Court Opinion

ID: 6654644
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:56:53.206828+00
Date Added: 2024-06-11T15:59:50.876697
License: Public Domain

Pound, C.,
concurring.
The difference in terms and subject-matter between section 4 of the article of the constitution relating to miscellaneous corporations, and section 7 of the same article, is such that if the question Avere a new one it would deserve very serious consideration. But a long line of decisions seems to have established a construction of the latter section which can not be departed from at this time without mischievous consequences. In Farmers’ Loan & Trust Co. v. Funk, 49 Nebr., 353, and Hastings v. Barnd, 55 Nebr., 93, the provisions of section 4 as to the conditions precedent to enforcement of the liability were read into section 7. In Farmers’ Loan & Trust Co. v. Funk it was held also that the liability created by section 7 must *422be enforced by the receiver of the corporation, if there is a receiver; and in Brown v. Brink, 57 Nebr., 606, that a creditor has no standing in a suit brought under said section unless the.receiver is mismanaging his trust. This court had previously stated in Farmers’ Loan & Trust Co. v. Funk that the effect of section 7 was to create a trust fund to be collected and administered for the benefit of creditors, and that proposition was reiterated in Pickering v. Hastings, 56 Nebr., 201.. The logical result of these decisions is to be found in State v. State Bank of Rushville, 57 Nebr., 608, and Morrison v. Lincoln Savings Bank & Safe Deposit Co., 1 Nebr. [Unof.], 449. If the liability in question is considered as creating a trust fund, to be administered by the receiver if there is one, or if none, by the court in a suit in equity, for the benefit of creditors generally, and not a relation of debtor and creditor between stockholders and creditor directly, these decisions are inevitable. Where there are many creditors, the trust fund must be administered in the general interest. Although some individuals might desire that every stockholder be required to pay the full sum for which he is holden, even if the litigation necessary to that end consumed the entire proceeds, the receiver, as trustee, and the court in supervising his acts as such, must consider the advantage of the creditors as a whole, and take such proceedings as will be likely to promote their interests; not forgetting that expedition and saving of expense are sometimes as much to be desired as holding each stockholder to his full duty. The general rule is that any trustee, acting in good faith, may compound a debt due to the trust estate. 2 Perry, Trusts, sec. 482. Compromises by executors, administrators and other trustees are provided for by statute. After this court had determined that said section 7 creates a trust fund, the construction of section 35, chapter 8, Compiled Statutes as authorizing a settlement of the stockholders’ liabilities, was a matter of course.
It seems proper to say, also, that while I concur in the opinion and conclusions of my Brother Oldham, I think *423this court ought to state clearly and emphatically, that compromises of this sort should be thoroughly investigated and maturely considered before they are authorized. This does not mean that undue delay or expense should be suffered by reason of factious opposition, desire to harass individuals claimed to be liable, or attempts to extort money. But the proceeding is undeniably capable of abuse, and it would be most unfortunate to permit any impression to go abroad that ill-considered or collusive compromises will .be tolerated.