Stroud v. Henderson
| Decision Date | 25 November 1929 |
| Docket Number | 2 |
| Citation | 21 S.W.2d 871,180 Ark. 459 |
| Parties | STROUD v. HENDERSON |
| Court | Arkansas Supreme Court |
Appeal from Benton Chancery Court; Charles M. Rice, Special Chancellor; affirmed.
STATEMENT OF FACTS.
Appellee brought this suit in equity against appellants to set aside a transfer of stock in certain corporations from H. L. Stroud to Sallie R. Stroud, and to impound the dividends held by the corporation, for the purpose of paying an indebtedness of H L. Stroud. The suit was defended on the ground that the certificates of stock which are sought to be set aside as fraudulent and void, and the dividends arising therefrom to be impounded for the purpose of paying a judgment against H L. Stroud, belonged to Sallie R. Stroud, and that he had no interest whatever therein.
Appellee J. M. Henderson, recovered judgment in the circuit court against H. L. Stroud in the sum of $ 1,575.50. Stroud appealed to this court, and the judgment was affirmed on June 7, 1926. Stroud v. Henderson, 171 Ark. 538, 284 S.W 45. The present suit was filed on May 13, 1927. The complaint alleges that H. L. Stroud, by transferring the stock in question to his wife, Sallie R. Stroud, has conveyed his property to such an extent that appellee is unable to collect said judgment.
The facts necessary to a determination of the issues raised by the appeal may be briefly stated as follows: H. L. Stroud Mercantile Company was established about forty-five years ago. For some years H. L. Stroud was the manager of the corporation. His wife, Sallie R. Stroud, owned nearly all of the stock in the corporation, and had paid for it by means of an inheritance of $ 15,000 from her father. Finally all the shares in the corporation were transferred to her. Inasmuch as the chancellor found the issue on this branch of the case in favor of appellants, and appellee has not prosecuted an appeal, no further statement of the facts on this branch of the case need be made.
The Rogers Wholesale Grocery Company was organized on the 9th day of August, 1905. H. L. Stroud was the owner of 100 shares of stock of the value of $ 25 each. The president of the corporation filed a list of stockholders, and a financial statement of the corporation in the office of the county clerk on February 12, 1909, which showed that H. L. Stroud owned 816 shares in the corporation. The same report filed and recorded in the county clerk's office on February 14, 1910, showed H. L. Stroud to own 1,000 shares. In the report filed March 2, 1911, Sallie R. Stroud was shown to own 800 shares and H. L. Stroud 200 shares. In the report filed February 12, 1912, Sallie R. Stroud was shown to own 800 shares and H. L. Stroud 202 shares. In the report filed on the 23d day of January, 1913, Sallie R. Stroud was reported to own 1,600 shares and H. L. Stroud two shares. On the 5th day of February, 1915, the report showed Sallie R. Stroud to own 3,200 shares and H. L. Stroud to own four shares. The same was in the report filed for the years 1916 to 1919, inclusive. The annual certificate made by the president on April 12, 1921, showed Sallie R. Stroud to own 3,200 shares and H. L. Stroud to own four shares. On the 14th day of April, 1921, the corporation was authorized to increase its capital stock, and to divide the stock into shares of the face value of $ 100. On the 15th day of February, 1923, the president's annual certificate filed in the office of the county clerk showed H. L. Stroud to own two shares and Sallie R. Stroud to own 1,500 shares. The record continued to show the same fact from the year 1924 to the report filed on the 6th day of February, 1929.
Evidence was adduced by appellee tending to show that the shares of stock belonged to H. L. Stroud, and were transferred by him to his wife in fraud of the rights of his creditors. On the other hand, evidence was adduced by appellants tending to show that H. L. Stroud was not indebted to appellee or to any one else at the time the shares of stock in the Rogers Wholesale Grocery Company were transferred to his wife. The record does not show any attempt to comply with the provisions of § 5716 of Crawford & Moses' Digest regulating the transfer of stock in so far as it affects the rights of creditors is concerned.
The chancellor found the issues in favor of appellee, and it was decreed that appellee have and recover from H. L. Stroud and the Rogers Wholesale Grocery Company, as garnishee, the sum of $ 2,041.90. The garnishee was ordered and directed to pay said sum out of the dividends of the stock of said company held in the name of Sallie R. Stroud. H. L. Stroud gave a supersedeas bond, and the case was duly appealed to this court.
Decree affirmed.
Duty & Duty and McGill & McGill, for appellant.
Paul Anderson and John W. Nance, for appellee.
HART, C. J., (after stating the facts).
Under our view of the law, the issues raised by the appeal have been settled by the construction already placed by this court under § 1716 of Crawford & Moses' Digest, which reads as follows:
"Whenever any stockholder shall transfer his stock in any such...
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