Bennett v. Her Creditors

On Motion to Dismiss Appeal.

The opinion of the court was delivered by

The appellants obtained two orders of appeal in open court from the judgment — one to the Circuit Court of Appeals and the other to this court.

They were applied for and obtained at the same time. The appeal to the Circuit Court of Appeals was prosecuted and dismissed for want of jurisdiction, after which this appeal was prosecuted.

The first appeal prosecuted was a nullity, and the second valid and legal. It was in force and could be prosecuted in accordance with the order granting it. Because the other order obtained at the same time for an appeal was null and void it could not affect the order of appeal made returnable to this court.

The motion to dismiss the appeal is therefore denied. '

On the Merits.

The plaintiff applied for a respite and obtained an order for a meeting of creditors. The meeting was held and the respite was granted by the creditors.

*1020The homologation of the proceedings of the meeting of the creditors was opposed by the Southern Grocer Company, Williams Tobacco Company, Wellhouse & Sons and Hancock Bros. & Co., creditors of plaintiff, who appeared at the meeting and voted against the respite being granted. In number, twelve creditors voted for the respite and seven against it. In amount, the sum of #13,028.21 was voted for and the sum of #627.39 against it.

The opponents allege in their oppositions: 1. That the plaintiff is now, and was at the time of filing her petition for respite, hopelessly insolvent. 2. That the application for relief is not made in good faith, but for purposes of delay. 3. The schedule of liabilities does not correctly show the condition of plaintiff’s affairs, as it omits the legal mortgage'in favor of the minor, James Bennett, and embraces as creditors those who have no valid claim against plaintiff, particularly L. D. McLain. In case the respite should be granted opponents pray that plaintiff be required to furnish security, as required by law. ,

The proceeding of the meeting of creditors was homologated, the prayer of opponents denied, except as to the requirement for security. The regularity of the proceedings is not questioned; no error or fraud is alleged. We think the testimony shows that the plaintiff is solvent, but embarrassed.

L. D. McLain swears that the value of the assets is a fair one.

M. Mecum, clerk of the court, says that in 1887, 1888, 1889, 1890,-he was in the employment of Mrs. Bennett. He is, so he swears, familiar with the parties whose names appear on the schedule, and he estimates that 50 per cent, of the notes and accounts are collectible.

O. O. Bridges, in his testimony, says 50 per cent, would be a fair collection of the notes and accounts.

O. P. Thornhill, an attorney at law, says that a great many of the debtors whose names appear upon the schedule are negroes, and but few of them own real estate. His opinion is that, on an average, not over 25 per cent, of the notes and accounts could be collected. Quite a number of the negro debtors, he says, have resided on plaintiff’s place at different times and the majority of them own some personal property. During the past eighteen months he had seen and known very little of them. These are the only witnesses as to the value of the notes and accounts. We think the preponderance *1021of testimony is to the effect that 50 per cent, of them can be collected. The value of the real estate is not questioned. Deducting 50 per cent, from the notes and accounts, the assets will exceed the liabilities. We need not review the second ground, as the object of obtaining the respite is for delay to meet the obligations of the debtor.

On the second ground alleged by opponents, the testimony shows that L. D. McLain is a creditor of plaintiff for the amount .for which he was placed on the schedule.

James Bennett is the son of plaintiff, a child fourteen years of age. This minor’s mortgage omitted from the schedule is the recorded abstract of the amount of the inventory of the effects of his father’s succession. There is no evidence that the plaintiff owes the minor any sum of money. At all events his liability on said mortgage is contingent, and it may be that in a settlement of the community she may not owe him anything.

Oomplaint is also made that the schedule is not true and exact, and is not sufficiently definite. It is itemized; the notes and accounts are accurately described, and so is the immovable property. But the opponents claim that “mules, horses, cattle and farming implements attached to the plantation, $3106,” is too indefinite a description of this property. It is sufficiently identified with the plantation to which it is attached. The inventory, taken altogether, is a fair exhibit of plaintiff’s property and is a substantial compliance with the law.

