Mr. Justice Clabk
delivered the opinion of the court,
An attachment execution will not lie for a demand founded in tort, as for the detention of chattels ; it can only be sustained for a debt arising from contract expressed or implied : Boyer v. Bullard, 40 Leg. Int. 302. But where there is a conversion, there is an implied sale, and, waiving the tort, an action of assumpsit for goods sold and delivered can be maintained upon the contract implied ; the value is regarded as “a debt' due ” within the meaning of the 35th section of the Act of June 16th 1836 : Bethlehem v. Perseverance Fire Co., 31 P. F. Smith 445. It is equally clear that a sum deposited for a certain use, if not so used, is “ a debt due ” to the depositor.
If, therefore, in point of fact, there was such a fund in the hands of Aaron Balliet, as was alleged, whether it be considered as the value of goods wrongfully converted, ora sum remaining upon deposit, under the circumstances stated it would be liable to attachment in his hands in the form of proceeding here pursued.
But in the ascertainment of the fact whether there was such a fund in the hands of the garnishee, we think the court fell into error.
The jury having found for the plaintiff, we are obliged to assume, let the fact be as it may, that the $5,190, paid by the Lehigh Iron Company to Aaron Balliet, prior to the sheriff’s sale of the company’s personal property, was not paid on his indemnifying judgment of $50,000, but was deposited with him, to buy in the property at the sale.
The property, having been purchased by Balliet, at the sale, on the 80th January 1879, with the company’s money, for the company’s use, was the company’s property, and Avas liable to execution for the company’s debts after the sale as before. The possession was undisturbed, the property remaining with the company.
Balliet, however,-assumed the ownership, and the company, by its agents, directors and managers, recognized his right; even the stockholders, in their meeting, treated the property as belonging to Balliet, and made the transfer of it by Balliet the basis of the proposed reorganization.
This transfer was made and the property delivered to the new organization known as the Coplay Iron Co. Limited, two weeks or more before the service of the AA’rit of attachment in this case.
The court below states in the general charge: “ It is asserted [552]*552on both sides, and all the evidence is to that effect, that before this attachment was served on Aaron Balliet (the service was on the 17th July 1879) he parted with the possession of this property, and transferred it to the Coplay Iron Co. Limited.” The transfer would appear to have been pursuant to negotiations for a reorganization which began among the stockholders and creditors of the Lehigh Yalley Iron Co. in the month of March 1879, of which negotiations all the stockholders and creditors had notice, and in which a large majority joined'; it would appear also to have been made openly and after due deliberation of all persons in interest.
It appears in the evidence that on the 81st March 1879, a circular letter signed by a committee of the director's of the Lehigh Yalley Iron Company, was addressed to the stockholders and creditors of the company calling a special joint meeting, to take action thereon at the American Hotel in Allentown, April 15th 1879, stating briefly the basis of the proposed reorganization.
In this circular letter it is stated that: “ Arrangements have been made with Mr. Aaron Balliet, the purchaser of the real and personal property of the Lehigh Yalley Iron Company, to transfer the same at cost to the stockholders and creditors of said company, if they will raise sufficient funds to lift the pledged bonds, or so many of said bonds as may be found necessary to lift, by subscribing for and taking at par the 6 per cent, first mortgage bonds of said company.” And also, that it was necessary “ for all stockholders who wished to have any interest in the reorganized company to be either present in person or represented by some one authorized to act for them.”
In pursuance of the circular call, at the time and place designated, a meeting was held, at which three-fourths of the stock, and about the same proportion of the unsecured business debts were represented; the plaintiff in this attachment was also present, and after full consideration the proposition or suggestion submitted by the committee of the directors, was •adopted, and the same committee were directed to “ issue an ■explanatory circular requesting each stockholder and creditor, ito express their willingness or unwillingness to join in the reorganization as proposed.”
The meeting then adjourned to meet at the same place, on the 25th April, then next ensuing.
This “ explanatory circular ” contained a particular statement of the terms of the reorganization, of the financial condition of the company, the proposition submitted to the stockholders and creditors for reorganization, and a notice for the •adjourned meeting. The same circular also contains the following :
[553]*553“ It was stated in the previous circular, that arrangements had been made with Mr. Aaron Balliet, the purchaser of the real and personal property of the company, to transfer the same at cost, to the stockholders and creditors of said company, if sufficient funds are raised to lift the pledged bonds, or so many of said bonds as it may be found necessary to redeem.”
A supplemental circular letter, more particularly detailing the basis of the reorganization, was subsequently forwarded to all parties interested, in which the whole scheme, apparently, was fully developed.
On the 25th of April 1879, such proceedings were had, that a paper was prepared for subscription to the bonds of the Lehigh Valley Iron Go., on the terms of the proposed reorganization and upon the basis and plan adopted at the meeting of April 15th 1879, providing for the unsecured creditors as contemplated according to that plan. In this paper it was, inter alia, stipulated as follows:
“ This subscription is not to be binding, unless satisfactory arrangements are made for the reorganization of the company, and the transfer of the real and personal property, late of the said Lehigh Valley Iron Company, to the reorganized company.”
