(220 S. W.)

the 5th day of that month they drove out to Brown's stave mill, which had, as before stated, been shut down since the preceding August, and, according to their testimony, on this trip Brown suggested to appellant the purchase of staves. They stopped at the mill plant and took dinner there that day with Cass, and began negotiations for the sale of 60,000 of the staves. When they got back to Womble the trade was closed that night at the hotel, and appellant gave Brown a check on his bank at Conway for the sum of $200, initial payment on the price of the staves; the check being marked so as to show that it was given for "timber." Payments were made thereafter by appellant to Brown from time to time on the purchase price. Very soon thereafter Brown began, with his employés, to haul the staves off of the yard and dump them in piles along the road. This was done evidently for the purpose of getting them off the stave yard, so that appellee could not claim them. Appellant purchased the hotel property from Brown and moved to Womble for the purpose of operating the hotel.

court took charge of all of the staves remain- | Womble; and Brown took him out to look at ing on the yard and vicinity, but a consider- land. This was in January, 1918, and on able portion thereof had been removed from the yard by appellant, T. J. Smith, and sold. Smith claims that he purchased 60,000 of the staves from Brown and paid him for them before the institution of this action, and he filed an intervention in this case, disputing appellee's right to claim the staves under its contract or to claim a lien on the staves. Appellant had removed a portion of the staves before the appointment of the receiver and sold the same, receiving therefor the sum of $697.50. He had also shipped a carload of the staves to Arkadelphia and the same were taken possession of by appellee. Appellant brought replevin suit in the circuit court of Clark county to recover possession of this carload of staves. That action was removed to the chancery court of Clark county on motion of appellee. Appellee answered the intervention plea of appellant in the present action, and made its answer a cross-complaint, alleging that the sale of staves by Brown to appellant was fictitious and fraudulent, and made for the purpose of cheating and defrauding appellee and interfering with it in the collection of its debt against Brown. The prayer of the crosscomplaint was for recovery from Smith of the sum of $697.50, the price of the staves sold by him, that appellant be restrained from prosecuting the suit in the Clark chancery court, that the rights of the parties in the carload of staves involved in that action be adjudicated in this action, and that appellant recover nothing, either on his intervention plea in this action or on his complaint in the Clark chancery court. The cause was heard on testimony introduced in open court, and decree was rendered dismissing appellant's intervention and giving appellee the relief prayed for. The intervener, Smith, alone has appealed.

[1] We deem it unnecessary to determine the question debated by counsel, whether or not appellee had an equitable lien under its contract with Brown for the manufacture of staves, for we are of the opinion that according to the preponderance of the evidence the charge of fraud and collusion in the sale of staves by Brown to Smith is fully sustained, and that appellee is entitled to have the conveyance set aside as a fraud on its rights as a creditor of Brown, who, according to the undisputed evidence, is insolvent. A very brief narrative of the testimony will disclose the character of the fraud attempted to be perpetrated by Brown and Smith on appellee.

Smith was not engaged in the stave business, and never had been so engaged. He was a farmer in Faulkner county, and went to Womble, Montgomery county, in search of farm lands to purchase. He fell in there with Brown, who was running a hotel at

The original purchase of the staves was, as before stated, on January 5, 1918, according to the testimony of Brown and appellant; but the sale was not consummated by the execution of a written bill of sale until February 8, 1918. Appellant denied that he knew anything about the trouble between Brown and appellee, or that Brown was financially embarrassed. On the other hand, appellee introduced testimony, particularly that of witness Cass, who testified that on the day appellant and Brown were out at the mill plant he told appellant enough of Brown's condition to apprise him of the fact that he was heavily indebted to appellee. He said that he told appellant that the mill was shut down because appellee had quit "financing" Brown and had shut the mill down, and that the staves on the yard were in dispute between Brown and appellee. Cass also testified that about a month after that appellant told him that he believed he could make some money by buying the staves. There is other testimony of statements made by appellant, considerably after the time at which he says he bought the staves, in which he stated that he was thinking of purchasing the staves. There is testimony to the effect that he claimed at that time he was buying timber from Brown, and this is corroborated by the check which appellant claims he gave as the initial payment for the staves, which shows that it was given for the purchase of timber.

