Warren v. Kilgroe

McCLELLAN, J.

According to the certificate of appeal, review is now sought of the chancellor’s action “overruling the motion to dissolve the injunction for want of equity in the bill.” The consideration here Avill be restricted to that action.

The original bill was filed by a simple contract creditor, and so on behalf of all other creditors. It was later amended; but this amendment did not alter its theory nor interpose a named complainant of greater dignity of claim against the corporation. As amended, the bill avers that complainant is a creditor, holding a promissory note of the Farmers’ Union Warehouse & Storage Company, a corporation, and that the corporation is insolvent. It contained other' averments, not necessary, for the present occasion, to rehearse. The prayer, among other things, is that a receiver be appointed and the assets collected and sold for thé benefit of all creditors of the corporation. Subsequently other creditors secured judgments against the corporation, and executions thereunder were levied upon the property thereof. Thereupon the complainant, by supplemental bill, brought these facts before the court, praying an injunction to restrain the sale of the property so levied upon. Injunction to that end was issued, and appellant moved that it be dissolved on the ground indicated at first.

Code, § 3509, provides: “The assets of insolvent corporations constitute a trust fund for the payment of tlie creditors of such corporations, which may be marshaled and administered in courts of equity in this state.”

*479 It is too evident for donbt that this bill, original and supplemental, presents a cause within the plain letter of the statute, and especially so when -the jurisdiction of equity over the enforcement of trusts and the administration of trust estates is considered.

It is not now important or desirable to take account of the cases of Corey v. Wadsworth, 99 Ala. 77 , 11 South. 350 23 L. R. A. 618, 42 Am. St. Rep. 29 , Goodyear Rubber Co. Scott, 96 Ala. 439 , 11 South. 370 , or O’Bear Jewelry Co. v. Volfer & Co., 106 Ala. 205 , 17 South. 525 , 28 L. R. A. 707, 54 Am. St. Rep. 31 , in the particular that they treated or affected the question of the trust character of the assets of the corporation; the statute quoted having, by its terms, established a status and fixed a rule wherefrom equity’s jurisdiction for the marshaling and subjection of assets of insolvent corporations is open to be availed of by any character of creditor of an insolvent corporation.

The bill considered in Dickinson v. Traphagan, 147 Ala. 442 , 41 South. 272 , Avas by a simple contract creditor, and sought only to compel a subscriber for capital stock of a corporation AA'hich became, insolvent to pay the difference betAveen its par value and what that subscriber had actually paid. It was ruled that such a bill did not fall AA'itliin the quoted statute. Manifestly that Avas true. It sought no administration of a trust estate; and, as AA'as necessary, the bill not being AA’itliin the statute, the court considered its sufficiency under doctrines apart from the influence of the statute.

The discussion of this statute in City Bank & Trust Co. v. Leonard, 168 Ala. 404, 421 , 53 South. 71, 76 , is not authoritative. All the court said Avas this: “All that Ave decide in this case is that the chancellor did not err in denying the petition.”

*480 The court did not err in declining to dissolve the injunction.

Affirmed.

All the Justices concur.