Upon this paper the present plaintiffs, S. A. Brown & Bro., as creditors, subscribed for bonds to the amount of $1,750.
Other meetings were subsequently held; the scheme for reorganization was finally perfected, and on the 1st day of July 1879, the property purchased by Balliet at the sheriff’s sale was formally transferred to the Coplay Iron Co., the new organization, and was delivered accordingly.
Tin's transfer, and the entire scheme of reorganization, was effected by and with full sanction and authority of the directors of the Lehigh Valley Iron Co.; although it appears that the plaintiffs, one of the creditors, withdrew from the subscriptions they had made, and did not enter into the organization of the Coplay Iron Co., as they had agreed.
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Mr. Justice Clabk
delivered the opinion of the court,
An attachment execution will not lie for a demand founded in tort, as for the detention of chattels ; it can only be sustained for a debt arising from contract expressed or implied : Boyer v. Bullard, 40 Leg. Int. 302. But where there is a conversion, there is an implied sale, and, waiving the tort, an action of assumpsit for goods sold and delivered can be maintained upon the contract implied ; the value is regarded as “a debt' due ” within the meaning of the 35th section of the Act of June 16th 1836 : Bethlehem v. Perseverance Fire Co., 31 P. F. Smith 445. It is equally clear that a sum deposited for a certain use, if not so used, is “ a debt due ” to the depositor.
If, therefore, in point of fact, there was such a fund in the hands of Aaron Balliet, as was alleged, whether it be considered as the value of goods wrongfully converted, ora sum remaining upon deposit, under the circumstances stated it would be liable to attachment in his hands in the form of proceeding here pursued.
But in the ascertainment of the fact whether there was such a fund in the hands of the garnishee, we think the court fell into error.
The jury having found for the plaintiff, we are obliged to assume, let the fact be as it may, that the $5,190, paid by the Lehigh Iron Company to Aaron Balliet, prior to the sheriff’s sale of the company’s personal property, was not paid on his indemnifying judgment of $50,000, but was deposited with him, to buy in the property at the sale.
The property, having been purchased by Balliet, at the sale, on the 80th January 1879, with the company’s money, for the company’s use, was the company’s property, and Avas liable to execution for the company’s debts after the sale as before. The possession was undisturbed, the property remaining with the company.
Balliet, however,-assumed the ownership, and the company, by its agents, directors and managers, recognized his right; even the stockholders, in their meeting, treated the property as belonging to Balliet, and made the transfer of it by Balliet the basis of the proposed reorganization.
This transfer was made and the property delivered to the new organization known as the Coplay Iron Co. Limited, two weeks or more before the service of the AA’rit of attachment in this case.
The court below states in the general charge: “ It is asserted [552]*552on both sides, and all the evidence is to that effect, that before this attachment was served on Aaron Balliet (the service was on the 17th July 1879) he parted with the possession of this property, and transferred it to the Coplay Iron Co. Limited.” The transfer would appear to have been pursuant to negotiations for a reorganization which began among the stockholders and creditors of the Lehigh Yalley Iron Co. in the month of March 1879, of which negotiations all the stockholders and creditors had notice, and in which a large majority joined'; it would appear also to have been made openly and after due deliberation of all persons in interest.
It appears in the evidence that on the 81st March 1879, a circular letter signed by a committee of the director's of the Lehigh Yalley Iron Company, was addressed to the stockholders and creditors of the company calling a special joint meeting, to take action thereon at the American Hotel in Allentown, April 15th 1879, stating briefly the basis of the proposed reorganization.
In this circular letter it is stated that: “ Arrangements have been made with Mr. Aaron Balliet, the purchaser of the real and personal property of the Lehigh Yalley Iron Company, to transfer the same at cost to the stockholders and creditors of said company, if they will raise sufficient funds to lift the pledged bonds, or so many of said bonds as may be found necessary to lift, by subscribing for and taking at par the 6 per cent, first mortgage bonds of said company.” And also, that it was necessary “ for all stockholders who wished to have any interest in the reorganized company to be either present in person or represented by some one authorized to act for them.”
In pursuance of the circular call, at the time and place designated, a meeting was held, at which three-fourths of the stock, and about the same proportion of the unsecured business debts were represented; the plaintiff in this attachment was also present, and after full consideration the proposition or suggestion submitted by the committee of the directors, was •adopted, and the same committee were directed to “ issue an ■explanatory circular requesting each stockholder and creditor, ito express their willingness or unwillingness to join in the reorganization as proposed.”
The meeting then adjourned to meet at the same place, on the 25th April, then next ensuing.
