Southark Trading Co. v. Pesses, 4-9982

• Decision Date: 16 February 1952
• Docket Number: No. 4-9982,4-9982
• Citation: 254 S.W.2d 954,221 Ark. 612
• Parties: SOUTHARK TRADING CO. et al. v. PESSES et al.
• Court: Arkansas Supreme Court

Page 954

254 S.W.2d 954

221 Ark. 612

SOUTHARK TRADING CO. et al. v. PESSES et al.

No. 4-9982.

Supreme Court of Arkansas.

Feb. 16, 1952.

Jabe Hoggard and Crumpler & O'Connor, El Dorado, for appellants.

Stein & Stein and J. S. Brooks, El Dorado, for appellees.

HOLT, Justice.

This action was begun in the Circuit Court by Southark Trading Company against appellees, Pesses and Miller, to obtain a judgment on two notes amounting to $1409.30 (principal and interest), which had been executed by appellees to C. R. Olson and wife, and by them transferred and assigned to appellant, Southark. The cause was later transferred to equity. Pesses and Miller answered the complaint, admitting the execution of the notes, and in a cross-complaint asked that C. R. Olson and wife be made defendants, and alleged that the two notes had been delivered to the Olsons in part payment of all the stock and assets of Concrete Products Company, a corporation owned by the Olsons, which had been purchased by appellees from Olsons and that following the purchase appellees were required to pay to the United States Government $1172.02 on a deficiency assessment on income taxes levied against the corporation and this amount which they were required to pay should be offset against the amount they owned Southark on the two notes.

Trial resulted in a decree in favor of appellees. The findings of the court were, in part, as follows:

'On April 15, 1949, in connection with the purchase of all stock of Concrete Products Company, a corporation, the Defendants, H. G. Miller and I. L. Pesses, executed and delivered to C. R. Olson and his wife, Kathryn I. Olson, a series of promissory notes evidencing a part of the purchase price of the stock of said corporation.

'That two of said notes of April 15, 1949, in the total principal sum of $1224, which notes matured in the amount of $611 on September 15, 1950, and in the amount of $613 on October 15, 1950, were acquired previous to the filing of this suit by Southark Trading Company by endorsement from C. R. Olson and his wife, Kathryn I. Olson.'

That Southark is entitled to recover from Pesses and Miller the amount of the two notes, $1409.30, with interest from date of the decree.

'That, however, the Court finds that because of certain representations and statements made by the Cross-Defendant, C. R. Olson, to H. G. Miller and I. L. Pesses at the time of the execution of said two notes above described on April 15, 1949, and prior to said date, the Defendants, H. G. Miller and I. L. Pesses, as the successors of Concrete Products Company, a dissolved corporation, have been damaged in the total sum of $1172.02 on account of a disallowance by the United States Government of a certain income tax refund claim made by Concrete Products Company previous to April 15, 1949, and by a levy on January 5, 1950, by the United States Government on a deficiency assessment for additional income taxes determined to be due and owing by Concrete Products Company, a corporation, for the tax year 1946.

'That the Plaintiff, Southark Trading Company, is not a holder in due course of the above mentioned notes of April 15, 1949, and did not acquire said notes prior to the maturity thereof and that the acquisitions of said two notes by Southark Trading Company was made subject to any defenses that H. G. Miller and I. L. Pesses might urge against said notes held by the Cross-Defendants, C. R. Olson ans his wife, Kathryn I. Olson.

'That on account of the damages and loss sustained by Harry G. Miller and I. L. Pesses in the total sum of $1172.02 above described, the said defendants, H. G. Miller and I. L. Pesses, are entitled to recoup and offset said damages in said amount against the judgment above...