DocketNumber: No. 12,930
Citation Numbers: 68 Neb. 47
Judges: Sedgwick
Filed Date: 3/4/1903
Status: Precedential
Modified Date: 7/20/2022
A statement of the facts in this case may be found in the opinion of the court upon the former appeal, 63 Neb. 234, 56 L. R. A. 121. The reason for reversing the former judgment of the district court is stated in the syllabus: “'An insolvent corporation can not make a preference of a debt due from it on which the officers and directors are bound as sureties.” The opinion closes with the following language: “There is a controversy between the plaintiff and the interveners as to their respective rights in the
The' district court construed this language to mean that the defendant, the Columbia National Bank, should not be allowed any part of the proceeds of the goods then in the hands of the bank, and made findings and entered judgment to that effect, and entered several judgments against the bank in favor of the plaintiff and the intervening creditors, respectively, in the amount of their respective claims, with interest to the time of entering judgment. From this action of the court the defendant, .the Columbia National Bank, has appealed to this court. After the cause was remanded there was no change made, in- the pleadings and no evidence taken, the findings and judgment of the district court being predicated entirely upon the prior findings and judgment of that court and the opinion and mandate of this court. .
It is -insisted that in this case the property of the corporation was in the hands of a fraudulent grantee, and
In Holbrook v. Peters & Miller Co., 8 Wash. 344, 36 Pac. 256, 257, the syllabus is as follows: “(1) An assignment by an insolvent corporation of all its property to one of its creditors for the purpose of satisfying its debt to such creditor is not a conveyance ‘with intent to delay and defraud creditors,’ within the meaning of the attachment law, since preferring one creditor does not necessarily constitute fraud in fact. (2) In such case the remedy of the other creditors is by suit in equity to compel an equal distribution of the corporate assets.” And the court said: “It is not a fraud in fact for a debtor, whether a natural person or a corporation, to prefer a creditor, and it is only because the law regards the assets of an insolvent corporation as a trust fund for all its creditors that it interferes with preferences made by debtors of that class. If the Peters - & Miller Company was an insolvent corporation at the time it transferred its prop
In Foster v. Mullanphy Planing Mill Co., 92 Mo. 79, 4 S. W. 260, 263, an insolvent corporation transferred its assets to a creditor whose claim was also secured by the indorsement of the directors of the debtor corporation. Thereupon other creditors attempted to attach the property on the ground that it had been fraudulently conveyed. In the syllabus the law is declared to be: “The fact that an insolvent corporation makes a deed preferring some creditors, including some of its directors, does not give an unpreferred creditor the right to take out an attachment at- law charging the corporation with attempting to defraud its general creditors.” And the court said: “Much has been said, and very ingeniously said, by counsel for plaintiff that the directors of the company, it being insolvent, were trustees, and that the assets of the corporation were a trust fund, etc. These premises will readily be admitted. But grant them. Grant, further, for arguments sake, that a breach of trust has been committed by these directors in manner as aforesaid. How is such official dereliction to be reached? Is it a constructive fraud, within the meaning of the attachment act? Certainly no case has gone to that length. The corporate assets being a trust fund, the forum for its enforcement is a court of equity.”
These two decisions seem to go upon the ground that the assets of the corporation constituted a trust fund for the benefit of all of its creditors, and to hold that such fund can only be reached by proceedings in equity. It is
In Beach v. Miller, 130 Ill. 162, 22 N. E. 464, 467, it is said in the syllabus: “A sale and delivery by an insolvent corporation of its property to one of its directors in satisfaction of a pre-existing debt, though voidable in equity, does not render the property subject to levy at the suit of the corporation’s creditors.” And in the opinion the court said: “After a careful examination of the authorities, we are inclined to the opinion that, if this corporation was insolvent at the time of the sale, Miller, who was a director, could not lawfully purchase the property in satisfaction of his own debt, to the exclusion of other creditors, but he took' the property charged with the trust in favor of other creditors, which may be enforced in an appropriate action.' Miller, being a creditor, would doubtless be entitled to share with the other creditors in the property, but he could not appropriate the entire amount to the payment of his own debt. This, however, conferred no right upon appellants to seize the property and sell it in satisfaction of the debt of Blatchford & Co., as creditors of the corporation. They occupied no better position than Miller. It may be, and no doubt is, true, that if Blatchford & Co. had levied on the property while in the hands of the corporation, before the sale to Miller, they would, under such circumstances, have been entitled to hold it; but after the sale and delivery to Miller they had no such right. The property had passed beyond the reach of their execution. It had passed into Miller’s hands, charged with a trust which a court of equity might enforce in favor of all the creditors of the corporation, or such as might invoke the aid of that court.”
In Merchants’ Nat. Bank v. McDonald, supra, an insolvent corporation made a bill of sale of all its stock in trade to the bank to secure the payment of notes which were signed by the corporation and also by one McKell, the president and director of the corporation. It does not appear in the opinion that the property was delivered to the bank; on the other hand, it is expressly stated that the indebtedness was in reality the indebtedness of Mc-Kell, and that the corporation was not liable therefor. The bank not being a creditor, the bill of sale was fraudulent and the property subject to attachment. If there are expressions in the opinion inconsistent with the principle here announced, such expressions were not warranted by the facts in the case as disclosed by the record.
It is also urged that “the bank is estopped from presenting its case here on a different theory from that urged upon the first appeal.” But the bank ought not to be refused the portion of the assets to which it is justly entitled, for the sole reason that it demanded more than was found to be due it. Its present claim is included in the former one; it is not inconsistent with it.
We think that the defendant bank is entitled to participate in the distribution of the assets in its hands. The findings and. judgments complained of are therefore reversed, and the cause remanded with instructions to find the respective claims of the parties in accordance with this opinion, and to decree a distribution of the funds accordingly.
Reversed and remanded.