to make a sale of the assets of the hardware company to a firm known as N. G. Cartright & Son of Osceola. However, this trade was never consummated, for the reason bankruptcy proceedings intervened, and the estate of the hardware company was administered in the bankruptcy court. As the indebtedness of the hardware company to Simmons Hardware Company and the John Deere Plow Company was quite large in amount, an action was brought by each of said companies against Segraves, the president, and Rhodes, the secretary, of said Segraves Hardware Company to enforce their statutory liability as provided in the statutes of Arkansas above quoted. By way of amendment to the...

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4 cases
  • Wabash Ry. Co. v. American Refrigerator Transit Co.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • 22 Julio 1925
  • Beal Burrow Dry Goods Co. v. Baker
    • United States
    • Supreme Court of Oklahoma
    • 16 Abril 1929
    ...creditors, is void upon its face. Collier v. Davis, 47 Ark. 367, 1 S.W. 684; Nelson v. Harper, 122 Ark. 39, 182 S.W. 519; Simmons Hdw. Co. v. Rhodes, 7 F.2d 352. ¶14 In the latter case, the deed of assignment did not contain the objectionable provision, and in the body of the opinion, it wa......
  • Brown Shoe Company v. Stone
    • United States
    • Supreme Court of Arkansas
    • 28 Febrero 1927
    ...... legal rights against their debtors." Simmons. Hardware Co. v. Rhodes, 7 F.2d 352. . .          Another. case decided by this court ......
  • Null v. Biogco, Inc., Docket No. 6649--50
    • United States
    • Court of Appeal of Michigan (US)
    • 25 Noviembre 1969
    ...of a debt means the creation or bringing into existence of a debt which theretofore had no actual existence.' Simmons Hardware Co. v. Rhodes (1925 CA 8), 7 F.2d 352, 355. Since the individual defendants are not personally liable under the statute, we need not consider defendant Eckert's all......

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