This “ explanatory circular ” contained a particular statement of the terms of the reorganization, of the financial condition of the company, the proposition submitted to the stockholders and creditors for reorganization, and a notice for the •adjourned meeting. The same circular also contains the following :
[553]*553“ It was stated in the previous circular, that arrangements had been made with Mr. Aaron Balliet, the purchaser of the real and personal property of the company, to transfer the same at cost, to the stockholders and creditors of said company, if sufficient funds are raised to lift the pledged bonds, or so many of said bonds as it may be found necessary to redeem.”
A supplemental circular letter, more particularly detailing the basis of the reorganization, was subsequently forwarded to all parties interested, in which the whole scheme, apparently, was fully developed.
On the 25th of April 1879, such proceedings were had, that a paper was prepared for subscription to the bonds of the Lehigh Valley Iron Go., on the terms of the proposed reorganization and upon the basis and plan adopted at the meeting of April 15th 1879, providing for the unsecured creditors as contemplated according to that plan. In this paper it was, inter alia, stipulated as follows:
“ This subscription is not to be binding, unless satisfactory arrangements are made for the reorganization of the company, and the transfer of the real and personal property, late of the said Lehigh Valley Iron Company, to the reorganized company.”
Upon this paper the present plaintiffs, S. A. Brown & Bro., as creditors, subscribed for bonds to the amount of $1,750.
Other meetings were subsequently held; the scheme for reorganization was finally perfected, and on the 1st day of July 1879, the property purchased by Balliet at the sheriff’s sale was formally transferred to the Coplay Iron Co., the new organization, and was delivered accordingly.
Tin's transfer, and the entire scheme of reorganization, was effected by and with full sanction and authority of the directors of the Lehigh Valley Iron Co.; although it appears that the plaintiffs, one of the creditors, withdrew from the subscriptions they had made, and did not enter into the organization of the Coplay Iron Co., as they had agreed. Now, if these facts which appear in the testimony are true, and the transaction was unaffected by fraud, we think that as Aaron Balliet had parted with the property, in good faith, with the approval of the board of directors of the Lehigh Valley Iron Co., he could not in any sense be held as a garnishee, either for the property or the value of it, as he had neither the property nor the value of it, in his hands at the time of the service of the writ of attachment upon him. He held the personal property as a trustee for the company, and the transfer of it was with the company’s consent.
It would appear that he received nothing from the Coplay Iron Co. for the property, more than any other creditor received upon entering into the new organization; he simply turned thó [554]*554property over upon the footing of the arrangement which the plaintiffs and others of the creditors and stockholders had effected, and which appears to have been open and free for all.
S. A. Brown & Bro. were of course not obliged to enter into the scheme of reorganization; they might, by issuing execution,-have seized the property in Balliet’s hands; they had a right to rely upon their rights as creditors, but they did not; on the contrary, they appear to have encouraged the reorganization based upon the transfer subsequently made.
It is objected,'however, that the “directors of a corporation are its agents, with limited power, having authority to do everything that is needful and proper to carry on its business ; to conduct its affairs in furtherance of the end of its institution, and for these purposes to control its property and assets. They have no right, without the sanction of the stockholders, to wind up the corporation, to destroy its business or to deprive it of property essentially necessary to carry out the purposes for which the company was organized.”
It is certainly true, that the directors of a corporation have no right to sell or dispose of its movable property where this prevents the continuance of their business ; such a sale made by them is void as against non-assenting stockholders. But, if the stockholders are silent, make no objection whatever, by their acquiescence they will be taken as assenting. This proceeding is not by a stockholder, but by a stranger. How can creditors complain, if the stockholders are consenting to the negotiations ?
The creditor has a right to enforce collection of his debt and resort to all the remedies which the law allows to that end, but corporations or partnerships cannot be obliged by their creditors to continue in business.
We think, therefore, that the court erred in instructing the jury, that if they should find this purchase at the sheriff’s sale was with the money of the company, the plaintiff in the attachment should recover against Balliet the value of the goods he so purchased and disposed of, and that this was the only issue of fact in the cause.
If the property was so purchased with the money of the company, it was, it is true, the company’s property; but if, with the company’s consent, without fraud and without special advantage over others similarly situated, he transferred the property to the Coplay Iron Co., pursuant to a plan of reorganization which was open and free, how can he, Balliet, be held as garnishee for moneys and effects which were thus admittedly not in his hands at the service of the writ ?
The question of fact submitted to the jury was not, therefore, the only question for their consideration.
[555]*555If the property or money had • been found in Balliet’s hands, the case might have been altogether different; but he had neither, and it is not pretended that there was either fraud or unfair dealing.
We are also of opinion that it was irrelevant matter whether or not the banks accepted the transfer of the judgment made on 7th July 1879, or exercised any acts of ownership over it whatever.
It was the right of the indorsers to protection in this form, not only as against the company, hut as against each other, and the bank, without any assignment, had the right to avail themselves of the security thus afforded.
It follows, therefore, that the 2d, 4th, 10th, 11th, 13th, 14th and 15th errors are sustained, and the remaining assignments are dismissed.
Judgment reversed and venire facias de novo awarded.