Dobbins v. Walton

37 Ga. 614 | Ga. | 1868

^Walker, J.

The Augusta Insurance and Banking Company being unable to pay its debts, assigned all of its property, real and personal, to trustees who were authorized to dispose of the same “by dividing the entire net fund among the creditors of .said company of every sort and description, with no other preference than is or may be authorized by law.” In directing the order in which the trustees should pay out the funds the Court decided that the holders of the bills of the Bank? by th.e laws of Georgia, have no preference over other credit- or’s liquidated demands.

This ruling was excepted to, and the learned counsel for plaintiff in error relies upon section 1493, par. 3,’Eevised Code, section 1495 and 2494. Sections'1493 and 1495 are placed under article III, entitled, “ Forfeiture of Bank charters and liability to stockholders.” After specifying the grounds for which a forfeiture may be declared, and providing for the appointment of a Eeceiver, the Code, in section 1493, prescribes the duties of the Eeceiver as follows: 1st, to convert the property into money; 2d, to pay the creditors pro rata, semi-annually; 3d, “ to pay the holders of the bills before other creditors, if they give notice of their claims within six months4th, to give notice to said bill-holders and other creditors, by a three months publication; 5th, to make annual returns of receipts and disbursements; 6th, to distribute the assets, after paying all the debts, among the stockholders. This entire section is prescribing the duties of a Eeceiver appointed by the Court after the rendition of a judgment forfeiting the charter, and does not apply to a voluntary assignment for the payment of all the debts of the Bank. Section 1494 provides for the Eeceiver’s compensation. Then comes section 1495, chiefly relied upon by counsel for plaintiff in error. This section provides that, “ if the Bank is insolvent, the order of paying off the debts shall be the same as is prescribed in cases of administration, to the extent applicable, 'except where special preference or postponement is given by law.” “If the Bank is insolvent.’ What Bank is here referred to ? Most clearly such as the preceding sections had been speaking of, namely a Bank whose charter had been forfeited and its assets placed in the hands of the officer of the Court. This construction is strengthened by referring to the three sections immediately following this one; they are all- in relation to matters connected with such a Bank. Not one word is said about an “ assignment by Banks,” until section 1499 is reached, and this provides upon the surrender of the charter, for an assignment “ as natural persons may, but it cannot thereby prevent such preference among its creditors as the law gives. Taking all the sections together, we think that the provisions of 1495, and part 3 of 1493, apply to Banks alone whose charters may have been forfeited and their assets placed in the hands of Receivers. Such Banks may very properly be recognized as deceased, and their assets paid out in the order prescribed in cases of administration. But this case is different. Here is no forfeiture and no surrender of the charter. This is a voluntary assignment by the Bank of all its assets to be divided “among the creditors of said company of eveiy sort and description, with no other preference than is or may be authorized by law.” The assignment gives no preference to any of the creditors. We have shown that the preference claimed by plaintiff in error as conferred by law is inapplicable to the facts of this case. It was not insisted that there was any other provision of the law giving any preference, and we know of none such. The rights of the respective creditors must be decided'by the terms of the deed of assignment, and that is for the creditors of said company of every sort and description. The only error we see in this case was in excluding the open accounts from a participation in the general fund; but this ruling is not excepted to, and it was in favor of the party complaining here. As we hold that all the creditors of the company were entitled to share in the distribution, it is unnecessary to determine whether the claims of McGallie & Jones and others were liquidated demands or not.

2. Another question made in-this record is, whether “The Georgia Railroad and Banking Company, by assenting to the assignment, lost its lien on the forty-four shares of stock owned by the Augusta Insurance and Banking Company ?” It could not be denied that the Georgia Railroad Bank, by law," was entitled to a lien on this* stock for the debts due by the owner of it, the Augusta Insurance and Banking Company. Prin. Dig., 358. Pamph. Acts, 1840, p. 25. Acts, 1843, p. 20. This is admitted, but it is insisted that the Georgia Railroad Bank assented to the transfer of the stock to the assignees, and thereby lost its lien; and authorities are cited showing that when a party voluntarily parts with the possession of the property upon which the lien has attached, he is divested of his lien. "We have no fault to find with this as a general proposition ; the question is, as to its application to the facts of this case. Here was a general assignment for the benefit of all the creditors, “ with no other preference than is, or may be, authorized by law.” To this the Georgia Railroad Bank assented. One of the preferences authorized by law, was a lien on the stock, for the amount due by the assignor. The error into which the counsel fell, was in considering this assignment as a sale to a bona fide purchaser, without notice. The assignee of a voluntary assignment, for the benefit of creditors, stands in no better a situation than the assignor. Neither he, nor the .creditors whom he represents, are purchasers for a valuable consideration, without notice, as against prior equitable liens. Haggerty vs. Palmer, 6 J. C. R., 437. Knowles vs. Lord, 4 Wharton, 500. 2 Kent’s Com. 532, (note c.)

There was no parting with the possession of this stock, in the eye of the law. All the Georgia Railroad Bank did, was to assent to the transfer from the name of the Bank to that of its assignees, for the payment of its debts •, the deed of assignment recognising such preferences as were allowed by law. Most clearly this was no such sale as would defeat the lien of the Georgia Railroad Bank, and the Court did right so to hold.

There was no error in permitting other creditors to come in and be made parties to the proceedings to distribute the funds in Court. In the case of the Macon and Western Railroad Company vs. Parker, 9 Geo. R., 378, this Court holds that “ any creditor who has a claim upon the fund, but who is not a nominal party to the suit, may make himself a party thereto in fact, by coming in and presenting his claim under the decree, and submitting himself to the jurisdiction of the Court, for its settlement and adjustment, upon the fund to be distributed.” This point was not seriously urged, though it was made in the bill of exceptions. Upon the whole case, we see no error in the Court below.

Judgment affirmed.