Gresham v. Crossland

Bleckley, Judge.

1. On a bill filed by the general assignee of an insolvent bank, against all the creditors and stockholders, the object. *278of which is to obtain direction in executing the terms of the assignment and to compel the defendants to come into the complainant’s suit, under the bill, and there litigate and settle their respective rights and claims, and to distribute the entire assets of the bank when collected, an injunction ad interim will not be granted to restrain the defendants from instituting suits against the complainant, it not appearing that the ci’editors have accepted the assignment, or that they intend to claim under it and not against it, and there being, also, a good legal reason why the creditors, whether they accept or reject, should be left free to sue the bank, and to join in their suit the assignee as a party defendant, if they should think proper to do so. That the creditors have not yet reduced their demands to judgment, and that they have for security, by the terms of the bank’s charter, the perso:ial liability of the stockholders, enforceable under sections 3371, 3372 of the Code, is reason sufficient in the present case. As the remedy given by these sections is to plaintiffs or complainants, the creditors should not, without fault on their part, be restrained from taking the character of plaintiffs or complainants, and be obliged to fill that of defendants only. Moreover, should they wish to attack the assignment for fraud or illegality, it is plain that they should be allowed to do so. There is no reason why they should not be free to commence proceedings of their own choosing for that purpose, if for no other. And success in such proceedings would put an end to the assignee’s interest in the whole matter, and strip him of the assets. Were he as strong as an administrator (but he is much weaker), he would not necessarily be entitled to the injunction for which he applies, as against creditors, whose claims are not in judgment. 1 Story’s Eq., § 544. The assignee was created on the 12th of May, and on the 16th, aetatis four days, he sends forth his challenge, he denies to his adversaries any right in the selection of weapons, or any voice on the time or place of the meeting. He warns them to appear in the forum of his own choice on a certain day, there to plead, answer or de*279nmr, and take the consequences. In the meantime, he wants peace to reign. He wants no gage of battle thrown down to him elsewhere. He wants all disputes to abide the abitrament of one general engagement, brought on by himself and fought upon ground which he has selected. With the court below, we think he cannot rightfully aspite to such a commanding position. The injunction was properly refused. Further than this we have no concern, at present, with his bill.

2. Passing now to the bill filed by the creditors, one object of which is to break up the assignment, and have the assets placed in the hands of a receiver, we think the court erred in interfering summarily with the assignee’s possession and management. Nothing is alleged against the integrity, the solvency, or the intelligence of the assignee. A case of real danger to the assets in his hands is not made; nor is it shown that the stockholders are wanting in solvency to an extent which renders their personal liability, under the bank’s charter, a doubtful security to the complainants.

As the stockholders are bound for the corporate debts, they, if fully able to respond to creditors, are deeply interested in preserving the assets, in having them speedily collected and properly applied, and in making them go as far as possible towards discharging all the liabilities of the bank. The stockholders stand behind the corporation, and must make good all deficiencies — the amount of their stock being greatly in excess of the corporate indebtedness. They, it seems, are content to let the assignee hold the position in which the assignment placed him. They ratified his appointment. He has their confidence, and if he misbehaves, they must respond on their charter liability. We see no good reason to doubt that the assignee will be faithful, and should he be unfaithful, it does not appear that he would be unable to make satisfaction for his delinquencies, and were he to prove unable, the creditors would still have the stockholders between them and ultimate loss. Here, then, is almost a certainty that creditors will get their rights. *280They, by this bill, have commenced the prosecution of their remedies, which reach, or may be made to reach, all property, corporate or private, to which they can resort for payment. And this result will equally follow, whether the assignment be upheld or set aside. If, in the progress of the litigation, a receiver should become necessary, one can be appointed. But to appoint one now, is equivalent to defeating the assignment before any decree has been pronounced against it, and before danger to the fund has become apparent. Taking the bill,' the answer, and the affidavits, all together, and looking at the whole case, the element of danger is wanting, and in the absence of that element, the assignee should not have been superseded in his functions by the appointment of a receiver. That the bank could make the' assignment, see 37 Ga., 611; and that the action of directors de facto, especially after ratification, is sufficient, see 56 Ib., 251.

Counsel for the bank and for the assignee cited : Code, §1493 et seq.; Code of 1861, §1954; Acts of 1865-6, p. 29; 37 Ga., 612; Code, §1952. 37 Ga., 611, 614; 56 Ib., 155; 4 Mason, 206; 91 U. S. R., 496; Acts of 1874, p. 242, §§1 and 3; 1 Saxton’s Eq. Rep., 542; 11 Mass., 288; 5 New York, 320; 2 Metcalf, 163; Ang. & Ames Cor., §287; 56 Ga., 257; 1 Sax. Eq. Rep., 556; 41 Ga., 454, 463; 36 Ib., 517, 518; 38 Ib., 514, 518; 19 Ib., 490; 16 Wall., 501; Code, §§3098, 3149, 1486, 1688, 1494.

Counsel for creditors cited: 1 Red. Rail. Ca., 187-9; Brice’s Ultra Vires, 148, 152, notes, 248, 258; Cent. Law Jour., Dec. 3, 1875, p. 785; Ib., Oct. 15, 1875, p. 670; 1 Otto, 45, 56, 58, 65; Her. on Estop., §§572 573, 575, 578, 580; Big. on Estop., 503; 37 Ga., 611; Code, §§1485 to 1490; 37 Ga., 619; 19 Wall., 1; 1 Hill, 302; 1 Strange, 165; 2 Lansing, 81; 2 U. S. Dig., (New Series,) 100; 1 Paige Ch. R., 82, 515; 2 Story’s Eq., §§827, 831, 839, 841; Burr. on Assign., 623; Code, §274.

*281Judgment in the former case affirmed, and in the latter, reversed.