Nesbit v. North Georgia Electric Co.

156 F. 979 | U.S. Circuit Court for the Northern District of Georgia | 1907

SHEIJBY, Circuit Judge.

This is a bill filed by John A. Nesbit, a citizen of Ohio, in his own behalf and in behalf of all other creditors of the North Georgia Electric Company, a corporation organized under the laws of Georgia. The only claim that the complainant asserts against the defendant is that the defendant is indebted to him in the sum of $5,000 upon a promissory note, dated August 1, 1905, and due two years after date, bearing interest at the rate of 6 per cent, per annum. The note is described as having been signed by the defendant company" by its then president, A. J. Warner, and made payable to D. M. Stewart or order, and indorsed by D. M. Stewart in blank. There is no averment that the complainant has ever sued at law upon the note and obtained judgment. He sues, in fact, as a simple contract creditor without a lien. The bill contains averments showing that the defendant company owns property of great value. The bill admits ignorance of the value of some of the property. It states on information and belief the value of part of the property. The allegations as to the value of the defendant’s property and the amount of the defendant’s indebtedness are very indefinite. It does not appear certain from the averments of the bill that the defendant corporation is even insolvent, but, if the bill can be construed as showing the insolvency of the defendant corporation, I do not think that the complainant, as a simple contract creditor, can come into a court of equity to enforce his claim without having first reduced it to judgment. There is nothing in the averments of the bill which takes it out of the operation of the general rule that a plaintiff must exhaust his remedies at law before he can proceed in equity. It further appears from the bill that one D. M. Stewart is an indorser on the note, and there is no averment of any kind as to his solvency or insolvency. So far as it appears from the averments of the bill, the complainant can collect his $5,000 by a suit at law against Stewart, and he certainly has no proper standing in equity unless he makes it appear by his bill that he cannot collect his note by a suit at law.

It is said that a receiver should be appointed anyway, because there is attached to the bill an agreement or consent, signed by the defendant company by “D. M. Stewart, President,” that a receiver be appointed. We are not informed as to the authority of the president to make such consent. It does not appear that there has been any meeting of the board of directors at which a resolution was passed consenting to the appointment of a receiver or conferring authority upon the president to make such consent. The D. M. Stewart who is president of the company is the indorser of the note sued on. It appears therefore that he has an interest in the suit adverse to the company, and if, under ordinary circumstances, he had the power to consent to the appointment of a receiver, such power ought not to be recognized in this case.

The bill on its face, as framed, does not, in my opinion, confer jurisdiction in equity, as it shows that the complainant has an adequate remedy at law.

For these reasons an order will be entered overruling the motion to appoint a receiver.