12 Blatchf. 341 | U.S. Circuit Court for the District of Connecticut | 1874
The complainant in this suit is the assignee of the Cheshire Barytes Company, in bankruptcy. That company was organized under the laws of the state of New York authorizing the formation of mining corporations. The defendant was one of the trustees of the corporation, and has proved, as creditor, a debt against the corporation, to an amount greater than the whole value of the property of the corporation which has come to the hands of the assignee. Other debts have been proved against the bankrupt, also exceeding in their aggregate the whole value of the said property. The bill herein is filed by the assignee, to exclude the defendant from any participation in the assets of the bankrupt, or, in form, to postpone him, in the distribution of the assets, to all the other creditors, denying to him any dividend until the other creditors are satisfied. The ground upon whiqh this relief is sought is, that the defendant, as an officer of the corporation, failed to comply with the provisions of the statute of New York under which the corporation was organized, in this, that certain annual reports required by that statute to be made and filed, showing the condition of the company and its capital, contained false representations in respect thereto; and that, by the provisions of such statute, the officers, signing such reports knowing them to be false, are made jointly and severally liable for all the debts of the company. It is claimed, thereupon, that the defendant is himself liable for all the debts of the bankrupt, and that it is unjust and inequitable to permit him to share in the property of the bankrupt, and thereby leave the debts due to the other creditors who reside in the state of Connecticut unpaid; and that they, having a just claim against him for payment of their respective debts, ought not to be. put to a suit against him to enforce that payment, and, especially, to go to another state for that purpose, when there is a fund here, on the credit of which (in part, at least,) the debts were contracted, which this court can administer as may be equitable, and which he now seeks, as creditor of the bankrupt, to withdraw.
The claim is a plausible one, and, upon the facts as they appear in the case, it is, in a popular sense, reasonable and just. But I cannot resist the conclusion that this complainant has misconceived his relation to
I do not perceive that the circumstance that the debt due to the creditor is the sam<j debt or measure of liability which the creditor may assert against the defendant under the New York statute, affects the position of this complainant. Clearly, it would be no de-fence to the defendant’s claim to share in the distribution, if the assignee should show that, by outstanding promissory notes held severally by the persons who are creditors of the bankrupt, the defendant owed them more than the .amount of his dividend, and there was danger that they would be driven to another state to collect such notes. Whatever rights the creditors have, whether legal or equitable, the assignee must leave them-to pursue, unless or until they acquire some lien on the fund itself. ' I concur fully with the views of the district judge expressed on the summary application to the bankrupt court, and I deem them of like force in this suit
I express no opinion upon the rights of the creditors, and by no means deny the power»or duty of the court to recognize and give effect to the statute of New York. But I am of the opinion, intimated on the hearing and confirmed by subsequent reflection, that the assignee has no standing in this court, upon the facts here shown. The determination of this cause, however, should in nowise appear in such form as to be any apparent obstacle to the claim of the creditors, nor seem to be an adjudication of their rights.
The decree made “pro forma” in the district court must be reversed, and the bill be dismissed, but, under the circumstances, without costs.