Birmingham age-herald., 1895-04-30

becomes insolvent, a court of equity takes possession of it's property, it recog- niZeS the fact that in equity the partner ship creditors have a tight to payment out of those funds in preference to in- dividual creditors as well as superior to any claims of the partners themselves. And the partnership property is therefore sometimes said, not inaptly to be held in trust for the partnership creditors, or that they have an equitable lien on such property. Yet. all that is meant by such expressions is the existence of an equitable right, which will be en- forced whenever a court. of equity. at the instance of proper party and in proper proceeding, has taken possession of the assets. It is never understood that there is specific lien or a direct trust.
 "A party may deal with corporation in respect to its property in the same manner as with an individual owner, and with no greater danger of being held to have received into his possession property burdened with trust or lien. The officers of a corporation act in a Judiciary capacity in respect to its prop erty in their hands, and may be called to account for fraud, or sometimes even mere Encouragement in respect thereto; but as be S7aen itself and its creditors the corporation is simply debtor, and does not hold it's property in trust or subject to lien in their favor in any other sense than does an individual debtor That is certainly the general rule, and if there be any exceptions thereto, they are not presented by any of the facts in this case. Neither the in- Solvency of the corporation, nor the exc cution of an illegal trust deed, nor the failure to collect in full all stock sub scriptions, nor, all together. gave to these simple contract creditors any lien upon the property of the corporation, charged direct fharpnn Rollins vs Brlerfield Coal and Iron Com pany, 150 U. s. 371. 381-3S6.
 The supreme court of Minnesota, in an able opinion by Mitchell, J., also re- pudiates this idea that the property of an insolvent corporation is a trust fund. Of it it has this to say: This trust fund doctrine, commonly called the American doctrine, has given rise to much confusion of ideas as to it's real meaning and much conflict of decision in it's application. To such an extent has this been the case that many have ques- tioned the accuracy of the phrase, as well as doubted the necessity. or expe- diency of inventing any such doctrine. While convenient phrase to express a certain general idea, it is not sufficiently precise or accurate to constitute a safe foundation upon which to build a sys- tenn of legal rules. The doctrine was invented by Justice Story in Wood vs. Drummer, 3 Mason, 30S, which called Tor no such inVen- tion, the fact in that case being that a bank divided up two-thirds of it's capital among its stockholders without provid- ing funds sufficient to pay it's outstanding bill holders. Upon old and familiar prin- ciples, this was a fraud on creditors. Evidently all that the eminent jurist meant by the doctrine was that corpor- ate property must be first appropriated to the payment of the debts of the com pany before there can be any distribution of it among stockholders-a proposition tha t q ccInd unon the nlainest nrinciples