28 W. Va. 663 | W. Va. | 1886
This cause was commenced in the circuit court of Ohio county February 23, 1876, and is the same that is reported in 25 W. Va. 298. In pursuance of the mandate of this Court the cause was returned to the said circuit court, in which the plaintiff on Jauuary 31,1885, filed an amended bill, and such proceedings were had thereon, that on the 27th day of February7, 1886, a final decree was rendered in favor of tlie plaintiff against the administrator of A. J. Pannell, deceased, for the sum of $13,180.50, being the amount of claim mentioned in the plaintiff’s bill with interest thereon less certain dividends deducted therefrom. From this decree the said administrator obtained this appeal.
The amended bill, among other matters, alleges, that the said A. -J. Panned, on February 23,1871, drew and presented for payment at the Wheeling Savings Institution his check for $7,841.50; that before he drew this check he, with Alexander J. Cecil and Alexander Laughliu, had as a committee of the board of directors, examined into the condition of the said bank and found that it was hopelessly insolvent, and it was this knowledge that induced him to draw and present said check for the purpose of drawing from the bank the money which he then had there on deposit; that for said check he then and there received the following discounted notes then owned by the bank, viz : a joint and several note of Wilson, Dunlevy & Co., and W. P. 'Wilson for $1,000.00, dated December 10, 1870, and due at four months, and two joint and several notes of W. P. Wilson, W. H. Dunlevy and A. J. Panned,the one for $4,000.00, dated December 7, 1870? and due at six months, and the other for $3,000.00, dated February 5, 1871; that on the day following, February 24, 1871, the said Pannoll returned these notes to the bank andthe
By an additional amendment the plaintiff alleged that the said Pannell was simply the surety for accommodation upon the aforesaid two notes for $4,000.00 and $3,000.00 respectively,, that W. P. Wilson and W. H. Du'nlevy were the principals thei’ein as the bank well knew and as such received the whole consideration therefor, and that they were during the whole of the year 1871, and for a long time thereafter, solvent and could have been compelled by legal proceedings to pay the same.
Pannell’s administrator in his answer, denies upon information and belief that said Wilson and Dunlevy were solvent and that they received the whole consideration for said notes of $4,000.00 and $3,000.00, or that said Pannel was only the surety on said notes and that the bank knew any such' facts.
The same proceedings were had in this'cause and substantially the same objections made to the pleadings, orders and decrees, that were made by the plaintiff and appellant in the preceding cause of Lamb, Trustee v. Cecil, which we have just decided. It is unnecessary, therefore, that we should here again state or consider those matters, but we simply refer to the opinion in that cause for the reasons and grounds upon which we have disposed of the similar questions in this cause. There is one question presented in this which did not. arise in that cause, and that is, whether or not the appellant is entitled to have the amounts of the two notes aforesaid of of $4,000.00 and $3,000.00 respectively, set off against the claim sued for in this cause by the plaintiff?
This question was distinctly raised and fully argued on the former appeal, and would therefore seem to be res judicata; for, if the appellant was entitled to set off these notes, the plaintiff, at the most, would have been entitled to recover the value of the note for $1,000.00 only, yet the opinion of this Court on the former appeal states, that “the proof in the cause shows the right of the plaintiff to recover,” and the
Both in reason and in law there is a -wide difference between an insolvent corporation not using its franchises and a solvent one in the full exercise of all its powers and franchises. Neither the corporation itself, nor its stockholders have any beneficial interest whatever in its property or assets after it has become wholly insolvent and unable to exercise its franchises or carry on its business. By the insolvency of the corporation it is rendered incapable of pursuing the objects for which it was created. Its officers, or agents, properly cease to use its franchises after the insolvency has been ascertained; but their responsibility as to its assets do not cease. They continue to hold them as before — not for themselves, or for the use and benefit of the stockholders, but necessarially for its creditors. While it was solvent, and in the full enjoyment of its franchises, the entire beneficial interest in its property belong to the stockholders. But after the insolvency, while the legal ownership of the assets may continue as before, the beneficial interest of the stockholders clearly no longer exists. A state of insolvency pre-supposes that the capital-stock and assets of the corporation are insufficient to meet its liabilities to its creditors. The stockholders having incurred no personal liability for the debts have in point of fact no interest in the disposition of the corporate assets after the insolvency. In equity, therefore, as well as in law the beneficial interest in the assets must of necessity belong exclusively to the creditors. For the corporation, its officers and stockholders being simply the holders of the legal title and nothing more, the beneficial interest must belong to some other than they, and as there is none such other except the creditors, they must be the sole beneficial or equitable owners. The capital is the fund the creditors trusted, and to which, with the after-acquired property or assets, they can alone look for indemnity. Both stand pledged for the indemnity of the cor
In the case before us, under the most restricted rule, Panned, the appellant’s intestate, was not entitled to off-set his deposit against the claim of the plaintiff, except tot he extent he may be entitled a dividend as other depositors from the common-fund. According to the proofs a plain prima facie case is made, showing that Panned was not, as between the makers themselves, a principal debtor upon either the $4,000.00 or the$3,000.00 note, bntthat he was only the surety upon them for Wilson and Dunlevy who received the whole consideration. This was clearly the relation of the parties when the money was first obtained from the bank, and there is not a circumstance or particle of evidence to show that there was any subsequent alteration in their relations. If therefore, it be admitted that he as principal debtor would have a right to the set-off, it does not at ad follow that he as surety would be so entitled. The right to set-off his own debt is a very different matter from the right to set-off the debt of Wilson and Dunlevy or either of them. Wilson and Dunlevy were primarily bound, as between the makers, to pay these notes, and if Panned as surety paid them, whether
But in this cause, as in that of Lamb, trustee v. Cecil, supra, the circuit court did err in its decree of February 27, 1886, from which this appeal is taken, sotar as it credited the dividends, to which the appellant was entitled on the indebtedness of the bank to his intestate, as partial -payments on the amount of the plaintiff’s demand. These dividends were in the nature of offsets and should have been so allowed. The reasons for this conclusion are given in Lamb, trustee v. Cecil, supra. The said decree must therefore be reversed with costs to the appellant and such decree now entered by this Court as should have been then entered by the circuit court.
Beversbd.