Birmingham age-herald., 1895-04-30

all the doctrine means. The expression used in Wood vs Drummer. Mason, 3OS, has, however, been taken up as new dis eovery. which furnished a solution of every question on the subject. The phrase that the capital of a corporation constitutes trust fund for the benefit of creditors is misleading. Corporate property is not held in trust, in any proper sense of the term. A trust implies two estates or interestS-one equitable and one legal; one person, as trustee, holding the legal title, while another, as the cestui que trust, has the beneficial interest Absolute control and power of disposition are inconsistent with the idea of trust. The capital of corporation Is it's property. It has the whole benefi- cial interest in it, as well as the legal title. It may use the income and profits of it. and sell and dispose of it, the same as natural person. It is a trustee for it's creditors in the same sense and to the same extent as natural person, but no further" Hospes vs. Northwestern Manufacturing Co.,, AS Minn., 174, s. c. 31 Am. St. Rep. 637, 641-2.
 The supreme court of Michigan is equally pronounced against the trust fund" doctrine, and in support OF the right of a corporation, solvent or insolvent, to hold and deal with it's property precisely as if it were an individual. That court, in an opinion by Montgomery, J., says Nor is it the law of this state that, as soon as a corporation becomes insolvent, the directors of the corporation become trustees for all the creditors alike, in such sense as to prevent their giving valid security by way of preference to one of the stockholders or directors. We are aware that the decisions in the Vari- ous states are not uniform as to the ques- tion, and that number of very eminent text writers have deprecated state of the law which admits of such preferences. But. to adopt the language of Dillon, J., in Buell. vs. Buckingham, 16 Iowa, 2S4, this condition of the law may constitute good legis- lative reason for giving pro rata to out side creditors, but the legislature mu.t furnish the remedy In the case referred to it was held that being an officer of the corporation did not deprive Buellof the right to enter into competition with the other creditors and run race of dili- gence with them. See also Hallam VS Hotel Co. 56 Iowa, 179, 9 N. w. Rep. III; Garrett Vs. Flow company Qowa), 29 N. w. Rep. 395; Smith vs. SSeary, AZ Conn. 54; Catlin vs. Bank, Conn., 233 Bank ing-company vs. Claghorn, 1 Speer Eq. 545; Bank vs. Whittle, IS Va. 739; Leavitd vs. Mining company, Utah, 265 Pac. Rep. 356; Whitwell vs. Warner, 20 Vt. 444; Holt vs. Bennett, (Mass) Is N. E. Rep. 6; Oil company vs. Marbury 91 U. s. 5S7; Wilkinson vs. Bauerle, CN. J. Err. & 'App.) Att. Rep. 514 The rule in thisl state has, we think, been established
 
 Doug. (Mich), that a corporation may, in the absence of legislative restriction. deal with its property precisely as an individual may and may prefer one creditor over another; and hence that the assets do not become trust fund.-, for pro rata distribution among all its creditors, until such time as steps are taken under the Winding up Act" chapter 2s2, How. St. This is the sub- stance of the rule stated in both Town vs. Bank and Turnbull vs Lumber com pany. And in the later case of Kendall vs. Bshop a mortgage had been given to secure the directors of the corporation, and to secure paper upon which they were indorsers The question under con sideration was fully discussed in the briefs of counsel, and it was said by Jus tice Campbell:. There seems to be no reason why one honest creditor should be on worse footing than another, and we do not find in our law any such dis tinction." Bank of Montreal ct al. Vs Potts Salt and Lumber company ct al, 51 N w Rep. 512. And to like effect are. the cases cited in the foregoing quota tionS.
 In line with this view Judge Caldwell in Gould vs. l.. R. & T. Railroad com pany (52 Fed. Rep. 6S3) said: "1t is un- doubtedly true that the property of a corporation is in one sense, trust fund for the payment of it's debts; but this rule means no more than that the prop erty of a corporation cannot be distrib- uted among it's stockholders, or applied to any purpose foreign to the legitimate business of the corporation, until it's bebts are paid. The rule, so
 far as it relates to the payment of debts. is satisfied whenever the property of the corporation is applied to the payment or any of it's bona fide debts.' Other authorities might be collated on the question under consideration and in
 support of the view I have taken of it,
 but the foregoing will suffice, IS thought for the purposes of this opinion. Upon them and by the force of the ele-
 mentary principles of trust estates, 1 am impelled to the conclusion that the
 property of an insolvent corporation is not a trust fund or estate, accurately speaking, or in any sense other than that when the chancery court takes pos session and control of such property up- on some general principle of equity juris-
 diction wholly independent of any idea that the property constitutes trust fund, it will be administered for the equal benefit of creditors. It follows that the bill cannot stand against the demurrers for multifariousness unless that objection can be met upon some oth- CT consideration than the trust charac- ter of the corporation property and aS- sets which is alone and expressly, both in the averments of the bill itself and in the argument of counsel, relied on to support the decree overruling the de- murrers I do not think the objection can be met upon any other ground. There is no connection between several of the matters brought forward by. the bill and the defendants attempted to be charged in respect of some of these mat ters have no interest whatever in others. For instance: The Alabama National bank did not participate in the wrongs committed upon the corporation in re- spect of the subscriptions to it's stock by the O'Bears and Copeland, and it is not interested in the present effort to right those wrongs. Again, the bill seeks