Birmingham age-herald., 1895-04-30

trustee thereof, and the complainants and the other creditors were the cestuis que trust thereof and that the chancery court, by virtue of it's general jurisdic- tion over trust estates, was competent to take charge of this fund upon the in- vocation of such cestuis que trust, re- store and protect it by collecting moneys belonging to it from all sources. however diverse and dissociated with each other they might be, and to ultimately settle the trust by dividing the fund ratably among the beneficiaries
 The respondents by their demurrers in sist that said assets do not constitute trust fund in the sense necessary to the maintenance of the bill, exhibited. as it is, against parties who have nothing and are not chargeable with any wrong, in common, but whose acts, claims and att titudeS in respect of and toward the cor poration are entirely distinct and inde- pendent; and hence they say that the bill is multifariouS And in the argu- ments submitted in this court the de- cree below is attempted to be supported solely and expressly upon this theory of the spoliation of trust estate; so that the main, if not only. question presented on this appeal is whether the assets of an insovent corporation constitute trust fund for it's creditors in the proper and essential meaning of those terms.
 This whole idea that the property of insolvent corporations is held by them in trust for credtors-is a trust estate in their hands--and to be administered by ehancery as sIch' originated or,I in in Wood vs. Drummer, Mason, 30S. It had no existence at common law, and has none to this day in the law Of Eng land; but it is distinctly creation or some courts in this country, and known in jurisdictions where it obtains as the American doctrine' This court has. quite recently adopted it, and held in the cases of Corey vs. Wadsworth,-99 Ala. 6S-Goodyear Rubber company VS. scott & Co-96 Ala. 439-and Gibson vs. Trow- bridge Furniture company-Ib. 357-that the assets of an insolvent corporation is impressed with trust in the hands of the company, in favor of its creditors first and then in favor of its stockhoi- ders. The present writer dissented from the opinion and conclusion of the court in each. of those cases To his mind there islnothing clearer,in principle than the proposition that the property of corporation, solvent or in- solvent, bears identically the same relations to the creditors of such corporation as the property of an indi- vidual or copartnership, solvent or insol- vent sustains to the creditor of the indi- vidual, or partnership, and is or is not to be impressed with frust character upon the same circumstances and under the same conditions ind the first case as
 
 it's charter every corporation authorized to hold and dispose of property at all is entitled, and this generally by the very terms of the statute creating it, to hold and to dispose of it as a natural person might hold and dispose of it under the laws of the land. As said by Judge Bradley in Graham vs. railroad company. 102 U. S. 148: Tn law a corpora tion is as distinct a being as an individ- ual is, and is entitled to hold property Gf not contrary to it's charteD as abso- lutely as an individual can hold it. Its estate is the same. it's interest is the same, it's possession is the same" An individual not indebted may give his property away, provided the gift is not actuated by a purpose to defeat future creditors So can partnership. And so also undoubtedly can corporation if the gift would not be violative of its charter. An individual owing debts but solvent cannot give away his property to the prejudice of existing creditors. Neither can a partnership, nor a corporation. An insolvent individual and an insofvent partnership mayor might have before the act of 1892-3-sell and copvey all. of his or it's property to one creditor in pay ment of his debt the valuation being fair, the price adequate and no beneht being reserved to the debtor. And so, as expressly ruled by this court in Goodyear Rubber company vs. Scott & Co.,, and Gibson vs. Trowbridge Furniture com pany, supra, following the decisions in other states where this American doe Urine" obtains, may an insolvent corpora ton sell and convey all its property or apply all it's assets to the payment of one creditor leaving nothing for others Was usch a disposition of a trust estate ever permitted by any court in any land under any system of Jurisprudence? am unable to conceive of it. Certain things have heretofore been generally supposed to be essential to trust estates There must be property held in trust There must be trustee, or the chancery' court in the place of trustee. There must be beneficiaries-cestui que trust The property belongs in equity to. the cestuis que trust they are beneficially interested in it or entitled to 1t. The legal title is in the trustee. Now when the beneficiaries constitute class anu take or are entitled in equity to take the prop ertv held in trust as members Of class, such as the heirs of A. B. or the legatees na med in the will of C.. D. or as creditors. nobody except the votaries or this 'American doctrine has ever supposed that one member of the class, all mem bers of which are equally interested m the trust property, would be entitled at the election of the trustee to take the whole estate. This is at war with all es- sential notions of trusts and equitable jurisdiction and administration Of them. 1t may be argued, however, that these de- cisions are wrong in this particular. but sound in respect of the declaration that the property of insolvent corporations is trust property. But the decisions are not wrong in this particular; the soundness of the proposition they assert has long been recognized by this court-Allen vs. railroad company, II Ala. 437; Goodwin vs McGehee, Is Ala. 232. Given the power, which cannot be denied, to hold and dispose of property as an individual, and the we'll settled doctrine in this state, and generally, that the insolvent individ-