134 Ga. 274 | Ga. | 1910
(After stating the foregoing facts.)
The judge of the superior court denied the petition of the receiver appointed by the court of bankruptcy that the receiver appointed by the State court be directed to deliver the assets in his hands to the petitioner. Was this error? This was not an equitable proceeding, with parties plaintiff and defendant, and with a prayer for the appointment of a receiver. It did not rest on the general powers of a court of equity as such, or of a court having equitable jurisdiction. The presiding judge based his action on the theory-that the company could surrender its charter to the superior court, and that the court could accept such surrender, and as an incident thereto, or a result thereof, could appoint -a receiver on its ex parte petition. In an opinion filed by him in deciding the question now before us for review, he said, among other things: "Whether the conclusion was judicially right or wrong, or however it may weaken or strengthen the jurisdiction of this court, the fact remains that the controlling idea with which the court assumed jurisdiction was based upon the resolution looking to a surrender of the charter. If a charter may not be surrendered to this court, then I have no hesitation in saying that in my judgment my jurisdiction is not as assured as I considered it when this court took charge of the estate. ' . . But the jurisdiction at last seems to rest upon the act of surrender.”
In England corporations were created either by virtue of the royal prerogatives or by act of parliament. If they were created by the crown, it was done by letters patent under its seal and duly enrolled. If by parliament, it was accomplished by an act enrolled and with the great seal attached. When grants by the crown were dissolved upon surrender by the grantees, the acceptance of the king of such surrender was required to be enrolled. Butler v. Palmer, 1 Salk. *191. A parliamentary grant could only be dissolved by act of parliament. In America there has been some diversity of views as to the necessity for an acceptance of a surrender of franchises, especially by a strictly private corporation. On the general subject see 2 Kent’s Com. 209; Boston Glass Mfg. Co. v. Langdon, 24 Pick. (Mass.) 49 (35 Am. D. 292) ; Revere v. Boston Copper C.o., 15 Pick. (Mass.) 351 ; Portland Dry Dock & Insurance Co. v. Trustees of Portland, 51 Ky. (12 B. Monroe) 77 ; Curien v. Santini, 16 La. Ann. 27 ; Polar Star Lodge No. 1. v. Polar Star
But it is unnecessary in the present case for us to decide whether a purely private corporation has a right to surrender its charter and dissolve itself without acceptance on the part of the State. Whether it has or not, the judgment under review was erroneous. First let us deal with it on the theory that acceptance was necessary, and consider whether the superior court, in the exercise of its equitable jurisdiction, had authority to accept a surrender, and, on the basis thereof and of the petition presented, to pass the order now before us.
In many of the States the legislature has provided a method by which a voluntar}r dissolution of a corporation may be had, or by which it may be dissolved or its assets administered under certain circumstances. Where there is such legislation, no difficulty arises as to the power of the court. In this State no provision has been made by legislative enactment for a voluntary winding up of a corporation on its own petition to a court of equity. When the original code was adopted, it contained a codification of the preexisting law on the subject of the dissolution of corporations, which lias been retained in later codes. It was declared that “Every corporation is dissolved — 1. By expiration of its charter. 2. By forfeiture of its charter. 3. By a surrender of its franchises. 4. By the death of all its members without provisions for a succession.” Civil Code of 1895, §1882. Dissolution by forfeiture dates from the judgment of a court of competent jurisdiction, declaring the forfeiture. §1883. On the subject of surrender it was stated: “A corporation may be dissolved by a voluntary surrender of its franchises to the State. In such case such surrender does not relieve its officers or members from any liability for the debts of the corporation.” .§1884. The question then arises, if a corporation desires to surrender its franchises, “to the State,” who has authority on behalf of the State to accept the surrender (if necessary), and thus complete the dissolution? Originally charters were granted by the General Assembly. By the act of 1843, Cobb’s Digest, p. 542, it was provided that a private corporation for any
The paragraph of the constitution above quoted (article 3, section 7, paragraph 18, Civil Code, § 5780), as amended, declares that all corporate powers and privileges to banking, insurance, railroad, canal, navigation, express, and telegraph companies shall be issued and granted by the secretary of State in such manner as shall be prescribed by law; and if the secretary of State should be disqualified to act in any case, then the legislature shall provide by general laws by what person such charters shall be granted. It would hardly, be thought that the constitution intended, in regard to the enumerated corporations, to 'authorize the secretary of State, or, in ease he
But it is suggested that section 188C of the Civil Code recognizes the power of acceptance of a surrender as being in the superior court. It reads as follows: “Upon the dissolution of a corporation, for any cause, all of the property and assets of every description belonging to the corporation shall constitute a fund- — first, for the payment of its debts, and then for equal distribution among its members. To this end the superior court of the county where such corporation was loeated shall have power to appoint a receiver, under proper restrictions, properly to administer such assets under its direction.” It does not on its face purport to confer on the courts the power to accept a surrender of franchises, but declares, that, “Upon the dissolution of a corporation for any cause,” etc. On turning to the act of 1855, from which it was derived (Acts 1855-6, p. 226), it will be seen that its title was, “An act to preserve and dispose of the property and effects of corporations after their dissolution, and to provide for the payment of the debts due by the same.” It declared that after its passage, if, “either by the expiration or forfeiture of its charter or in any other maimer whatever, any corporation should be dissolved,” its real estate should not revert to the grantor nor its personal estate escheat, nor should the debts due to and by such corporation at the time of its dissolution be extinguished, but its property should become a trust fund, first for the payment of its debts, and then for distribution among the stockholders. It also provided, that “it shall be the duty of the judge of the superior courts of the circuit in which such dissolved corporation may have been located, on a suitable and proper application of any creditor of (and on failure of any creditor to do so) by any stockholder in the same, to appoint a receiver.” Thus, if there were any doubt about the meaning of section 1886 of the Civil Code, a reference to the act from which it was derived will plainly show that it was not intended to confer power to accept a surrender of franchises, but to preserve the assets and liabilities after dissolution, for the purpose of having them properly dealt with.