The complaint that the'application for the respite was not made in good faith, we think is not sustained by the evidence.. It appears that the plaintiff referred her affairs to her brother and to her attorneys. To avoid the "necessity of a respite, .they advised a compromise with the creditors — the brother, L. D. McLain, offering to advance the money in case all the creditors accepted the. proposition. Some accepted and some declined the proposition, and the proposed settlement was of necessity abandoned. We find nothing in these several offers to adjust her indebtedness that impugns her good faith in her application for the respite,

Judgment affirmed.

*1022On Application for Rehearing.

On the application for á rehearing in this ease our attention is called to the fact that we have not considered as applicable to the case the authority referred to by opponents in case of Phillips vs. Creditors, 36 An. 904, and have omitted to notice in the opinion the “main ground ” upon which was based the appeal.

1. The case of Phillips vs. Creditors has no bearing on the facts in this case. The only statement of assets in that case was “ Merchandise, as per ledger and open accounts, horses, etc., $10,320.” In the case referred to we said such a schedule was equivalent 'to no schedule at all. The schedule in this case presents no such defects. The horses, mules, etc., are identified with the plantation to which they are attached and are valued.

2. In opponent’s brief it is stated in reference to the “ main ground” on which the application for a rehearing was the basis of the appeal, “Your honors will understand that while opponents did' not base their opposition on this specific ground, yet testimony quoted below was received without objection, and will of course be considered by the court.” In the application for a rehearing it is also stated, “ it is true that the above testimony is not directly responsive to any allegation in our opposition, but it was received without objection, and of course will be considered by the coart.” Not having been specifically alleged in the opposition, and the evidence not being responsive to any allegation made by opponents, we were of the opinion that this part of the opposition, urged only in the brief and in argument, was not seriously insisted upon by opponents from the following extract from their brief: “To take advange of this act [the failure of the deputy sheriff on the persuasion of plaintiff to seize ten bales of cotton on the plantation, which was afterward turned over to L. D. McLain, who had a privilege on it] of1 indulgence of the sheriff and remove the cotton to avoid its seizure was an act of extreme bad faith in plaintiff; but opponents have not held her individually responsible for the ungracious act.” The omission was not from inadvertence, as we had fully examined the record and the brief of opponents, and inferred from the facts and the brief that this point was not seriously pressed, but that the plaintiff was relieved from responsibility individually and the blame attached to her brother, and this explanatory para*1023graph was introduced in order to excuse her and criticise him. Opponents say in their brief: “The plaintiff had for quite a number of years been conducting business as a public merchant and there had beén nothing in her career to indicate that she was familiar with any of the various shifts and devices often resorted to by insolvent debtors to place their property beyond the reach of creditors, or to give an unfair preference to some of them. It was left for her 4 financial manager ’ to invoke and to put in operation through the machinery of the courts an equitable remedy, intended for the relief of the embarrassed but honest and solvent debtor,” etc.

Referring to the facts in the record, it appears that L. D. McLean had furnished the money and supplies that raised this cotton. This is not contradicted. He had a pledge and privilege upon it. The opponents do not assert any privilege upon it. They are ordinary creditors.

The proceeds of the sale of this cotton could not be ratably, as contended by opponents, applied to the payment of all the debts. By granting the respite the creditors do. not relinquish the privilege and pledge they may have on particular property. Mrs. Bennett, at any time after the respite was granted could — in fact, she was bound, under her agreement to do so — turn the cotton or its proceeds over to the furnisher of supplies. He had a right to the proceeds of the sale sufficient to pay his privileged debt. The surplus only could he ratably applied to the payment of the other creditors.

Opponents were in no way injured by this disposition of the cotton. The evidence does not satisfy us that there was a surplus after paying the privileged debt. No complaint is made of the amount for which the cotton was sold.

McLain’s debt for supplies furnished on the crops raised and gathered amounted to $3000, and for the current year $2250, which was placed on the schedule.

We do not see in what manner opponents have been injured, and we are satisfied that the plaintiff has made a fair exhibit of her assets and liabilities, and has been guilty of no fraud in applying for relief.

Rehearing refused.