Beck v. Henderson

• Decision Date: 31 March 1886
• Citation: 76 Ga. 360
• Parties: Beck et al., receivers. vs. Henderson, and vice versa.
• Court: Georgia Supreme Court

76 Ga. 360

Beck et al., receivers. vs. Henderson, and vice versa.

Supreme Court of the State of Georgia

MARCH TERM, 1886.

[These cases were argued at the last term, and the decision reserved. Hall, J., being disqualified, did not preside.]

Equity. Decrees. Evidence. Corporations. Nonsuit. Stockholders. Before Judge Lawson. Jasper Superior Court. April Term, 1885.

This was an action of complaint in the statutory or short form, brought to the October term, 1875, of Jasper superior court by E. W. Beck, F. D. Dismuke and E. P. Speer, " who bring this suit as commissioners and receivers of the Griffin, Monticello and Madison Railroad Company and its assets, under"a decree in chancery in Spalding superior court, " against James Henderson. It was alleged that the defendant-was indebted "to your petitioners, as commissioners and receivers aforesaid, in the sum of $150, besides interest, on a certain promissory note." Attached to the declaration was a copy of the note sued on. It was dated April 15, 1872, and due seven months after date by the defendant, to the order of the Griffin, Monticello and Madison Railroad Company, for $150, endorsed "James S. Boynton, President."

The plaintiffs amended their declaration by alleging that the corporation was insolvent, its indebtedness being largely in excess of its assets in their hands, or accessible or available to them for the payment of debts; that, at the time of bringing the suit, the indebtedness was about $25,000, which is still due; that the creditors holding such debts, which are in judgment, are Lyon, McLendon & Company and George A. Cunningham & Company, and others whose names are not known to the plaintiffs; that the assets consist solely of 'notes and subscriptions of stockholders; that, from information and belief, they allege that seventy-five per cent of them are insolvent, and if the entire amount collectible is paid, the sum so collected will be insufficient to pay off the debts, and that the pro rata share of defendant liable to creditors of the corporation is the entire amount of principal and interest due on his note sued on.

The defendant demurred to the declaration, on the ground that it did not show any authority in the plaintiffs as receivers. Thereupon the court allowed the plaintiffs to amend by attaching to the declaration a copy of the decree and supplemental decree from Spalding superior court as follows:

"Lyon, McLendon & Co.

vs.

Griffin, Monticello and Madison R. R Co.

Bill for account, relief, etc., in Spalding superior court, and award made the judgment of the court.

" An award having been rendered in the above case, accompanied with a written agreement of the parties modifying the same, it is thereupon, for the purpose of executing and enforcing the same as so modified, as has been made the judgment of the court, it is ordered, adjudged and decreed by the court, in accordance with said award and agreement, that the complainants, Lyon, McLendon & Co., do recover of the defendant, the Griffin, Monticello and Madison Railroad Company, the sum of ten thousand four hundred and twenty-six dollars and fifty-nine cents ($10,426.59-100), with the sum of four thousand five hundred and seventy-seven dollars and sixty-five cents interest up to the 20th day of August, 1874, and all further interest on the principal sum from this date to be computed at ten per cent, until paid, and that execution issue for said amount in favor of complainants against defendants. And it is further ordered and decreed that the second amount to be paid in cash, as in said award to complainants, and they do recover of defendants the sum of one thousand five hundred and forty-eight dollars and sixty three cents, as principal, and the sum of one hundred and seventy-one dollars and fifteen cents to the 20th August, 1874, and for all interest until paid, to be at 7 percent., and that execution issue in favor of complainants against defendants for said amount; said amount so decreed being amount due complainants from defendants in cash, as set forth in said award, after allowing credits as provided for in the agreement of the parties, accompanying said award. It is further adjudged and decreed that the complainants do recover of the defendants the sum of eight thousand one hundred and ninety-three dollars and thirty-three cents, and which may be discharged and satisfied by defendant's executing and delivering to the complainants, by the proper officers of the said Griffin, Monticello and Madison Railroad Company, within sixty days from this date, first-mortgage bonds of the said railroad company in proper legal form, to bear interest at the rate of seven per cent., payable semi-annually, with interest coupon attached, to the amount of the same; and if said mortgage bonds are not so executed and delivered within the time stated therein, said amount is to be enforced by execution to be issued in favor of complainants against said defendants for money in lieu of said bonds; the amount so decreed and adjudged being the amount found due in said award, as provided for by the agreement attending said award. It is further ordered and adjudged and decreed that the defendant do execute and deliver to said complainants certificates of stock in said railroad company to the amount of ten thousand five hundred and twenty-one dollars and two cents, the amount found due complainants, less by the amounts of two thousand dollars, as abated from said award, asfound due complainants in stock, as per agreement of parties representing the same..................

