Appeal from civil district court, parish of Orleans; George H. Théard, Judge.

In the matter of the Browne & Jenkins Company, Limited, for liquidation. From an order entered on the accounting by the liquidators, they appeal. Affirmed.

Hugh C. Cage, for appellants. Benjamin Rice Forman, for appellees heirs of C. W. Sterry. Florance & Rosen, for appellee Lewis Voight & Sons Co. Dufour & Dufour, for appellee National Wall Paper Co. F. Rivers Richardson, for appellee administrator J. Y. Gilmore.

Statement of the Case.

NICHOLLS, C. J. On the 21st of June, 1897, A. H. Browne, Jacob M. Jenkins, and Douglas Jenkins presented a petition to the civil district court for the parish of Orleans, in which they alleged that on the 19th of that month, at a general meeting of the stockholders of the Browne & Jenkins Company, Limited, a corporation organized under the laws of Louisiana, the said corporation was dissolved, and its affairs placed in liquidation, and that they, the petitioners, were elected commissioners to liquidate the same, under the provisions of its charter and according to law; that they were willing to accept said position and to furnish such bond as the court might deem necessary; that it was proper and necessary, under the facts, that the court should confirm and ratify the proceedings then had, and the appointment of petitioners as liquidating commissioners, that they be made officers of the court, and that it should take charge of the liquidation and assets of the corporation, and that the liquidation should proceed under the orders of the court, that to that end an inventory be taken; that, so far as advised, the corporation was solvent; but that it owed debts of different rank and character, and it would be necessary to marshal the assets and determine the relative rank and rights of the creditors in due course of law, and under proceedings usual in cases of involved or insolvent concerns. They prayed accordingly. The district court acted upon this petition. It homologated and ratified the proceedings of the meeting of stockholders and the appointment of petitioners as liquidating commissioners of the corporation. It ordered that, upon their taking the oath and furnishing bond in the sum of $6,000, letters issue to them as liquidating commissioners; that they proceed to liquidate and settle the business affairs of said corporation under the orders, direction, and control of the court. It directed that the assets of the corporation be taken possession of by the court; that an inventory be made and that the notary taking the same furnish a list of the debts and liabilities of the corporation, as far as he could ascertain the same. On the 27th of June, an inventory of the property of the cor

poration was made by E. L. Simonds, notary, showing assets to the amount of $1,770.37. The three persons appointed liquidators qualified, and letters as such issued to them on the 22d of June, 1897, but on June 28th, the court accepted the resignations of A. H. Browne and Douglas Jenkins, upon their suggestion that the affairs of the corporation could in their opinion be properly liquidated by the other commissioner, Jacob M. Jenkins, and that their services were unnecessary. The district judge, in his reasons for judgment, gives the following detailed account of subsequent occurrences: "Thereupon began what was intended as a liquidation, but what was merely a continuance of the affairs of the admittedly insolvent corporation, as though no liquidation proceedings had been initiated, and as though the corporation was a going concern in a perfectly solvent condition. The only effect of the court's order for a liquidation seems to have been to prevent the creditors from bringing suit. So far from proceeding to dispose of and marshal the assets with a view to an equal distribution among all the creditors, the liquidating commissioner, without applying for or obtaining the necessary authority from the court, went on with the business uninterruptedly, soliciting and filling contracts, making purchases of goods, and employing labor, disbursing and collecting money, and otherwise carrying on the business of the corporation as though no legal proceedings were pending, and as though the court and the creditors had no concern in what he was doing. Among other acts of the liquidating commissioner was the employment of his brother, Douglas Jenkins, who had just resigned as one of the commissioners, as bookkeeper at a monthly salary, at the same time that he himself was drawing a monthly compensation as liquidator. In the meantime not a cent was being applied to the extinguishment of the debts due by the corporation prior to the liquidation. The liquidator, apparently ignorant of his duty to the court, failed to seek advice from his counsel, and acted throughout upon the assumption that he knew all about the law and had no one to consult. This state of things continued until February 28, 1899, when one of the creditors, the National Wall Paper Company, averring that the liquidator had been administering the property of the defunct corporation for nearly two years, and had in course of administration collected moneys which should be accounted for and distributed, ruled him to show cause why he should not file an account and tableau of distribution. This proceeding was followed on April 11, 1899, by a rule taken on the liquidator by another creditor, the Lewis Voight & Sons Company, to show cause why all the property of the Browne & Jenkins Company, Limited, which had been under administration for nearly two years, and which had not been converted into cash, should not be

