106 Ala. 492 | Ala. | 1894
— On the 14th day of March, 1894, complainants, as creditors of the Etowah Mining Company, filed their bill in the chancery court against the Etowah Mining Company, a corporation, W. M. Nixon, trustee, and M. L. Robinson ; and at the same time upon petition the register appointed a receiver without notice. The respondents appealed to the chancellor 'from the order of the register appointing a receiver. The present appeal was taken from the ruling of the chancellor confirming the appointment of the receiver by the register. The appellees contend that the jurisdiction of the chancellor on appeal from the register was only appellate, and that it was not permissible for the appellant to introduce any evidence other than that upon which the register acted. This contention was demonstrated to be unsound and not tenable in the case of Heard v. Murray, Dibbrell & Co., 93 Ala. 127. On appeal to the chancellor the
Independent of these considerations, have complainants offered sufficient proof, ex parte or otherwise, in support of the averments of their bill, to justify the court in acting upon them as true ? As to the charge of collusion and fraud in respect to the claims of M. L. Robinson and E. M. Nixon : It appears that the debt of M. L. Robinson, as it originally existed, was a claim against the Attala Company, secured by mortgage. The assets of the Attala Company, including the mortgaged property, were transferred in the year 1891 to the Etowah Mining Company, which assumed the payment of the mortgage debt. There is no proof tending to show that this is not a bona fide debt, nor that the property mortgaged to secure it, is not ample for that purpose. The only rights of complainants to the property or assets which formerly belonged to the Attala Mining Company are through and by virtue of the transfer and conveyance of this property to the Etowah Mining Company. The transfer was encumbered with the mortgage to secure the Robinson claim.
The charge that the trustee had recognized and assumed to pay a fraudulent claim of fifteen thousand dollars to E. M. Nixon seems to have been utterly exploded. According to the ex parte data, which is not controverted, this claim amounts to only about seven thousand dollars.
The bill avers that the Etowah. Mining Company is insolvent. We have gone through the two hundred pages of ex■ parte affidavits, and exhibits, pro and contra the averments of the bill, and the only satisfactory data to show the financial condition of the Etowah Mining Company is that furnished by the trustee Nixon. He alone gives a list of the debts of the company and schedule of the assets. If his affidavit-is received as true, the company is more than able to pay all demands. On the other hand, if we accept as true his statement of the indebtedness (and there is no other) and reject his valuation of the property, and take the valuation of the complainants, we are not satisfied that it is insolvent. . A property owing no more, and capable of yielding under proper management a net .profit of from twelve to fifteen hundred dollars monthly, as averred in the bill.and
Excluding from consideration the charges of fraud and collusion against the trustee, and regarding only that of incompetency, without saying more, we are not prepared to hold that this averment is clearly sustained. The affidavits are very conflicting on this issue, but affiants on the part of the respondent seem to have had more experience in the business of mining ore. We are merely considering the question of the appointment of a receiver, and not evidence which may be taken on any proceeding 'looking to a removal of the trustee, or his accountability for waste and mismanagement.
The bill charges that the trustee, is insolvent. In all the mass of affidavits, not one except the appointed receiver, makes affidavit that he is insolvent; and this is made as a general conclusion without the statement of a single fact, upon which issue' could be taken. 'The trustee in his answer, which is sworn to and was before the chancellor, positively denies the averment of insolvency.
A serious and somewhat difficult question arises from the stipulation of the lease, and the different constructtions placed upon it by the litigants, and the consequences which may result from the one or the other construction. The complainants sue as creditors, and contend that the lease is a valuable asset, and by holding over the Etowah Mining Company has acquired the legal right to the interest in the same for an additional period of five years. On the other hand, the respondent contends, that it has not held over, and declines to elect to claim the additional term and makes tender of the property with the demand for payment for improvements and outfit, as provided in the lease. It further asserts, that to attempt to operate the mines and pay the increased royalty, will endanger the interest of its creditors and impoverish the Etowah Mining Company and destroy the interest of the stockholders. The lease bears one date, but it is contended that a majority of the lessors did not in fact sigu until long afterwards, and that there was no delivery of the lease to give it effect until several months subsequent to its date. There is another provision of the
By the injunctive process of the court, issued upon bond of complainants, payable to the respondent, the Etowah Mining Company and trustee, or the register, as may be directed, with good security, the respondent may be enjoined from ceasing to work the ore mines and leased property pendente lite, and by the use of both of these remedies (surety of the trustee, and the injunction bond) both litigants be fully protected until the rights of all are ascertained and adjudicated.
We'are fully convinced under the facts of the case,that the receiver selected was not a suitable person. A receiver appointed by the court should be capable, honest, impartial and without personal interest to serve-,
The complainants as creditors have the undoubted right to call the trustee to an accounting.
A decree will be here rendered, reversing and annulling the appointment of a receiver, and an order made requiring him to restore the property to the trustee, who should -file with the register an inventory of all that is returned to him and its condition, and that the receiver proceed to a statement of account and settlement of his receivership. The cause is remanded for further proceedings in accordance with the principles herein declared.
Reversed, rendered in part, and remanded.