Court Opinion

ID: 7988622
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:28:26.104804+00
Date Added: 2024-06-11T16:35:16.892641
License: Public Domain

CalhooN, J.,
delivered the opinion of the court.
The proceeding by the stockholders of the Baird Mercantile Company by bill in equity, averring its insolvency, with no party defendant, and praying for a receiver to collect its assets and distribute pro rata to its creditors, was absolutely void. It could not support itself or anything connected with it. The bond given by the receiver attempted to be appointed in this void proceeding was, therefore, also a nullity. Moreover, it showed by its own recitals that it was a nullity. The evidence shows, as we think, absolute good faith. The stockholders who filed the bill, their attorneys and the creditors manifestly thought the proceeding valid, and that the court had jurisdic-tiction to hear and determine it. It was a mistake all around, but with the utmost bona fides. All the creditors thought it valid, for all registered (heir claims in order to obtain theirp>ro rata shares in the expected distribution by the receiver. Of course the proceeding bound nobody, and might be collaterally attacked anywhere. Any creditor might have ignored it and sued at any time during its pendency. It was merely a question of diligence. The Starling & Smith Company did sue, and got judgment against the insolvent corporation and the receiver, as any other creditor might have done. It is ño *277answer that the receiver, so called, had, for his own convenience, deposited his collections with the Starling & Smith Company, any more than if he had made the deposit with any other creditor, or any other person.
Our view of the law and the facts conducts us to a conclusion different from that arrived at by the learned chancellor, and the cause is
Reversed, and a decree entered here dismissing the bill, at the costs of appellees.