Court Opinion

ID: 7055567
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:05:50.858178+00
Date Added: 2024-06-11T16:11:41.523421
License: Public Domain

On Petition for Rehearing.
Per Curiam.
10. 11. It is not ground for a rehearing that this court erroneously took jurisdiction by transfer of a ease decided by the Appellate Court. Kraus v. Lehman (1908), ante, 408. We may say, however, that we did not order a transfer on the ground that the Appellate Court disregarded its rules in respect to the filing of briefs. We ordered a transfer, for the reason that the decision of the Appellate Court directly involved a new question of law which was decided erroneously, and, we may also add, that said decision in principle contravened Gainey v. Gilson (1897), 149 Ind. 58, American Trust, etc., Bank v. McGettigan (1899), 152 Ind. 582, 71 Am. St. 345, Ellison v. Ganiard (1906), 167. Ind. 471, and perhaps other cases of this court.
*7016. *700Appellant’s counsel assert as ground for a rehearing that this court has misconstrued and misstated the record. This, *701we take it, from the subsequent argument, is based on the fact that we asserted that in the reply appellant had shifted its ground. That the complaint was based on the right of the corporation, or, in other words, was on behalf of all who might be creditors thereof, is apparent from the portions of the complaint set forth in the opinion. It may be true that the reply does not state that there were different classes of creditors, but it does not deny the fraud alleged in the answer, and relies upon the fact that there are creditors of the corporation who became such after the making of the subscription, and upon the strength thereof. This is a shifting of ground. If there had been a recovery under the complaint, the money thus recovered would have gone to augment the dividend of any possible creditor of the corporation who had a general claim against it, whether his claim had been filed when this suit was commenced or not, while if there had been a recovery under the reply, the money so received would not have been an asset of the corporation, but would have belonged to particular creditors, on the theory that as between them and the defendant he was estopped to deny the validity of his subscription.
There certainly must be some distinction between prior and subsequent creditors in such a case as this. It will not do to assert that, because of the existence of one or many of the latter class of creditors, the whole subscription must be paid in, with the result that prior creditors who were not misled would share therein in the making of the distribution. Such a holding would be in utter disregard of the principles of estoppel and of justice as respects such creditors.
The receiver cannot represent subsequent creditors on ground of estoppel, for their interests and his are opposed to each other. His claim must be founded on the theory that the subscription belonged to the corporation, and therefore is a part of the general assets; theirs must rest on *702the ground that, to the extent necessary to produce assets to pay their claims, they have an equity that authorizes them to insist that the defendant, having been silent, shall not be heard to speak; and their equity is such that it would be incompetent to deprive them of any part of the money thus produced, if necessary to pay 'their debts, by requiring them to divide with creditors who have no equity. It is a mistake to assume that we rest our decision upon Republic Life Ins. Co. v. Swigert (1890), 135 Ill. 150, 25 N. E. 680, 12 L. R. A. 328, since the cases before cited in this opinion, as well as Curtis v. Leavitt (1857), 15 N. Y. 1, and High, Receivers (3d ed.), §§315, 316, contribute almost equally to the result.
We did not hold generally that a receiver cannot represent different classes of creditors or claims. What we did hold was that, in an action on a stock subscription, the receiver must base his right on the title of the corporation, and that it is incompetent for a court in such a case to charge him with the further duty of representing creditors whose rights are personal and antagonistic to his.
In the remedy suggested in the principal opinion we perceive none of the serious difficulties which appellant’s counsel apprehend; on the other hand, to permit a recovery by the receiver, by permitting him to assert any and all equities which certain creditors may possess, is to assert that the equity of the defendant is to be disregarded in favor of some who have no equity, and that creditors who have superior equities may be compelled to prorate with creditors who have no standing to complain, since, if the receiver recovers, the fund arising from the litigation will pass into his hands with equities that are undistinguished and undistinguishable. The only true view in such a case as this is that the receiver is the adversary of those who seek to avail themselves of subscriptions on the sole ground of the corporation’s ostensible proprietorship of such subscriptions, without claiming that it was in law the owner thereof. The *703rule we lay clown does not depend upon the accidental circumstance as to whether there is more than one class of creditors in the particular case. It is the general principle, stated by Judge High, which we assert, that for the purposes of litigation the receiver, except as to transactions by the corporation in fraud of creditors, takes only the title of the corporation. High, Eeceivers (3d ed.), §315.
12. As to questions not decided by the principal opinion, it must be remembered that appellant is the moving party, and, if it would secure a reversal, it must comply with the court’s rules. Kraus v. Lehman, supra; Pittsburgh, etc., R. Co. v. Lightheiser (1907), 168 Ind. 438. This it did not do. The rule invoked by counsel is applicable to appellee, and is not available to the moving party, except in rare cases where some reason which is superior to the right of the individual litigant demands that there should be a reversal. Kraus v. Lehman, supra; Scott v. City of Laporte (1904), 162 Ind. 34.
We have carefully considered all questions raised in the petition for rehearing, and perceive no ground for granting the same.
The petition is overruled. All concur, except Montgomery; J., not participating.