[2, 3] The sale was for a grossly inade quate price, and the fact that white oak staves, a commodity readily marketable, were sold for an inadequate price, constitutes

a strong badge of fraud. The transaction (not proved that there was sufficient of the was unusual, in that appellant was not engag- other property, in addition to those staves, ed in the stave business, and knew nothing to pay the indebtedness to appellee. He is about the stave business, or about the price of therefore not in a position to claim that this staves, except what Brown told him, and was an error of the court. what he read out of the price list or catalogue. The evidence shows plainly that appellant bought the staves at a grossly inadequate price, and that it was done with the full knowledge of Brown's intention to defraud appellee. It is beyond question that Brown was insolvent and that he made the sale to defraud appellee. This being true, appellee was entitled to a cancellation of the sale, regardless of its right to assert a specific lien under the contract. The proof is undisputed that appellee furnished the money to have the staves manufactured, and that Brown's contract with appellee called for a sale and delivery of these particular staves. The sale was incomplete, it is true, by reason of the fact that there had been no delivery; but the sale of the staves to another person constituted a breach of the express terms of Brown's contract with appellee, and it but adds to the weight of the fraud perpetrated by Brown in selling the staves to appellant in violation of his contract, and for the purpose of hindering appellee in the collection of its debt.

[4] Appellee was entitled, not only to have the staves subjected to the payment of its debt, but to require appellant to refund the price of the staves which he had resold.

[5, 6] It is earnestly contended by learned counsel for appellant that the chancery court was without jurisdiction to render a decree canceling the conveyance because the property had not been sequestered by an order of attachment. The staves were in the custody of the court, through its receiver, and this constituted a sequestration, if such had been necessary; but where there is personal service, so as to give the court jurisdiction of the person of the defendant, it is not necessary that the property be sequestered and brought within the control of the court in order to give jurisdiction for the rendition of a decree enforcing a lien or canceling a conveyance. This feature of the litigation between appellant and appellee became a suit to set aside a fraudulent conveyance, and it was unnecessary under the statute to first establish the debt in a suit at law against Brown, the debtor. Kirby's Digest, § 3313. The insolvency could be proved in the action in the chancery court to set aside the fraudulent conveyance.

[7] It is also contended that the court should have marshaled the assets of Brown and enforced appellee's claim against the property other than the staves sold to appellant. The answer to that contention is that, in the first place, appellant did not ask for a marshaling of assets, and it was

[8, 9] Finally, it is said that the court erred in undertaking to interfere with the jurisdiction of the Clark chancery court by adjudicating the rights of the parties in the carload of staves involved in that action. Appellant attempted to split up his cause of action against appellee, by bringing one suit in the Clark circuit court (which was later transferred to the chancery court of Clark county) for the carload of staves in that county, and by intervening in the present action. The staves in Clark county were a part of the staves purchased by appellant from Brown, and the question involved in the two actions were precisely the same. Therefore the first adjudication would be conclusive as to the rights of the parties. The chancery court of Montgomery county was correct, therefore, in the present action, in adjudicating the whole rights of the parties with respect to the property in controversy, which included the lot of staves shipped by appellant out of Montgomery county and taken over by appellee in Clark county. There was certainly no prejudicial error in so doing, for, if that had not been done, an adjudication of the questions involved in this case would have been conclusive of the rights of the parties in the other case. Church v. Gallic, 76 Ark. 423, 88 S. W. 979; National Surety Co. v. Coats, 83 Ark, 545, 104 S. W. 219.

There is no error in the proceedings, and the decree of the chancery court was correct under the facts. Affirmed.

PHILLIPS V. PHILLIPS. (No. 308.)

(Supreme Court of Arkansas. April 5, 1920.) 1. Courts 475 (2, 3)-Chancery court has no jurisdiction over executor as to accounting where administration still pending.

The chancery court had no jurisdiction over the executor as far as the matter of accounting and settlement with the probate court is concerned, while the administration of the estate was still pending in the probate court and before there had been a final settlement by probate court of executor's accounts; the probate court having exclusive jurisdiction thereof. 2. Courts 475(2, 3)-Will may be construed by chancery court, though administration is pending in probate court.

The chancery court may construe will and determine the scope of trust created thereby, though the administration of the estate under the will is still pending in the probate court.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(220 S.W.)

3. Wills 683-Spendthrift trust held burden | said homestead above described, I give, deonly on property given to trustee and not on vise, and bequeath to my son, William James entire estate. . Phillips, in fee simple, provided that said homestead shall not be sold, partitioned or divided until my said granddaughter, Hilda Mildred Phillips, shall have reached the age of twentyone (21) years.

