56 Ark. 414 | Ark. | 1892
The facts stated in the original complaint do not entitle the plaintiffs to relief in a court of equity, and so much of the decree appealed from as dismisses that complaint is affirmed. Ford v. Judsonia Mercantile Co. 52 Ark. 426; Walker v. George Taylor Com. Co., ante p. 1.
The material allegations of the cross-complaint are denied, and the proof adduced does not support them, The sale of the merchandise could not be avoided, without showing that Demby & Wymer made it to defraud their creditors, and that the purchasers, Gilkerson-Sloss Commission Co. .and Hill & Sons, participated in the fraud. Trieber v. Andrews, 31 Ark. 167. But the proof is that the goods were sold -in satisfaction of debts justly d.ue to the purchasers, and that the price obtained for them was not less than their value. Such being the nature of the transaction, it was but a preference of creditors which the law permitted the insolvent debtors to give, and the preferred creditors committed no fraud in'accepting it, even if they knew the effect would be to prevent the collection of other claims. Christian v. Greenwood, 23 Ark. 258; Bump, Fraud. Conv. p. 186.
It is said, however, that the sale was made pursuant to a previous agreement entered into by the vendors and vendees for the purpose of giving the latter an unfair advantage over the other creditors. And it is contended that such an agreement is shown by the assistance which the Gilkerson-Sloss Commission Co. and Hill & Sons gave to Demby & Wymer in procuring the extension of time granted by creditors of the latter, and also by efforts made by the former to induce other creditors to bring no suits for the recovery of their debts. The extension referred to was given in March, 1889, and it appears that the creditors granting it took notes for their debts payable at three, six, nine and twelve months. The sale in question took place on the 4th of June, 1889, after the maturity of the extension notes due at three months, and after-it was known that they would not be •paid. It does not appear that the stock of merchandise had been increased in the meantime, or ■ that the sale would not have been equally advantageous to the purchasers before the extension was granted. So far as this record shows, Hill & Sons did nothing to aid in procuring the extension, beyond assenting to it themselves, and took no1 action to induce any creditor to refrain from suing. The Gilkerson-Sloss Commission Co. granted the extension, and spoke favorably of it to some of the other creditors. And one witness testifies that a person connected with that company told him, about the time the extension was granted, that they had no intention of taking any legal steps for the collection of their claim. But this was several months before the sale, and it is not proved that the person making the statement was an officer or business manager of the company, or that he ■controlled the collection of their debts. Another witness, a creditor who granted no extension, says that he understood John Gilkerson, the president of the Commission Company, to say that all the creditors would be upon an equal footing if the extension should be granted ; and that Gilkerson requested him not to sue. But Gilkerson testifies that he only made, to the creditor referred to, a statement of the facts communicated to his company, and expressed the opinion that Demby & Wymer would be better enabled to pay their debts if they obtained an extension. We find nothing in the evidence tending to show that the purchase of the merchandise was contemplated at the time the extension was granted, or that there was any agreement looking to a sale before the day on which it was made. On that day and prior to the sale it appears that the plaintiffs in the cross-complaint endeavored to obtain a confession of judgments for their debts ; and we cannot see that g-ood faith any longer required non-action on the part of the appellants.
The decree setting aside the sale will be reversed, and the cross-complaint will be dismissed.