Knoxville Iron Co. v. Wilkins, Post & Co.

Hall, Justice.

This was a bill exhibited under the act of the general assembly of 1880 and 1881, — Code, §3149, (a), (b), (c), (d), (e) and (f) — for the purpose of collecting and appropriating to the use of the creditors the assets and effects of a firm of alleged insolvent traders, who had failed at the maturity of one or more of their debts to pay the same, and had refused so to do upon proper demand made. The bill, among other things, prayed an injunction and the appointment of a receiver. If filed at all in the office of the court to which it is returnable, it was filed on the night previous to the execution by the firm of the assignment containing preferences, which it seems to- have been its purpose to set aside; but this alleged filing occurred previous to the sanction of the bill by the chancellor by which a temporary restraining order was granted and a ieceiver appointed temporarily. On the final hearing of this preliminary sanction, the chancellor revoked it, and refused1 the extraordinary relief prayed, upon this among other grounds: that the filing of the bill, without the sanction of the chancellor ordering the extraordinary remedies sought, was not such a filing, under the law, as would, under the act, defeat an assignment with preferences made subsequent to the alleged filing, but before the conditional sanction ordering an injunction and appointing a receiver temporarily. If this decision is correct, it is not essential to consider the other two questions made by the record, viz., whether, under the peculiar circumstances disclosed, the bill was legally filed in the proper office for any purpose of notice as to the pendency of the suits; and whether the insolvency of the firm of traders was so conclusively established by the fact that it had made the assignment as to preclude further inquiry into the question.

While we are strongly inclined to the opinion that the filing of this bill under, any view of the facts disclosed by the record was not available as notice, which is ordinarily, implied from\a lis pendens, and that the assignment is not affected thereby, yet we hold that, under the peculiar provisions of the act in question, taken in connection with other cognate provisions of the law, it was not the filing contemplated to prevent such preferences by insolvent persons as may be made lawfully. This act has always been subjected to a strict construction, and unless a party brings himself within its very letter, the relief it provides has been invariably denied. If the assignment was otherwise valid, the filing of the bill in the clerk’s office did not, under the circumstances, render it invalid, and upon its execution and delivery, the assignors ceased to be traders; and, as the complainants could get nothing from the preferred creditors under such circumstances, there was no case made for an injunction and receiver, and the judge exercised his discretion properly in refusing either or both of them. 67 Ga., 52; 69 Id., 492.

That this was not the filing contemplated and required by the act, we think is evident from section 3149 (b) of the Code, which provides that the chancellor, under such proceedings as are usual in equity, may grant injunctions and appoint receivers for the collection and preservation of the assets in the cases designated thereby. What were the usual proceedings in equity referred to and made a part of this act at the time of its adoption, in relation to the filing of bills? The 53d section of the judiciary act of 1799 (Cobb’s New Dig , Appendix, 1143) required in terms that all bills in equity should be read and sanctioned by one of the judges, and a copy thereof served on the opposite party at least thirty days before the filing of such bill in court. By the act of December 24,1827, so much of the foregoing provision as required judges to read and sanction bills in equity, other than bills of injunction, ne exeat and quia timet, before filing them in court, was repealed. Cobb’s New Dig., 468. So that, under this legislation, bills praying extraordinary remedies required the sanction of the judge before they could be filed in court, and such is the provision of our Code, §4184, which declares, in plain and unmistakable language, that “ no bill shall require the sanction of the judge before its filing, unless it prays some extraordinary remedy.” If anything further were needed to strengthen this view, it is found in the very act under which this proceeding was taken, Code, §3149 (d), which cuts off all preferences given, upon the appointment of a receiver, and after the filing of the bill, and requires a fro rata distribution of the insolvent’s assets among his creditors, preserving liens existing at the time of the appointment' of receiver and filing of the bill.

Judgment affirmed.