sold at once by the liquidator according to law. Upon the trial of this latter rule it was ordered by the court that an inventory of all the property now in the hands of the liquidator be taken by a notary, assisted by appraisers, and that said property be sold at public auction by a designated auctioneer, for cash, after 10 days' advertisement, and according to law. As ordered, an inventory was taken on May 16, 1899, which showed assets in the liquidator's hands aggregating in value $3,855.86. The auction sale of these assets realized only $301.45 gross. It was not until November 3, 1899, and not until he had been threatened with punishment for contempt of court, that the liquidator did file an account of his administration. That account, to which opposition has been made, is hardly worthy of consideration. After setting forth, as mere memorandum, the amount of the inventory taken on June 24, 1897, $1,770.37, and the amount of the inventory taken on May 16, 1899, before the sale, $3,855.86, the liquidator proposes to account only for the proceeds of sale, amounting gross to $301.45, and for cash in the hands of his attorney for costs, etc., $375.00, or, say, a total of $676.45, out of which must be deducted sundry privileged claims, which are not contested, and aggregate $262.56, leaving a balance of $413.89 for distribution among the ordinary creditors. The account was supplemented on April 16, 1900, during the trial of the oppositions, by what purports to be a 'detailed statement of the business of Browne & Jenkins Company, Limited, in liquidation, from the date of the appointment of receiver to final sale,' which statement was filed in answer to opponent's repeated calls for the liquidator's books, and to avoid punishment for contempt for refusing to respond to the calls. The statement was accompanied by such books as had been used by the liquidator. According to the first part of it the liquidator collected $16,770.61 and disbursed $16,395.61, showing an excess of receipts over expenditures of $375, which, added to the $301.45 gross proceeds of sale of the stock, foots up the $676.45 for distribution. But an examination of the latter part of the statement discloses that there was an apparent profit in 1897 of $1,429.14, as against a loss in 1898 of $541.79, and a further loss in 1899 of $452.62, or, say, a profit during the liquidator's entire administration of $434.73, instead of $375, as stated. And when called upon to specify the items of daily receipts and disbursements, and when asked to point out in the books the entries from which the statement was prepared, neither the liquidator nor his bookkeeper could do so. The accounts and statements supplementary thereto are entirely inadequate, save as to certain items hereafter to be referred to, to assist the court in fixing the liquidator's liability under his trust. That liability, it seems to me, must be measured as follows: The first inven

The

tory placed only a nominal value upon the stock; its real value, as shown by the second inventory, was $3,855.86. It was error on the liquidator's part to allow this stock to be sold at auction under order of court for less than two-thirds of its appraisement. The sale, ordered in due course of liquidation of an insolvent concern, was judicial, and subject to all the formalities prescribed by law for that character of sale. Vide Act 159 of 1898, which assimilates receivers and liquidators to syndics; also, Rev. St. 688; Code Prac. art. 680; Mayfield v. Comeaw, 7 Mart. (N. S.) 180; Rivas v. Hunstock, 2 Rob. 187, 201; Civ. Code, art. 2184. If the liquidator thought the appraisement too high, he should have asked for a reappraisement; or if the bids at the sale did not reach two-thirds of the appraisement, it was his duty to cause the property to be readvertised and resold. Having allowed the stock to be sold for less than the amount prescribed by law, he is responsible for that amount, or, say, twothirds of $3,855.86,-$2,570.57,-instead of $301.45, as appearing on the account. liquidator is also responsible for the amounts paid to himself, to his brother, Douglas Jenkins, as bookkeeper, and to A. H. Browne as clerk,-being, respectively, $1,344.45, $1,201.10, and $49.25; or, say, a total of $2,594.80. Aside from the fact that there was no authority asked for for the continuation of the business, or for the employment of the clerks,-an authority which would hardly have been granted, in view of the avowed insolvency of the dissolved corporation and the insufficiency of its assets for the payment of its debts,-it is not permissible that the same two persons who had resigned the trust of liquidators upon the representation that the liquidation could properly be conducted by a single liquidator should at once secure employment as clerks to assist in the liquidation, thus leaving to the one liquidator the entire commission presumably deemed too small for three, and burdening the liquidation with clerks' salaries. Besides, the clerical services of at least one of them, Douglas Jenkins, appears to have been of little, if any, value, his knowledge of bookkeeping being so limited that he could not even explain the books kept by him. The liquidator can claim no other compensation for himself than the commission allowed by law of 5 per cent. on the amount to be distributed. Therefore I am of the opinion that the liquidator must be held to have for distribution the following amounts: Two-thirds of $3,855.56, the appraised value of the stock illegally sold, $2,570.57; amount unduly paid to himself for labor, $1,344.45; amount unduly paid to Douglas Jenkins for labor, $1,201.10; amount unduly paid to A. H. Browne for labor, $49.25; cash in the hands of H. C. Cage, attorney, for costs, etc.. $375,-total assets, $5,540.37. From this must be deducted (1) the privileged claims placed upon the account, and not

