Birmingham age-herald., 1895-04-30

tor is not of a confidential character there can, of course, be no doubt. 'Tis absurd to say that the creation of that relation involves aught of accident, mis- take or ignorance. That a debtor has property of his creditor which in equity and good conscience belongs to the cred
 itor because the debt contracted in its sale has not been paid, there is no war rant for saying. Equally unwarranted is the idea that in equity all the property of debtor who has become insolvent belongs to the creditor and is held by And this idea of ownership in the cestui que trust underlies the whole doctrine of trusts of every description. In all trusts the legal title is in one. the equitable ownership in another mere debt against one who has property, whether solvent or insolvent, is not ownership, nor is right to charge a fund. or a lien upon it, the beneficial ownership of it. Confessedly the property and assets of a solvent corporation do not constitute a trust fund for it's creditors. Can it be possible that the mere passing of a corporation from a state of solvency to a state of insolvency amounts to a dec laration of an express trust for cred itors, or to a resulting trust, upon the theory that title to the assets of the con eern should have been made to the cred itors? Or is it conceivable that this mutation from the one condition to the other does violence to confidential re- lation which never existed, and hence is a constructive trust? Or that this mere change of inherent conditions is the yes titure in the corporation through the ig
 norance or mistake of the creditor, or through mistake, or through fraud of a greater title, or title to more property than was contemplated and intended, when before the change, confessedly, the corporation had the absolute and inde- feasible title free from all trusts to all it's property and assets, and when the change itself involves nothing of fraud, of abuse of fiduciary relations, of igno- rance, or mistake or accident? The learned judges who uphold this "Ameri- can doctrine" may find something in these conditions of facts upon which to construct trust, but I confess my utter inability to follow their arguments or to see with their eyes. Nothing clearer to my humble judgment than that the insolvency of a cOrporation-the exist ence of a corporation with property and debts, the property being insufficient to spay the debts-is not within any defini- 2tion of any trust known to equity juris- prudence. The creditors of such corpora 'tion have the same rights against it as they have against an in solvent partnership, or an insolvent in- dividual, debtor and no other or more. They do not at law or in equity own the property of the one or the other; but the property of each is a fund for the pay ment of debts in the sense that neither can give it away, or dispose of it with intent to hinder, delay or defraud cred itors. The property of the individual cannot be appropriated to his own use to the exclusion of his creditors under any'cover whatever. The property of the partnership cannot be appropriated to the personal use of the partners, or in payment of the debts of the individ- uals composing the firm, to the exclu- sion of partnership creditors under any . pretense whatever. And so the property , of the corporation cannot be diverted to the use of the stockholders to the exclu- sion of creditors under any oircum-