Perkins v. Talmadge & Co. , 1918 Ga. LEXIS 18 ( 1918 )

George, J.

(After stating the foregoing facts.) The first.contention made by the plaintiffs in error is that defendants in error were not entitled to be heard in opposition to the intervention filed by them, and had no interest in the subject-matter of the litigation and funds arising from the sale of the property of the Perkins Lumber Company by the receivers, because they had failed to file their claims with the chairman of the receivers by May 1, 1915, as required by order of the court. This contention must be dismissed with the observation that the order of court requiring all parties to present their claims to the receivers by a day fixed was passed upon the application of the receivers appointed in the very proceeding in which the defendants in error were allowed a decree setting up and declaring the rank of their respective liens. The ex parte order of the court, if it referred to defendants in error at all, certainly did not have the effect to set aside the judgment and decree of the court in favor of the defendants in error, which decree was the foundation of all future proceedings in the case, including the application of the receivers themselves to have all claims against the Perkins Lumber Company, and the properties of the company sold by them, presented to them by a date certain. Did the intervention set forth a cause of action? Plaintiffs in error came into court on May 5, 1916, under the familiar rule in equity that an intervenor takes the case as he finds it. On that date they found a decree of the court establishing and declaring liens in favor of the defendants in error. This decree was rendered more than three years prior to the filing of the intervention, and, both under § 4358 of the . Civil Code and the rule in equity referred to, the intervenors are not entitled to have the decree annulled. They expressly declared that they elected to follow the proceeds of the sale of the property made by the receivers. The relief prayed by them grows out of the decree rendered-before the filing of the intervention, and they-can not be heard to attack the decree on any ground which might properly have been the subject-matter of a plea by the Perkins Lumber Company. ■ They can not with one hand reap the fruits of the decree'and with the other strike down the decree itself. Seaboard Air-Line Railway v. Knickerbocker Trust Co., 125 Ga. 463 (54 S. E. 138); Charleston &c. Railway Co. v. Pope, 122 Ga. 579 (50 S. E. 374). The decree in the original suit of Henry Talmadge & Company against the Perkins Lumber Company and its creditors established the validity of the mortgages respectively held by the defendants in error. These mortgages were more than sufficient in the aggregate to consume the entire purchase-price received for the properties of the Perkins Lumber Company. Intervenors, therefore, could have no standing as judgment creditors; and as stockholders (and such they really were, under their allegations) their claims could not be paid out of the assets of the defunct lumber company ahead of common creditors, — to say. nothing of judgment-lien creditors and mortgage creditors. To this latter class the defendants in error belonged. It is an elementary principle that the capital stock of a corporation is first for creditors, then for stockholders. Even the general creditors of the corporation (and certainly there is no claim made in the intervention that defendants in error are not general creditors) are entitled to be paid before the stockholders can claim any portion of the assets of an insolvent corporation. Schley v. Dixon, 24 Ga. 273 (71 Am. D. 121); Beck v. Henderson, 76 Ga. 360 (4). It follows from the foregoing that the judgment sustaining the general demurrers to the intervention was right, and it is therefore

Affirmed.

All the Justices concur, except Fish, C. J., absent.