If the granting of a charter by the superior court is treated as in, the nature of a legislature or quasi-legislative function, and not jusdicial in character, it would seem that an acceptance of a surrender of a charter is legislative in- character, and should be exercised
Aside from legislative provision, if a private corporation can dissolve itself by resolution of its stockholders, and thus terminate its. existence without any acceptance of the surrender of its charter, it would apparently be dissolved upon the passage of such resolution.. It can not well dissolve itself and be dead, but remain sufficiently alive to thereafter place itself in the hands of a receiver. If it were dissolved by virtue of the resolution, it would seem that it could not persist as a petitioner for equitable relief. If it were not dissolved by the resolution of its stockholders, but such resolution were-merely a declaration of a future intent to dissolve, then we have an undissolved corporation having itself placed in the hands of a receiver on ex parte petition, and asking equitable relief preventing-its creditors from interfering with it- or its assets.
The facts of the present case differentiate it from those in which a court of competent jurisdiction appointed a receiver, and where it has been held that such appointment can not be collaterally attacked, even if -erroneous. Moreover, as there were no parties defendant to the appointment of the receiver, creditors had no opportunity to be heard in opposition thereto, or to bring the' case to this court for review. The receiver appointed by the court-of bankruptcy petitioned the judge of the, State court to direct the-receiver so appointed to deliver the assets to him. This was not a mere disregarding of the appointment, but was a direct application.
The jurisdiction of the court of bankruptcy was denied by the defendant in error. The bankruptcy act of 1898 (30 Stat. 546, U. S. Comp. St. 1901, p. 3422), in enumerating acts of bankruptcy, stated as one of them that if the debtor had “made a general assignment for the benefit of his creditors.” Section 3, subsection a (4). In 1903 an amendment was made to this provision by adding the following words: “or, being ihsolvent, applied for a receiver or trustee for his property or because of insolvency a receiver or trustee has .been put in charge of his property under the laws of a State, of a territory, or of the United States.” 32 Stat. 797 (U. S. Comp. Stat. Supp. 1909, p. 1309). This dealt with two things, either of which, would constitute an act of bankruptcy. One was if the debtor, “being insolvent, applied for a receiver or trustee for his property;” the other was if a receiver or trustee has been put in charge of his property because of insolvency. In re Spalding, 139 Fed. 244 (71 C. C. A. 370). In the former it was sufficient if while insolvent the debtor applied for a receiver or trustee for his property. There can be no question that in the present case the debtor applied for and obtained a receiver for its own property.
But it was contended that the State court should not direct its receiver to deliver the assets to the receiver appointed by the court of bankruptcy until after the company had been adjudicated a bankrupt, as it denied insolvency and demanded a jury trial. Under sub-, section 3 of section 2 of the bankruptcy act of 1898, courts of bank
In the case at bar the United States district court, as a court of bankruptcy, had jurisdiction to appoint a receiver. If the defendant thought that he erred in so doing, or that the appointment was improvidently made, it or the receiver of the State court should have taken steps in the proper jurisdiction to have such order vacated. This court has no power to review the correctness of the decision of the court of bankruptcy; nor can such action of that court, within the limits of its jurisdiction, be collaterally attacked. If the
It was contended that the court of bankruptcy appointed a receiver without requiring him to give bond in accordance with the provisions of the bankruptcy act. We think this would be too rigid a construction to be placed upon the order. It was recited, that, upon hearing argument and consideration, it was ordered and adjudged “and upon petitioners giving bond in the sum of $5,000, conformably to the acts of Congress relative to bankruptcy,” etc. We understand this requirement of a bond to be a condition affecting the entire order, and not merely the provision immediately following. It was contended that the bond which was given and approved by the judge of the court of bankruptcy before the receiver appointed by him applied to the State court for possession of the assets did not have two resident sureties, as required by section 3e of the bankruptcy act of 1898. Under the general law authorizing the acceptance of surety companies on bonds, this would not seem to be erroneous. 28 Stat. 279 (U. S. Comp. St. 1901, p. 2315). Matter of Sears, Humbert & Co., 10 Am. B. R. 389, 393 (128 Fed. 275, 62 C. C. A. 623). If this constituted any irregularity, an application should have been made to the bankruptcy court. Matter of Haff, 13 Am. B. R. 354 (135 Fed. 742, 68 C. C. A. 380). It did not authorize the treating of the order of the court of bankruptcy as void. It was also alleged that the petitioning creditors sought to dismiss the petition in bankruptcy; but there was no evidence on this subject which would authorize us to hold that the court of bankruptcy lost jurisdiction.
. We feel sure that our learned brother of the superior court acted
Judgment reversed.