Miners' & Citizens' Bank v. Maxine Mining Co.

235 S.W. 51, 150 Ark. 653, 1921 Ark. LEXIS 421

• Court: Supreme Court of Arkansas
• Decided: December 5, 1921
• Status: Published

Opinion

Hart, J.

(after stating the facts). The decree of the chancellor was correct. Sections 1798-1801 of Crawford & Moses’ Digest nrovide for the procedure for the winding ut> of the affairs of insolvent corporations and the distribution of their 'assets to their creditors.

Sec. 1798 provides that no preference shall be allowed among the creditors of insolvent corporations except for wages and salaries of laborers and employees

Sec. 1799 provides that any creditor of such insolvent corporation may institute proceedings in the chancery court for the winding up of its affairs and the distribution of its assets among the creditors after paying the wages and salaries due- laborers and employees.

Sec. 1800 provides that every preference obtained or sought to be obtained by any creditor of such corporation, whether by attachment, confession of judgment or otherwise, shall be set aside by the chancery court, and such creditor shall be required to relinquish his preference and accept his pro rata share in the distribution of the assets -of such corporation, provided that no such preference shall be set aside unless complaint thereof be made within ninety days after the same is given or sought to be obtained.

The attachment in favor of appellant was issued and levied on the 20th day of September, 1917. The laborers and employees of the company filed their claims with the receiver within three months thereafter, and asked that the preference by attachment obtained by appellant be set aside.

The receiver allowed the claims of the laborers and employees of the company and classed them as preferred claims. He made his report thereof on the 6th day of Decembér, 1917. This all occurred within three months after the preference by attachment was obtained by the appellant.

Hence the chancery court correctly held that the preference sought to be obtained by appellant by the issue and levy of the attachment should be set aside.

A decree was entered accordingly, and it follows that the decree must be affirmed.