Davis v. Williams

87 S.E. 1050, 144 Ga. 637, 1916 Ga. LEXIS 59

• Court: Supreme Court of Georgia
• Decided: January 15, 1916
• Status: Published

Opinion

Buck, J.

(After stating the foregoing facts.)

1. Motion was made to dismiss this case, on the ground that there is no sufficient assignment of error. The assignment of error is in the following language: After hearing the evidence in said case and the arguments of counsel, the judge “rendered a ruling and judgment denying the petition of the said Joseph S. Davis, petitioner; to which ruling and judgment the petitioner then and’ there excepted, now excepts, and assigns the same as error.55 Considering the nature of the petition and the issue made by it and the answer, this was a sufficient assignment of error. Anderson v. Newton, 123 Ga. 513 (51 S. E. 508). The motion to dismiss the writ of error is overruled.

2. We are of the opinion that the court erred in denying the application for ah order requiring the receiver appointed by the State court to deliver the insurance policies in controversy to the applicant, the receiver of the United States court. It will be observed that the receiver appointed by the State court contends that he is entitled to have possession of and collect the insurance policies, on the ground that when these policies are collected the proceeds will be trust funds, and that they would have been trust funds had they been collected by the assured, Farmers and Merchants Warehouse Co., or by J. W. Coleman, who used the name of that company as a trade-name, he being the sole owner of the business, or, as he expressed it in his uncontroverted testimony, “the sole member of that firm.55 And he not only insists that the proceeds of this fund would have been trust funds in the hands of Coleman if he had collected them, but that they would have been trust funds to 'protect W. J. Perkins and others and parties “similarly situated as they are;” that is, all parties who were owners of cotton in the warehouse and holding receipts issued by the warehouse company, marked “Insured.” Conceding that if Coleman had collected the policies .the proceeds would have constituted a trust fund in his hands, it by no means' follows that it would have been a trust fund solely for “Perkins and others similarly sitauted,” — that is, parties who held receipts issued by the warehouse company, marked “Insured.” Merely marking upon a receipt given for cotton deposited in a warehouse the word “Insured” did not of itself constitute either a contract of insurance or a contract to insure the cotton. Zorn v. Hannah, 106 Ga. 61 (31 S. E. 797). But we do not pass upon this question here; we merely remark that it is a question involved in the case and one that can be settled in the court having jurisdiction when passing upon the priorities of the claims of all the parties.

But apparently, if the proceeds of the insurance policies are trust funds, they are such because of the clause in those instruments which stipulate that they cover “cotton in bales, of their own, or held by them in trust, or on commission, or on joint account.with others, or sold but not delivered, while contained in Farmers and Merchants Warehouse;” but that clause is as much for the benefit of one class of holders of receipts for cotton deposited as for the members of that class which took receipts marked “Insured.” The receiver of the State court, having been appointed upon the theory that the policies of insurance were issued for the sole purpose of protecting cotton stored in the warehouse and belonging to parties who held receipts marked “Insured,” is asserting the claim of those parties; and his claim to the right to have possession of the policies of insurance and to collect them is based upon that theory — a theory which excludes owners of cotton stored in the warehouse but who do not hold receipts marked “Insured.” But the receiver of the United States court was appointed by a court which had first taken jurisdiction of the bankrupt’s estate; and he can administer the entire estate, the proceeds of the policies and any other estate that the bankrupt may have. We say he was appointed by a court which had first taken jurisdiction of the bankrupt’s estate. We get this from the allegations in his petition, admitted by the answer of the defendants. It is alleged in the petition, that on the first day of December, 1914, Boyd and others filed a petition in the United States District Court-for the Southern District of Georgia against Farmers and Merchants Warehouse Company and J. W. Coleman, praying that they be declared bankrupt. On the 2d day of December, 1914, Boyd and his coplaintiffs filed a petition in the United States court, praying that a receiver be appointed to take charge-of and hold all of the assets of every kind and character of J. W. Coleman and the Farmers and Merchants Warehouse Company, the latter being merely a trade-name used by J. W. Coleman, he being “the sole proprietor thereof.” The United States judge of that division being absent, the same was certified to the referee in bankruptcy for that division; and he, on the date last stated, passed an order requiring Coleman to appear before him on December 4, 1914, and show cause why a receiver should not be appointed as prayed, and also at the same time restrained and enjoined both parties from changing or altering the status of their property and assets until the further order of the court. On the 4th day of December Coleman appeared before the referee in bankruptcy and moved for a continuance of the hearing of the application for receiver; and it was continued to the 12th day of December, 1914, the restraining order previously granted being continued in force. These insurance policies were then in the possession of Coleman, and rightfully in his possession; he had legal title to them. And whether or not the proceeds of the policies, when collected, could be impressed with a trust in favor of all the owners of cotton which was stored in the warehouse, or any one class of such owners of cotton, or whether the proceeds of the policies would be assets for the payment of creditors generally, the creditors moving in the bankrupt court had started proceedings in that court which caused it to first take jurisdiction of the entire estate of Coleman, a part of which was these policies; and they are asserting a right to the proceeds of the policies. And the mere fact that before the actual appointment of a receiver in the Federal court the State court had appointed a receiver, the defendant in error here, did not oust the Federal court of jurisdiction of the bankrupt’s estate. And when Coleman, although restrained by the bankrupt court from altering the status of his assets, delivered the policies to the receiver of the State court, he did so wrongfully, as he violated the restraining order just referred to. We are therefore of the opinion that the court below should not-have refused the petition of the United States court receiver for an order requiring the delivery by the State court receiver of the policies of insurance.

If there are any priorities among the claims upon the funds which shall arise from the collection of the policies, these priorities can be determined in the United States court; and if the funds are -impressed with a trust in favor of owners of cotton stored in the warehouse, the beneficiaries of the trust can assert their right in that tribunal and have them allowed there.

Judgment reversed.

All the Justices concur, except Fish, G. J., absent, and Lumpkin and Atkinson, JJ., dissenting.