Warren Company v. Neel
| Decision Date | 06 May 1968 |
| Docket Number | Civ. A. No. 1092. |
| Citation | 284 F. Supp. 203 |
| Parties | The WARREN COMPANY, Inc., Plaintiff, v. Joe C. NEEL and Rufus Neel, d/b/a Food Center, Neel's Food Center, Inc., Kimbell Milling Company, Buddies Super Markets, Inc., Defendants. |
| Court | U.S. District Court — Western District of Arkansas |
Wootton, Land & Matthews, Hot Springs, Ark., for plaintiff.
W. H. Arnold, McMillan, McMillan & Turner, Arkadelphia, Ark., for the Neels and Neel's Food Center.
Crumpler, O'Connor, Wynne & Mays, El Dorado, Ark., for Kimbell and Buddies.
The plaintiff, by its complaint herein, is seeking to obtain restitution of property involved herein or, in the alternative, if the court deems it more equitable, a joint and several judgment against each of the defendants in an amount which fairly represents the value of plaintiff's property wrongfully applied to the defendants' benefit, and for its costs.
It appears that the court should state the underlying facts before abstracting the pleadings filed by the parties in the instant case.
The plaintiff, The Warren Company, Inc., is a corporation incorporated under the laws of the State of Georgia with its principal place of business in Atlanta, Georgia.
The defendants Joe C. Neel and Rufus Neel, d/b/a Food Center, are citizens of Arkansas and residents of Arkadelphia, Clark County, Arkansas.
The defendant Neel's Food Center, Inc., is a corporation incorporated under the laws of the State of Arkansas with its principal place of business in Arkadelphia.
The defendant Kimbell Milling Company is a corporation incorporated under the laws of the State of Texas and has its principal place of business in Fort Worth.
The defendant Buddies Super Markets, Inc., is a corporation incorporated under the laws of Arkansas with its principal place of business in Magnolia.
Prior to September 1, 1962, the defendants Joe C. Neel and Rufus Neel were doing business as Food Center. On September 1, 1962, the business was incorporated as Neel's Food Center, Inc., and the business as Food Center was dissolved and there was no partnership between Joe C. Neel and Rufus Neel known as Food Center after September 1, 1962.
On December 27, 1963, plaintiff delivered to Joe C. Neel certain equipment and fixtures required in the operation of the grocery store. On that date Joe C. Neel signed a conditional sales contract and a promissory note agreeing to pay $18,629.87 for the property purchased at that time from the plaintiff.
On August 17, 1964, the plaintiff sold by conditional sales contract to Joe C. Neel certain equipment and machinery for the sum of $2,579.40, and on the same date Joe C. Neel executed and delivered a promissory note to plaintiff evidencing the indebtedness. The purchaser or purchasers of the equipment and machinery defaulted on the payment of the purchase price, and on January 12, 1967, there was $10,557.04 due and owing on the note of December 27, 1963, and on January 12, 1967, there was due and owing on the note of August 17, 1964, the sum of $1,146.40.
On January 15, 1964, the plaintiff filed with the Circuit Clerk and Ex-Officio Recorder of Clark County, Arkansas, as financing statement No. 85 of that office, a copy of the conditional sales contract of December 27, 1963; and on January 16, 1964, a copy of the sales contract was filed as a financing statement with the office of the Secretary of State of the State of Arkansas under financing File No. 14002.
On August 26, 1964, the plaintiff filed with the Circuit Clerk and Ex-Officio Recorder of Clark County, Arkansas, as financing statement No. 1077 of that office, a copy of the conditional sales contract of August 17, 1964, and on the same date filed a copy of the aforesaid conditional sales contract as a financing statement by plaintiff with the office of the Secretary of State, State of Arkansas, under financing statement File No. 18635.
On May 7, 1965, the defendant Neel's Food Center, Inc., executed and delivered to the defendant Kimbell Milling Company, a security agreement and financing statement to secure the payment of its promissory note in the amount of $33,000, dated May 7, 1965. The note was signed:
The security agreement and financing statement was filed in the office of the Circuit Clerk and Ex-Officio Recorder of Clark County, Arkansas, on May 7, 1965, and appears under file No. 542 of the financing statement records of Clark County. A copy of the security agreement and financing statement was filed with the Secretary of State for the State of Arkansas on October 4, 1965, and appears under file No. 27586 in the financing statement records of that office.
Defendant Kimbell Milling Company instituted suit, No. 6557, in the Chancery Court of Clark County, Arkansas, against Neel's Food Center, Inc., following its default on the payment of its promissory note and the security agreement. The plaintiff, The Warren Company, Inc., was made a party defendant, and filed its answer in which it alleged that the Kimbell Milling Company had actual knowledge of the existing lien held by Warren when it first started doing business with Neel's Food Center, Inc., and with Joe Neel. Warren set forth in full its claim as evidenced by the security agreements, and prayed that the complaint of Kimbell Milling Company be dismissed insofar as the liens claimed by Warren were concerned; that the court dismiss the claims of the Kimbell Milling Company because it had actual notice by Joe Neel of the existing liens of Warren; that the court find that the liens of Warren were senior and superior to those of Kimbell and all other parties; and that the said equipment listed in the financing statements be freed from all claims of other parties to the litigation and that Warren's title to said equipment be found to be paramount as stated in the financing statements.
On April 5, 1967, the Chancery Court entered the following order:
The Chancery Court then proceeded to dispose of the claims of the other parties and rendered judgment in favor of Kimbell for the amount of the indebtedness due it, which included interest and attorneys' fees, subject only to the claim of National Cash Register in the sum of $772.86 and the claim of Merchants and Planters Bank & Trust Company for $225.58, and declared a lien upon all of the equipment, including that claimed by Warren. A receiver was appointed to take charge of the property, and on March 22, 1967, the Chancery Court entered an order directing the receiver to proceed to sell the assets of Neel's Food Center, Inc., on April 27, 1967, at 10:00 a.m. at public auction to the highest bidder at the premises of Neel's Food Center, Inc., at which sale Kimbell was the highest and best bidder for the sum of $39,000.00. The judgment in favor of Kimbell was credited with such bid after deduction of costs and claims in the amount of $6,074.57 which had priority to the claim of Kimbell, resulting in a total credit on the judgment of $32,925.43.
The property purchased by Kimbell at the sale was subsequently sold by Kimbell to the defendant Buddies Super Markets, Inc. All of the capital stock of Kimbell is owned by the Estate of Kay Kimbell. The ownership of Buddies Super Markets, Inc., is as follows:
Estate of Kay Kimbell — 40%
J. C. Pace & Company — 50%
A. L. Scott — 10%
The property purchased is now in the store operated by Buddies Super Markets, Inc.
On May 26, 1967, Warren wrote and mailed to Joe C. Neel, Individually, and d/b/a The Food Center; Neel's Food Center, Inc., Kimbell Milling Company; and Buddies Super Markets, Inc., the following letter:
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