160 Ga. 341 | Ga. | 1925
The Hall Hardware Company, on July 1, 1924, brought suit against the Ladson Brick & Tile Company, a corporation, J. E. Ladson, G. L. Doster, and J. E. Cliatt, the Ladson Lumber Company, a partnership composed of said Ladson, Doster, and
Petitioner further alleged that the transfer and assignment of the assets of said Ladson Brick & Tile Company to said partnership was without formal corporate action and without the knowledge and consent of the shareholders of said corporation, and that the same was unauthorized by law and operated to make Ladson and Doster and said partnership trustees of .the assets of said corporation for the benefit of petitioner and the other creditors thereof; and that the defendants now hold the assets thus assigned and transferred and converted, for the benefit of petitioner and the other creditors of said corporation, for which reason the defendants are bound to account to petitioner out of the assets of.said corporation for the amount of money due petitioner by said corporation. It was further alleged that in January, 1924, Ladson, Doster, and Cliatt procured the Ladson Lumber Company to be incorporated in Colquitt superior court, with a capital stock of $100,000, all of which, it was alleged in the application for charter, had been paid in; that all of the assets of the partnership of Ladson Lumber Company were taken over by said corporation, including the assets transferred from the Ladson Brick & Tile Company to said partnership ; that Ladson, Doster, and Cliatt became the sole shareholders and officers of the corporation of Ladson Lumber Company; and that the transfer and assignment of the property of the partnership to the corporation was with full knowledge by all the shareholders of the acts and conduct of the officers of the Ladson Brick & Tile Company in transferring the assets of said corporation to said partnership of Ladson Lumber Company. Petitioner further alleged, that the assets taken over by the defendants from the Ladson Brick & Tile Company consisted of personal property; that the amount thereof or exact nature and kind thereof were not known to petitioner, 'but a large portion of galvanized sheet-metal roofing, sold by petitioner to said corporation, of the value of more than $500, was taken over by the defendants and applied to their own personal use and enterprises; that a large quantity of brick so sold, of the value of $1000, was likewise taken over by the defendants and converted to their own use; and that a shotgun which was among the assets of said corporation, of the value of more than $250, was taken over by said defendants and applied to their own use. On information and belief petitioner says a great deal more
The Ladson Brick & Tile Company demurred to said petition, on the grounds: (1) .that there is no equity therein; (2) that it sets forth no cause of action; (3) that the cause of action, if any, is in the trustee in bankruptcy of the Ladson Brick & Tile Company, and not in plaintiff; (4) that, the suit being in equity, the petition should be dismissed because it is not sworn to as required by law. There are various grounds of special demurrer. The petition was afterwards duly verified.
The court sustained the third ground of demurrer, and dismissed the petition, on the ground that the right to bring this action was in the trustee in bankruptcy of the Ladson Brick & Tile Company, and not in the petitioner. To this judgment the petitioner excepted. This exception presents the sole question for decision raised by the main bill of exceptions. In the cross-bill of exceptions, the Ladson Brick & Tile Company alleges that the court erred in not sustaining its demurrer.on all grounds thereof.
Where the officers, directors, or sole managers of an insolvent corporation obtain a preference or advantage by acquiring its entire assets in extinguishment of a demand against it held by a partnership of which such officers, directors, or managers are members, will an action lie in the name of a creditor, who sues in his own behalf and in behalf of all other common creditors, against the corporation,' and such officers, directors, or managers, in which 'the suing creditor seeks to recover judgment upon an indebtedness of the corporation to him, and to have such assets applied to its payment, the insolvent corporation having been adjudged a bankrupt prior to the institution of the action; or will such action lie only in the name of the trustee in bankruptcy of such insolvent corporation? In Lowry Banking Co. v. Empire Lumber Co., 91 Ga. 624 (17 S. E. 968), this court held.that the directors of an insolvent corporation hold its assets as trustees for the benefit of its creditors, and that they are precluded by their
Section 72(a) of the bankrupt act provides that “The trustee of the estate of a bankrupt, upon his appointment and qualification, . . shall in turn be vested by operation of law with the title of the bankrupt . . to . . (4) property transferred by him in fraud of his creditors.” Section 72(e) declares that “The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication.” Bankruptcy Laws of U. S., pp. 35-36, §§ 72(a), 72(e). Under these provisions of the bankrupt act, the title to property of an insolvent corporation, acquired by the preference or advantage denounced by section 2222 of the Civil Code, upon the adjudication of such corporation as a bankrupt, and upon the appointment and qualification of the trustee, vests in such trustee, who is authorized to recover and reclaim it for the benefit of creditors. Stellwagen v. Clum, 245 U. S. 605 (38 Sup. Ct. 215, 62 L. ed. 507). This right of the trustee is exclusive, and a creditor can not file a creditor’s bill for the purpose of recovering property so conveyed or transferred. Wright v. Ehrlich, supra; Glenny v. Langdon, 98 U. S. 20 (25 L. ed. 43); Trimble v. Woodhead, 102 U. S. 647 (26 L. ed. 290).
This renders it unnecessary to pass upon the -assignments of error embraced in the cross-bill of exceptions.
Judgment on main bill of exceptions affirmedj cross-bill of exceptions dismissed.