contested, amounting to $262.56; (2) the liquidator's commission, 5 per cent. on $5,540.37, $277.01; (3) the claim of C. W. Sterry for rent from January 1, 1899, to June 1, 1899, that being the time at which the leased premises were vacated, five months, at $45, -$225,-less credit of $6, or, say, $219; with interest at 5 per cent. on $39 from February 1, 1899, and like interest on installments of $45 from the 1st of each succeeding month, and 10 per cent. attorneys' fees. Out of the balance, after payment of these privileged claims, there must be paid the following ordinary claims, which have been either proved or admitted: Lewis Voight & Sons Company, $951.05; National Wall Paper Company, $2,090.38; J. Y. Gilmore, $51,-with legal interest from February 8, 1898. claims of the other ordinary creditors have not been proved, and must be stricken from the account. It is therefore ordered, adjudged, and decreed that the account filed herein by J. M. Jenkins, liquidating com missioner, on November 3, 1899, be recast and amended as herein above stated, and that, as amended, be approved and homologated, and the funds distributed accordingly."

Opinion.

The

The evidence shows that on January 23, 1895, Jacob M. Jenkins, Douglas Jenkins, and A. Browne, having in view the carrying on the business of paper hangers and sellers of wall paper, went before a notary public in the city of New Orleans and caused to be drawn up the charter of a limited corporation, of which they declared themselves to be stockholders. The amount of the capital of the concern was entirely below that required by law for the creation and existence of such a corporation; none the less, business was commenced and carried on for a long time in its name and as a corporation. Finding that the business was a failure, the parties met together, declared the "corporation" "dissolved" and placed "in liquidation" for settlement. They appointed themselves liquidators, and were subsequently, on their petition, recognized and confirmed as judicial liquidators by order of court. Two of these parties (A. H. Browne and Douglas Jenkins) immediately resigned as such, and Browne appeared no longer thereafter in connection with its affairs. How much property belonged in point of fact at the time of this dissolution to the concern does not appear, for the inventory taken at that time was evidently unreliable. Instead of disposing of the property, collecting the outstanding debts due to it, and paying the creditors, Jacob M. Jenkins, the remaining liquidator, ignoring the fact that the "corporation" had "resolved" itself out of existence and gone into liquidation, and ignoring the orders of court, in respect to that matter, carried forward the business precisely as it had always been, with the difference that Browne had

disconnected himself from the concern, and Douglas Jenkins, though continuing his connection with it, had withdrawn his name, and matters thereafter were conducted in the name of "Browne & Jenkins Co., Limited, in Liquidation." Purchases were made and debts created by Jenkins, liquidator, private sales effected by him, also contracts entered into and executed and moneys received, paid out to third parties, and drawn out by the two Jenkinses, without consultation with, or orders or permission from, any one. During the continuance of this condition of affairs $16.000 or more went into the hands of the liquidator. How much of this business was based upon the old stock of goods, and how much upon new purchases of new stock, do not appear. When certain parties claiming to be creditors finally brought matters to an end, it appeared from a new inventory that there was then in hand $3,855.56 worth of stock. This stock was sold at auction for the price of $301.45. The liquidator, being ruled into court for an account, presented as such that which is referred to by the district judge in his reasons for judgment. Oppositions to this account were filed. On the trial of these oppositions the fact was developed through testimony adduced therein of the continuance of the business, as has been stated, and the receipt of the large amount mentioned was shown without any attempt to explain how this money was expended. It was made to appear, however, that Jacob M. Jenkins had drawn $1,344.45, and Douglas Jenkins had drawn $1.201.10, from this fund. The district court, with the light which it had before it, rendered the judgment which has been appealed from. Appellant claims that he has been harshly and unjustly treated; that he has acted throughout in good faith and in the interest of creditors; that, had he sold the stock on hand at the time of going into liquidation at public sale, it would have brought practically nothing; that the only way to give value to it was to sell it at private sale, and to dispose of it through contracts made to hang it up; and this was done; that from that standpoint the services of his brother and himself became necessary; that those services were rendered, and were paid for at rates for which like services of third parties would have justly and legally called. We would have been glad to have found good faith in these transactions, but we have not been able to do so. This whole business, from beginning to end, has been wrong. There was really no corporation formed. The business carried on under that name was in reality the business of Browne & Jenkins, not of Browne & Jenkins Company, Limited. The debts created in that name were debts due by them. It is no hardship and no injustice that J. M. Jenkins should be held personally to pay for those debts. That is what practically