And it is further ordered and adjudged and decreed that if this decree is not satisfied upon the terms and conditions herein set forth in said modified award within sixty days from this date, it is thereupon ordered, adjudged and decreed, as provided for in said award, that E. W. Beck, Esq., F. D. Dismuke, Esq., and E. P. Speer, Esq., of the county of Spalding, be and the same are hereby appointed commissioners with powers of receivers to take possession of said Griffin, Monticello and Madison Railroad Company, and after due notice, with authority to sell the same, with all its rights, privileges, franchises, immunities and right-of-way, road bed and appurtenances, and also all assets of said railroad company of every kind and character, with full authority to collect the same and hold the proceeds of all sales and collections subject to the further order of this court for distribution among creditors and stockholders. And it is further ordered and decreed, if a sale of said railroad and its franchise becomes necessary to enforce this decree, it shall take place in the city of Griffin, before the court-house of said county of Spalding, after advertising the same at least sixty days in three public gazettes of this state. And it is further ordered and decreed that the cost of these proceedings up to the award be paid equally by complainants and defendants.

John I Hall,

Judge S. C. F. C."

Lyon, McLendon & Co.

vs.

The Griffin, Monticello and Madison Railroad Co.

Bill, etc., in Spalding Superior Court.

"It being made to appear to the court that, at the August term, 1874, of this court, a decree was rendered in the above stated case, which decree provided for the appointment of commissioners to sell the property of the defendant, and commissioners so provided for and appointed, to-wit, E. W. Beck, F. D. Dismuke and E. P. Speer, were given the power of receivers, and in the exercise of their power as such receivers, they were required to collect the assets of said company and report their acts and doings to this court; and it further appearing that said receivers, in the exercise of the power thus conferred upon them, have instituted suits in the counties of Spalding, Butts, Jasper and Morgan, to recover of the subscribers to the capital stock of said company the amount due by them on the subscription to the capital stock of said company; and it being made further to appear that some of the parties so sued have made defence that the authority was not given to the receivers and that receivers have compromised with some of the subscribers to the capital stock, to-wit, by the original decree: It is therefore ordered, adjudged and decreed that the act of the receivers in bringing suits, as aforesaid, against the subscribersto the capital stock of said railroad company, is approved and sanctioned, and that said receivers are hereby invested with full power to prosecute the suits already instituted by them and to begin other suits, if any other or further suits be necessary, in order to collect in the assets of said company. It is further ordered, adjudged and decreed that said receivers have power and authority to compromise any doubtful claim that may be a part of the assets of said railroad company. It is further adjudged and decreed that settlements or compromises heretofore made by the receivers with debtors to said company are ratified and approved by the court. August term, 1881. Spalding superior court.

By the court. S. C. McDaniel,

Judge pro hac vice."

The appointment of the judge pro hac vice by the clerk, on account of the disqualification of the presiding judge, also appeared. It recited that the solicitors of the parties had failed to agree upon an attorney to act as judge pro hac vice.

To the allowance of this amendment defendant excepted.

Defendant then demurred to the amended declaration, on the ground that the original decree did not authorize the receivers to sue, and that the supplemental decree did not cure the defect. The demurrer was overruled and the case continued. The defendant filed a bill of exceptions pendente lite to this and the ruling just above stated.

The defendant filed certain pleas, which were, in substance, as follows:

(1.) The general issue.

(2.) The note sued on was given to the railroad company, of which the plaintiffs are receivers, for subscription to its stock, and such subscription was its...