101 Ga. 565 | Ga. | 1897
It appears from the record, that the stockholders of the Eatonton Branch R. R. Co. were engaged in litigation with each other about the road. In order to settle this litigation, they made and entered into an agreement whereby they agreed to apply to the secretary of State for a new charter of the road under the sections of the code relating to the same; and further, that, when this charter was obtained, the proper authorities of the company should issue $168,000 of bonds and secure the same by a mortgage upon the railroad property, the bonds to be due thirty years after date, and that the Eatonton Branch R. R. should then be sold to the Middle Georgia & Atlantic Railway Company; that upon the consummation of the sale, the latter railway company should guarantee the principal and interest of the bonds of the Eatonton Branch R. R. Co., and that these bonds should be then distributed amongst the stockholders of the latter company, they receiving the same as the purchase-money of the road. It was further agreed that certain of the stockholders of the Eatonton Branch R. R. Co., who are now the plaintiffs in this equitable proceeding, should transfer and surrender the stock held by them in the E. B. R. R. Co. to a committee named in the agreement. Subsequently this agreement was consummated, and the M. G. & A. Ry. Co. purchased the E. B. R. R. Co., and guaranteed the payment of the bonds which had been previously issued by the latter company, and these bonds were then distributed among the various stockholders of the Eaton-ton Branch company and received by them as provided for in the agreement. After the guaranty had been made and the M. G. & A. put in possession of the Eatonton Branch road, the M. G. & A. entered into negotiations with the Central of Georgia Railway Company to sell its whole line, including the Eatonton Branch R. R., upon certain terms and conditions named therein. The Central accepted the proposition, which was substantially as follows: The Central of Georgia Ry. Co. agreed to purchase the road and all the property of the M. G.
The petition alleges, in substance, that the plaintiffs relied upon the guaranty of the M. G. & A. Ry. Co., that the latter had sold all of its franchises, property, etc., and had gone out of business, and was therefore insolvent and would be unable to meet its guaranty when the bonds of the Eatonton Branch road fall due. They prayed that the bonds to be issued by the Central be seized by the court and held as security for the payment of the $168,000 of bonds which had been issued by the E. B. R. R. Co. and guaranteed by the M. G. & A. Ry. Co. They alleged that by the sale the M. G. & A. had disabled itself from performing its contract of guaranty, and that therefore the whole 'of said guaranty had matured and become due, and they prayed a decree of payment of the bonds against the M. G. & A.
Plaintiffs afterward amended their petition in several respects ; hut the allegations made therein are not material to a decision of the case, and it is therefore not necessary to state them here. Defendants answered; but it is unnecessary, in
This petition was not brought under section 2717 of the Civil Code, which allows courts of equity to grant injunctions and appoint receivers for the collection and preservation of the assets of an insolvent trader, upon the application of a certain number of creditors representing one third of the unsecured indebtedness, where the debt has become due and payment has been, upon demand, refused. Here the debt was not due, if indeed the relation of debtor and creditor existed at all; and no demand or refusal to pay was alleged. The case therefore falls within the general rule in equity, that a general creditor who has no lien, and has not reduced his claim to judgment, has no right to apply to a court of equity to aid him in the collection of his unsecured debts. This rule is well established by the decisions of this court, and, indeed, of all other courts which have equity jurisdiction. Cubbedge & Hazelhurst v. Adams, 42 Ga. 124; Johnson & Smith v. Farnum, 56 Ga. 144; Mayer & Co. v. Wood, March & Co. Ibid. 427; Crawford v. Spurling, Ibid. 611; Dodge v. Pyrolusite Manganese Co., 69 Ga. 665; Bessman v. Cronan, 56 Ga. 559; Scott v. Jones, 74 Ga. 762; Kimbrell v. Walters, 86 Ga. 99; 5 Thompson on Corporations, § 6839 and notes.
Since the decisions just cited have been made by this court, the legislature has ratified and adopted them in section 4918 of the Civil Code, which declares that “Creditors without lien can not, as a general rule, enjoin their debtors from disposing of property, nor obtain injunction or other extraordinary relief in equity.” This being so, the trial judge did not err in refusing the injunction and the appointment of a receiver to seize and hold the assets of the M. G. & A. Ry. Co., because of the allegations in the petition that that company, the guarantor, was conveying its assets to third persons or that its funds were being misappropriated by its stockholders. Especially is this true when the petition does not allege that the principal
For these reasons and others which might be mentioned, the judgment of the court below is
Affirmed.