Where testatrix gave only small amounts to most of her children, and most of her property, including the business which a son had successfully managed for her, to such son, named son executor and trustee, and directed that he pay her husband a stipulated sum monthly during his lifetime, the property given to such son only, and not the entire estate, was burdened with such spendthrift trust; such being the apparent intention of the testatrix.

"I give, devise and bequeath to my said granddaughter, Hilda Mildred Phillips, my piano.

"All the balance and residue of my estate, both real and personal, wherever situated, I give, devise and bequeath, share and share alike, to William James Phillips, Harry George Phil

Appeal from Pulaski Chancery Court; Jno. lips, Emma Charlotte Hardy Wunderlich, Annie E. Martineau, Chancellor.

Suit by William James Phillips against James Phillips and others. From decree rendered all the parties except named defendant appeals. Reversed and remanded with directions.

Price Shoffner and T. D. Crawford, both of Little Rock, for appellants.

Lewis Rhoton, Gardner K. Oliphint, Reid, Burrow & McDonnell, and Gus Ottenheimer, all of Little Rock, for appellee.

WOOD, J. The will of Sarah M. Phillips, deceased, is as follows:

"I, Sarah M. Phillips, of the city of Little Rock, Pulaski county, state of Arkansas, being of sound mind and disposing memory, do make and declare this to be my last will and testament, hereby revoking any and all other wills by me heretofore made.

"I nominate, constitute and appoint my son, William James Phillips, as executor and trustee of this my will, who shall serve as such without being required to execute bond.

"I direct and instruct that my executor shall first pay all my just debts and funeral expenses. "I further direct and instruct that my said executor shall pay over to my beloved husband, James Phillips, the sum of $50.00 each and every month as long as he shall live.

"To my son, William James Phillips, I give, devise and bequeath all the tools, implements of trade, horses, mules, wagons, vehicles, harness and all other equipment connected in any way with the contracting business of which I die possessed; also all of that part of block thirteen (13), Crawford's addition to the city of Little Rock, Pulaski county, Arkansas, on which is located what is known as the lumber yard' and 'gravel bed,' together with all lumber and

gravel thereon.

"I give, devise and bequeath to my said executor, to be held by him in trust for the sole use and exclusive benefit of my granddaughter, Hilda Mildred Phillips, to be used for her as to him may seem best until she shall have reached the age of twenty-one (21) years, at which time she shall take it in fee simple, an undivided one-third (%) interest in my homestead, described as lots one (1) and two (2), fractional block twenty-four (24), Braddock's Boulevard addition to the city of Little Rock, Pulaski county, Arkansas.

"The remaining two-third (%) interest in my

Rose Gambold and Hilda Mildred Phillips, ex-
cept that my executor shall deduct $50.00 from
the share of said Hilda Mildred Phillips and
pay over to her father, Ernest Charles Phil-
lips, one (1) year from the date of my death,
and provided that the share of my granddaugh-
ter, Hilda Mildred Phillips, shall be held in
trust by my executor for her sole use and ex-
clusive benefit, to be used for her as to him
may seem best until she shall have reached the
age of twenty-one (21) years, at which time
she shall take her said share in fee simple.
"Witness my hand and seal this 29th day of
July, 1912.
Sarah M. Phillips."

This appeal involves the construction of the above will.

James Phillips was the husband of Sarah Phillips. William James Phillips, Harry George Phillips, Emma Charlotte Hardy Wunderlich, and Annie Rose Gambold are the children of Sarah and James Phillips. Hilda Mildred Phillips is a granddaughter and Jimmie Phillips is the wife of Harry George Phillips.

This action was brought by William James Phillips, and in his complaint he designated the other parties, above named, as defendants. After alleging that there was a will, and that the plaintiff was executor, and that the defendants had an interest under the will plaintiff alleged that pursuant to the directions of the will he had paid the debts of the testatrix, and had paid James Phillips $50 per month since the death of the testatrix, had paid the taxes and the necessary expense of keeping the property in repair, all of which he had paid out of his own money, there being no personal property of the estate out of which to pay said debts and claims; that the real estate could not be sold to satisfy same without an unnecessary sacrifice thereof; that since the death of Sarah M. Phillips he had made annual settlements in the probate court, showing receipts and disbursements of funds, and had accounted for the rents which he had collected; that said annual settlements had been approved by the probate court. He set up these settlements and made them exhibits to his complaint, and alleged that since the settlements covering the transactions for the year 1918 he had paid the taxes and probate clerk costs