the judgment appealed from amounts to. If the judgment has been rendered against him for a sum in excess of debts, the parties will not be injured thereby. We are of the opinion that the judgment appealed from was really for an amount smaller than the court would have been warranted in rendering under the evidence. It is shown beyond question that over $16,000 went into the hands of the liquidator while in office, and he made no showing of his disbursements which would bring his indebtedness below that at which the court fixed it. If there be in fact and law an indebtedness to that amount and over, the ascertainment of the particular elements which go to make up the same becomes a matter of no moment. If there be any mistakes in that matter it is the fault of the appellant. Granting that he was entitled to have credit for the disbursements which he made, he did not place the district court in position to ascertain what they were. He complains to this court of the action below, but we are in no better position as to details than that court. Were we to reverse the judgment, we would have to substitute in place of it a judgment to be rendered by ourselves. This we could not do, with the data furnished us. We have not been asked to remand, and, had such prayer been made, we would not have been justified in granting it. Appellant, though knowing precisely what he was called upon to prove, failed to make any proper showing.

For the reasons assigned, the judgment appealed from is hereby affirmed.

(106 La.)

STATE v. SIMS et al. (No. 14,065.) (Supreme Court of Louisiana. Dec. 16, 1901.) CRIMINAL LAW-CONFESSION-ADMISSIBILITY -ACCUSED AS WITNESS-JOINT TRIAL.

1. A confession in which one of the defendants owned that he had sold the property, and said that he had disposed of it under the direction of his codefendant, is admissible in so far as he is concerned, and not against his codefendant, as to whom the jury was instructed that it should not have any effect. Confessions are to have effect only against the parties making them. State v. Havelin, 6 La. Ann. 167; State v. Monie, 26 La. Ann. 513; State v. Harris, 27 La. Ann. 573; State v. Johnson, 17 South. 789, 47 La. Ann. 1230.

2. A defendant may testify in his own behalf, although he may try to cast the guilt upon his associates. It may bear upon his credibility, but does not present grounds to exclude his testimony. Underh. Cr. Ev. p. 77. The "testimony is admissible for or against the other under instructions from the trial judge to the jury to restrict such testimony." State v. Adams, 3 South. 733, 40 La. Ann. 213; State v. Wright, 6 South. 135, 41 La. Ann. 600.

3. The defendants were indicted jointly, and no objection was made to a joint trial.

4. The court is intrusted with some discretion to permit the prosecution or the defense to bring in additional testimony, after the close of the evidence and before the argument has be

gun. State v. Woods, 31 La. Ann. 267; State v. Hebert, 1 South. 872, 39 La. Ann. 319. (Syllabus by the Court.)

Appeal from judicial district court, parish of Jackson; R. B. Dawkins, Special Judge. Gus Mays was convicted of larceny, and appeals. Affirmed.

F. W. Price (Charles B. Roberts, of counsel), for appellant. Walter Guion, Atty. Gen., and A. B. Hundley, Dist. Atty. (Lewis Guion, of counsel), for the State.

BREAUX, J. From a verdict and sentence condemning him to hard labor for 12 months, one of the defendants, Gus Mays, appeals. He and Jake Sims were charged with having stolen a bale of cotton. They were both indicted and stood their trial together. A mistrial was entered as to Jake Sims, and Mays was condemned as before mentioned.

The first contention pressed upon our attention by counsel for Mays is based upon the facts narrated in his bill of exceptions to the court's ruling in admitting the confession of Jake Sims in evidence. Mays' counsel contends that the testimony was inadmissible; that the confessions of an accused after the alleged crime are not admissible against a person jointly indicted for the same crime. To the declaration of Sims, made during the asserted confession, that "Gus Mays hired him to haul the cotton and sell it," defendant Mays particularly objected as being inadmissible. The court overruled the objection, and permitted the confession of the defendant Sims to be introduced, stating that at the time the introduction of the testimony was objected to he (the judge) stated to the jury that the confession could only affect Sims, by whom it had been made, and that he reiterated this statement to the jury immediately after he had ruled upon the objection raised by defendant. We note that no severance was asked for by either of the defendants.

In all the decisions in which the question before us has been discussed by this court, it has been held that the confession was admissible as against the defendant by whom it had been made, and the jury was instructed to limit the application of the admission to the defendant by whom it had been made. In the first decision we have had occasion to consult the court said that the admission was not evidence against the defendant by whom it had not been made, but against the one by whom it had been made; and it follows from the narrative of the bill of exceptions, although not expressly stated, that the court received it against the latter alone. State v. Havelin, 6 La. Ann. 167. In a case of more recent date the error in receiving the admission was committed in not having instructed the jury to limit the application to the defendant by whom it had been made. State v. Monie, 26 La. Ann. 513. State v. Harris, 27 La. Ann. 573.

See, also, Similar ob