Wheeler v. Matthews

• Decision Date: 17 November 1915
• Citation: 70 Fla. 317,70 So. 416
• Parties: WHEELER v. MATTHEWS.
• Court: Florida Supreme Court

70 So. 416

70 Fla. 317

WHEELER v. MATTHEWS.

Florida Supreme Court

November 17, 1915

Appeal from Circuit Court, Dade County; H. Pierre Branning, Judge.

Suit by George Matthews, as receiver of the Wheeler Mercantile Company, against H. G. Wheeler. From an order overruling a demurrer to the bill, defendant appeals. Reversed.

Syllabus by the Court

SYLLABUS

The assets of an insolvent corporation do not ipso facto become a trust estate as to which the corporation or its officers become the trustees and the creditors of the corporation the cestuis que trustent, so that it may be administered as such by a court of equity. The assets of such corporation may be administered by a court of equity upon the theory that they belong to the creditors, rather than to the corporation, only when the court of equity takes possession of them upon some recognized principle of equity jurisdiction.

Where the president of an insolvent corporation collects the assets of the corporation consisting of money due on certain fire insurance policies, accounts due to the corporation and money arising from the sale of goods damaged in a fire, and uses the money so collected to pay some creditors of the corporation in full, others in part, and others nothing at all, such conduct on the part of the president does not of itself constitute fraud on his part, nor is it a spoliation of a trust fund.

Where a bill in equity by the receiver of an insolvent corporation against the president seeks an accounting from him as the main relief and discovery as incidental thereto shows on its face that before the appointment of the receiver the president used all the assets of the corporation collected by him to pay its creditors, preferring some, and not paying others, and shows no other ground for equitable interference a general demurrer to the bill for lack of equity will be sustained.

The court appointing a receiver for an insolvent corporation may upon proper application to it by the receiver require the corporation or its officers to turn over to him the papers books, and accounts in its or their possession belonging to the corporation.

COUNSEL Atkinson & Burdine and J. C. Gramling, all of Miami, for appellant.

A. J Rose, of Miami, for appellee.

OPINION

ELLIS J.

This is an appeal from an order made by the judge of the circuit court for Dade county overruling a demurrer to a bill filed by the appellee here against H. G. Wheeler for an accounting.

The amended bill of complaint alleges that the 'Wheeler Mercantile Company' is a Florida corporation and was organized in 1911, for the purpose of conducting a general mercantile business at Ft. Lauderdale, Fla.; that in June, 1912, the entire stock of goods of the corporation was destroyed by fire; that before and at the time of the fire H. G. Wheeler was the president of the corporation, and after the fire proceeded to collect certain assets of the corporation, consisting of the insurance for which the stock of merchandise was insured, also certain accounts due the corporation, the money on deposit in bank, and a sum of money from what was known as the 'salvage sale' from the said fire, all of which sums of money so collected aggregated $18,563.47. It is alleged that these sums of money were collected by Wheeler after the fire, 'without warrant or authority from the board of directors and without any authority of any kind from said corporation'; that at the time of the fire the corporation owed debts in excess of the total sum collected by Wheeler; that it was insolvent, unable to pay its debts in full, and ceased to be a going concern; that the property owned by the corporation amounts in value to less than $500, and consists of an equity in a few lots in Ft. Lauderdale; that the corporation owes about $7,000, and the receiver has no money or effects with which to pay the debts; that in February, 1913, the appellee was appointed receiver of the corporation; that Wheeler had paid out of the moneys collected by him certain creditors, and had paid on account various sums to other creditors, and had refused to pay the claims of a 'large part of the creditors'; that he had refused to make or render any accounting of the money collected after the fire or disposition of the same; that the receiver did not know what creditors had been paid, or the amounts paid by Wheeler to them, and that the receiver had been authorized by the court appointing him to institute this action against Wheeler.

The bill prayed for accounting against Wheeler of the moneys collected by him after the fire, and what claims of creditors or others were paid by him, and that he pay over to the receiver such sums of money which may have been paid by him to any person who was not entitled to receive payment, and for general relief and subpoena.

To this bill the defendant...