Tapp v. Williams

• Decision Date: 03 June 1907
• Citation: 103 S.W. 161,83 Ark. 182
• Parties: TAPP v. WILLIAMS
• Court: Arkansas Supreme Court

103 S.W. 161

83 Ark. 182

TAPP v. WILLIAMS

Supreme Court of Arkansas

June 3, 1907

Appeal from Union Circuit Court; Charles W. Smith, Judge; affirmed.

STATEMENT BY THE COURT.

Tapp Leathers & Company sued the firm of Williams & Pratt in the Union Circuit Court on account for $ 573.20.

The defendants, Williams & Pratt, answered, denying that they were indebted to appellants in any sum, and set up by way of defense the following:

"That they, being in failing circumstances and insolvent, notified the plaintiffs and all others of the defendants' creditors of defendants' condition, and offered to make full surrender to R. G. Harper, as trustee of all their property for the benefit of plaintiffs and defendants' other creditors. That this proposition was accepted by plaintiffs and the other creditors of defendants, and that, acting under this agreement, they made a full surrender of all their property in satisfaction of their debts, and same is now in the hands of R. G Harper, as trustee, for the benefit of plaintiffs and defendants' other creditors, in the said proceeds of said property to be prorated amongst the creditors of defendants. That defendants have in all things fully complied with agreement mentioned herein, and have made a full and complete surrender of all the assets, and all of which was well known to plaintiffs at the institution of this suit. Defendants, further answering, say that, by reason of the agreement and surrender of their property aforesaid, the other creditors of defendant have acquired a valuable interest in said assets; that the plaintiffs, if permitted to prosecute their suit herein and subject said assets to the payment of their debt in full, would practically absorb all the assets so surrendered."

They pray that the suit be dismissed with judgment in their favor for costs.

Appellants filed allegations and interrogatories against R. G. Harper as follows: "That the said R. G. Harper, garnishee herein by virtue of an alleged assignment for the benefit of creditors or in some other way, came into possession of seven hundred dollars, the same being the proceeds or a part thereof of the assets of the defendants herein."

Plaintiff propounds the following interrogatory to the said R. G Harper, garnishee herein:

"Has the sum of seven hundred dollars, or any other sum or any goods, chattels, moneys, credits or effects belonging to the defendants herein, come into your possession, directly or indirectly, by virtue of an assignment for the benefit of creditors, real or alleged, or in any other way, and were they in your possession at the time of the service of the writ of garnishment herein?"

Appellee Harper as garnishee answered as follows:

"That the sum of seven hundred dollars came into his hands by virtue of written agreement and further by an agreement between him and the said defendants to the effect that he was to hold same and endeavor to get the creditors of said defendants to accept a proportionate part of same and the other assets of said firm, and that said creditors did so agree, and that portion of said fund was in his hands as such at the time of the service of the garnishment herein, and was and is now held by him in trust for the said creditors of said Williams & Pratt as their attorneys."

The court, on demurrer to the answer, rendered judgment against Williams & Pratt for the amount of the account and interest, amounting to $ 670.40. On the issue raised by the garnishment, R. G. Harper testified as follows:

"About the Christmas holidays of 1901, I went to see Williams & Pratt in the collection of some claims. They stated that they were indebted over $ 15,000. A remnant of a stock of goods and some notes and accounts composed their assets. They desired to turn over to me as trustee for the creditors the assets they had. They turned them over to me subsequently. At the time I understood all the creditors had agreed to accept them. I do not recall whether I had an inventory made. The $ 700 I received was derived directly from the sale of the stock of goods. There was a written article or written agreement. I do not know that I ever showed it to plaintiffs' attorney. I had forgotten about having it until Mr. Chew told me he had seen it. I think plaintiffs' attorney asked me once or twice about the assignment, and I told him I would look it up. This is the only instrument executed as my authority for acting as trustee. I did not understand that I was taking an assignment under the law of assignments. I looked for the paper recently, and found it among the Williams & Pratt accounts. It is my recollection that at the date of...