Alexander & Co. v. Mercantile Trust & Deposit Co.

100 Ga. 537 | Ga. | 1897

Lead Opinion

Simmons, Chief Justice.

The original petition in this case was an equitable one, and shows clearly that it was brought under section 3149(d) et seq. of the Code of 1882. Civil Code, §2719 et seq. The original plaintiffs had no equitable rights except those given under .these sections of ithe code. Without these code sections they would have had to reduce their claim judgment and have the entry of nulla bona thereon, before they could have resorted to equity. These sections give them a right to resort to the equity side of the court without judgment or lien, by showing that the corporation owes them ■debts which it failed to pay at maturity, that they demanded payment thereof and ilt was refused, and that the corporation •is insolvent. All these allegations were made in the original petition, and the court took jurisdiction and appointed a receiver under the petition thus filed. The petition being brought under the code, the distribution of the assets of the* insolvent corporation must be governed by the terms of the-code. Section 3149 (d) provides in substance that no creditor shall acquire any preference, by any judgment or lien, on any suit or attachment, after the filing of the bill, and all assignments and mortgages to pay or secure existing debts,, made after the filing of the bill, shall be vacated, and the assets be divided pro rata among the creditors, preserving all existing liens. Thus it will be seen that no creditor Avithout' a lien at the filing of the petition can obtain one after it is filed in preference to any other creditor, but a creditor Avhohas a valid lien when the petition is filed is not interfered with. His lien is not displaced but preserved. He occupies the same place, as far as the lien is concerned, as if no petition had been filed and no receiver appointed. The priority and dignity of Ms lien stand upon the same plane they occupied before the commencement of the proceedings. Whatever may be the effect of a comparatively recent equitable-doctrine announced by the Federal and some of the State courts in regard to certain preferential claims of certain creditors in 'the distribution of the assets of insolvent railroad companies, under creditors’ bills filed in those courts, we are clear that in a proceeding commenced under the above sections of our code, no such preferential claims can exist. These preferential claims are not such liens as those mentioned in the above cited section. That section means legal liens, liens accrued by contract or by judgment of the court or those arising under a special statute. The defendant in error in this case before the filing of this bill had a valid, subsisting, mortgage lien on the property of the railroad company. That lien, we have seen, must under the code be preserved. It cannot be displaced by creditors Avho have-no legal lien but who> rely solely upon wlmt they call a preferential equity.

These are the Adevre announced by this court in the case of Central Trust Co. v. Thurman, 94. Ga. 735. In the arguiuent of the present case, permission was given to counsel to review that case, and upon consideration thereof it is-affirmed by four of the Justices of the present court.

Judgment affirmed,.

All concurring, except Fish, J.,. disqualified.

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Concurrence Opinion

Atkinson, Justice

concurring specially.

Where the holder of a contract lien upon the -property of ‘an insolvent chartered railroad company seeks, through the aid of a court of equity, to have such lien set up and established, invoking in his behalf the full exercise of its-chancery powers, he thereby, relatively to all persons who-may be equitably interested, submits himself to do complete equity; and if there be charges upon the property in favor of other persons which have not in strict law a lien, but which are superior in equity to' the- claim or demand represented in the contract lien sought to be enforced, tbe court,, in adjusting the rights- of the respective parties, has the inherent power to decree a preference in favor of the former, even though the effect of such preference be to- postpone the-payment of the sum secured by the contract lien -to the satisfaction of the equitable charge; and this is true whether-the holder of the contract lien appeared in the proceeding as an original plaintiff, or was subsequently -admitted as-such by intervention, and it is likewise true whether the-proceeding be instituted under section 2716 et seq. of the-Civil Code, or under the general law authorizing the filing-of petitions in equity.

In so far as the doctrine of the ease cited as controlling-in -the present case contravenes -the principle above announced, it is, in my -opinion, unsound, and being under-review, should ibe overruled, and to that extent I dissent' from the judgment of the court; but inasmuch as a majority of the court are of the opinion that the decision in the case-cited should stand as law, I concur in the opinion that it is-controlling upon the questions made in the present case,.. .■and am, therefore, constrained to concur in the judgment ■of affirmance.