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

Defendants asked the court to construe the will in this manner.

and expense of an abstract of title for a portion of the lands, and had paid James Phillips, under the terms of the will, for The defendants also asked that a master three months, making a total of $314.82; that be appointed to state an account. In their this amount should be added to the amounts cross-complaints defendants claimed the plaindue the plaintiff under the settlements which | tiff had received, as executor, funds in which, had been approved by the probate court, under the will, they had an interest, and making a total of $5,387.65, which had been which on proper settlement would show that advanced by the plaintiff "in carrying out plaintiff was indebted to them in the sum of the provisions of the will and paying the tax- $325, for which they asked judgment against es and necessary repairs on the property"; him. that this sum was a proper charge against the real estate of the testatrix, and that plaintiff was entitled to 6 per cent. per annum on the amounts he had advanced from year to year from the close of the year in which said advancements were made.

Plaintiff prayed judgment for the amounts, and that a lien be declared on the property of the estate, which he described, and “that the property be sold for the satisfaction of the lien, and that the will be construed to mean that the $50 per month directed to be paid to James Phillips is a charge first against the property other than the homestead, and that the plaintiff be authorized to sell said property to reimburse himself for the amounts paid out by him as set out above, and that the homestead cannot be sold nor partitioned until Hilda Mildred Phillips becomes 21 years of age."

Hilda Mildred Phillips filed a separate answer, in which she set up that she was entitled to one-third of the property referred to in the pleadings and will as the homestead; that this one-third interest was to be administered by the plaintiff, as trustee under the will for her benefit, until she had arrived at the age of 21 years; that the plaintiff had administered the income from her one-third interest in the homestead to her satisfaction until the filing of her answer. She alleged that when she arrived at the age of 21 years, under the terms of the will, she was to have one-third interest fee simple in the homestead without same being subject to any charge in favor of James Phillips. She, therefore, prayed that the will be so construed. On the issues thus raised testimony was adduced, and the court found, among other things, "that the will should be construed to Some of the defendants demurred to the create a trust of all the property belonging complaint on the general ground that the al- to the deceased at the time of her death to legations were not sufficient to state a cause produce a fund of $50 per month, which was of action, and on the special ground that by the will directed to be paid over by the "this court is without jurisdiction to try the executor and trustee to James Phillips in cause." In their answers the defendants monthly sums of $50 as long as the said denied that the plaintiff had the right to pay James Phillips should live." After making the sums paid by him out of his own funds this finding the court proceeded to state an without any order of court authorizing him account between the plaintiff and the estate to do so, and then undertake to make same of Sarah M. Phillips, charging the estate a charge against the interest of the defend- with debts paid, taxes, insurance, necessary ants in the property to which they were en- repairs, and court costs, and also charging titled as legatees under the will of Sarah M. the estate with the amount paid by the plainPhillips. They alleged that if he had proper- tiff, as executor, to James M. Phillips at the ly handled the personal assets of the estate, rate of $50 per month since the death of the sums realized therefrom would have re- Sarah M. Phillips up to and including the duced the amounts which he claimed were month of August, 1919, making a total indue him. They alleged that he had not ac-debtedness of $6,603.16. The court then credcounted for the assets which he had received ited the estate with the amount collected by from the estate; that the expenditures alleged by the plaintiff as the necessary expenses of the administration were wholly unnecessary, were not justified under the will, and could not be made a claim against the defendants; that they were not sufficiently advised to know whether the various claims set up by him were justified and therefore denied that they were just claims. They alleged that

"The $50 per month provided in the will to be paid James Phillips by the plaintiff, William James Phillips, is a charge against the plaintiff personally, to be paid by him personally, in view of the large amount of property willed to him by his mother."

the plaintiff, as executor, as rent from the property belonging to the estate, including the property occupied by the plaintiff as executor and trustee, in a sum aggregating $4,652, leaving the estate indebted to the plaintiff, up to and including the month of August, 1919, in the sum of $2,151.16. In the statement of the account the court refused to allow the plaintiff, “as not being a proper charge against the estate," the sums of $500 attorney's fee in the matter of the contest of the will and the sum of $6.75 for printing briefs in that case, and also refused to allow the sum of $16 and the sum of $8.75 paid for abstracts, making a total of $531.50.

The court then entered a decree in favor

(220 S.W.)