Rainer Lumber Co. v. Hicks
| Decision Date | 17 December 1931 |
| Docket Number | 4 Div. 597. |
| Parties | RAINER LUMBER CO. ET AL. v. HICKS. |
| Court | Alabama Supreme Court |
Rehearing Denied Jan. 21, 1932.
Appeal from Circuit Court, Coffee County; W. L. Parks, Judge.
Bill in equity by J. W. Hicks, as receiver of the Elba Bank & Trust Company, against the Rainer Lumber Company and others, and intervention by the Standard Chemical Company, the Virginia-Carolina Chemical Company, and the Home Guano Company. From a decree overruling their demurrer to the bill the intervening defendants appeal.
Affirmed.
A. G Seay, of Troy, for appellants.
M. A Owen and J. C. Fleming, both of Elba, and M. S. Carmichael of Montgomery, for appellee.
J. W. Hicks, as receiver of the insolvent Elba Bank & Trust Company, filed his bill in the circuit court of Coffee county against Rainer Lumber Company and others, seeking to recover the assets and properties of the Rainer Lumber Company, and their application to the payment of the general indebtedness of the Elba Bank & Trust Company, which assets and properties the complainant avers were, in equity, the property of the insolvent bank, and which had been by Y. W. Rainer and others wrongfully diverted. It is averred that Y. W. Rainer was at the time, and had been for a number of years prior thereto, the president of the bank and in the active charge of its affairs, before the same was taken over for liquidation by the superintendent of banks.
It appears from the bill, as originally filed, that the Rainer Lumber Company is a corporation, and that the directors of the bank, with the exception of C. E. Dorsey and W. P. Windham, were the stockholders designated in the articles of incorporation of this lumber company. It appears also that the said Dorsey was a large stockholder in, and the said Windham, a heavy debtor to, the said bank.
It also appears from the original bill that the Elba Bank & Trust Company, during the years preceding its failure, had acquired from Windham and others a large amount of property, including gristmills, sawmills, real estate, and standing timber. With this property on its hands, the bank, in the very nature of things, saw that it would be embarrassed in any attempt that it might make to operate these different businesses, and it undertook to free, in some measure, its banking business from the very just criticism that might arise. So it was conceived to be the prudent and wise thing to do, to secure the incorporation of a concern to take over these properties. This was done, resulting in the incorporation of the Rainer Lumber Company, which thereupon took over the properties described in paragraph five of the bill.
It also appears from the averments of the bill that the Elba Bank & Trust Company undertook to buy and sell commercial fertilizers during the years next preceding its failure, and, to carry on this business, it conceived the idea of using the name of Rainer & Co. as a trade-name, and it was under this name that the bank became indebted to the Standard Chemical Company, the Virginia-Carolina Chemical Company, and to the Home Guano Company, Inc. But under whatever name contracted, it was the debt of the bank. The Windham Company had no properties. It seems that the indebtedness to the three last-named companies was large.
After the state banking department took over the Elba Bank & Trust Company, it seems that Y. W. Rainer, the president of the bank at the time of its failure, entered into a deal with the respondents Standard Chemical Company, Virginia-Carolina Chemical Company, and with the Home Guano Company, by which he undertook to deliver and convey to the three named fertilizer companies, or to two of them, with the right in the Home Guano Company to participate in the benefits of the transfer upon certain conditions, all the properties nominally standing in the name of the Rainer Lumber Company,...
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