Bleckley, Chief Justice.
The facts are stated in the official report. The judgment below was acquiesced in by the debtors, Peacock, Peterson & Co., the excepting parties being Stillwell, Milieu & Co. alone. In so far, therefore, as the granting of an injunction and the appointment of a receiver concern any property not conveyed by the former of those firms to the latter, the decision of the presiding judge, whether correct or incorrect, should not and could not be disturbed on this writ of error. What we shall rule will have relation only to the property embraced in the conveyance to which we have referred, leaving the individual property of the several persons composing the firm of Peacock, Peterson & Co., to be dealt with by the receiver as- though it alone had been the subject-matter of the receivership.
1. The petitioning creditors attack this conveyance as fraudulent. Giving the petition the widest possible range, it has three aspects. It rests, first, upon the insolvent traders’ act (Code, §3149a et seq.); secondly, upon the assignment act of 1881 (Acts 1880-81, p. 174, Code Addenda, §1953d p. x), as amended by the act of 1885 (Acts 1884-5, p. 100); and thirdly, upon the general law making void all conveyances intended to [141] hinder, delay or defraud creditors. If the evidence supports any one of these aspects of the petition, it is the last one. It does not support the first, because the partnership of Peacock, Peterson & Co. had been dissolved and had ceased to carry on the firm business before the petition was filed. In this respect the case is within the ruling on that subject in Kimbrell v. Walters, 86 Ga. 99, and previous cases therein cited. The evidence does not support the second aspect of the petition, because it shows, not an assignment, but an absolute conveyance made in payment of a pre-existing debt together with an undertaking by the purchasei’s, Stillwell, Millen & Co., to pay certain other debts, not out of the proceeds of the property, but absolutely as a part of the agreed price. Touching this element, the case is ruled by Powell v. Kelly, 82 Ga. 1. By a very decided preponderance of the evidence, the conveyance was made free from any trust, open or secret, in favor of the debtors or any creditor or any other person. It was an absolute and unconditional sale, and the only element of suspicion attaching to it results from apparent inadequacy of price. There is no doubt that the property covered by the conveyance, estimated at its noi-mal value, was very much in excess of the purchasing creditors’ debt and of the whole consideration expressed in the conveyance. Various facts are set up by Stillwell, Millen & Co. to account for and vindicate the transaction notwithstanding this excess, the principal fact being that much of the property embraced in the deed had not been paid for by Peacock, Peterson & Co., and was still subject to claims for its own purchase money. Conceding all the consequences that could be drawn from the excess of value over the price paid, the case is that of a conveyance by an insolvent partnership to one of the firm creditors at an rmdervaluation, made to hinder, delay or defeat the other firm creditors. What, then, [142] is the rule of law governing the grant of injunction and the appointment of a receiver as against such purchasing creditor, the attacking creditors being without judgments or other liens, and claiming no title to the property either by reason of fraud in procuring credit therefor in the creation of their demands or otherwise ? There can be no doubt that, generally, creditors complaining of a fraudulent conveyance of his property by their debtor are not entitled to an interlocutory injunction and receiver. The present case falls within this general rule, inasmuch as there is no allegation of the insolvency of the alleged fraudulent purchasers, Still-well, Millen & Co. The case of Mayer v. Wood, 56 Ga. 427, is a direct authority upon the subject, so far as an injunction is concerned ; and the principle of that case fairly carried out will extend also to the element of appointing a receiver. Where injunction to restrain a solvent purchaser from disposing of the property embraced in his fraudulent purchase would not be granted, we can see no reason why a receiver should be appointed. That the solvency of the purchaser would be security against ultimate loss by the attacking creditors in case they should establish their debts and prove the fraud, would stand as well for a reason against appointing an ad interim receiver as against granting an injunction. It is obvious that merely to enjoin a man temporarily from disposing of property to which he claims title is a milder interference with his dhmimon over it than to take it from him and put it in the hands of a receiver. Indeed, before the order granting an in-j unction in Mayer v. Wood was brought to this court for review, it had been so far modified, with consent of the parties, as to allow the fraudulent purchasers to sell the goods and hold up the proceeds, thus virtually converting them into receivers for that purpose. Nevertheless, the order itself, after this modification, was held erroneous.
Free access — add to your briefcase to read the full text and ask questions with AI
Bleckley, Chief Justice.
The facts are stated in the official report. The judgment below was acquiesced in by the debtors, Peacock, Peterson & Co., the excepting parties being Stillwell, Milieu & Co. alone. In so far, therefore, as the granting of an injunction and the appointment of a receiver concern any property not conveyed by the former of those firms to the latter, the decision of the presiding judge, whether correct or incorrect, should not and could not be disturbed on this writ of error. What we shall rule will have relation only to the property embraced in the conveyance to which we have referred, leaving the individual property of the several persons composing the firm of Peacock, Peterson & Co., to be dealt with by the receiver as- though it alone had been the subject-matter of the receivership.
1. The petitioning creditors attack this conveyance as fraudulent. Giving the petition the widest possible range, it has three aspects. It rests, first, upon the insolvent traders’ act (Code, §3149a et seq.); secondly, upon the assignment act of 1881 (Acts 1880-81, p. 174, Code Addenda, §1953d p. x), as amended by the act of 1885 (Acts 1884-5, p. 100); and thirdly, upon the general law making void all conveyances intended to [141] hinder, delay or defraud creditors. If the evidence supports any one of these aspects of the petition, it is the last one. It does not support the first, because the partnership of Peacock, Peterson & Co. had been dissolved and had ceased to carry on the firm business before the petition was filed. In this respect the case is within the ruling on that subject in Kimbrell v. Walters, 86 Ga. 99, and previous cases therein cited. The evidence does not support the second aspect of the petition, because it shows, not an assignment, but an absolute conveyance made in payment of a pre-existing debt together with an undertaking by the purchasei’s, Stillwell, Millen & Co., to pay certain other debts, not out of the proceeds of the property, but absolutely as a part of the agreed price. Touching this element, the case is ruled by Powell v. Kelly, 82 Ga. 1. By a very decided preponderance of the evidence, the conveyance was made free from any trust, open or secret, in favor of the debtors or any creditor or any other person. It was an absolute and unconditional sale, and the only element of suspicion attaching to it results from apparent inadequacy of price. There is no doubt that the property covered by the conveyance, estimated at its noi-mal value, was very much in excess of the purchasing creditors’ debt and of the whole consideration expressed in the conveyance. Various facts are set up by Stillwell, Millen & Co. to account for and vindicate the transaction notwithstanding this excess, the principal fact being that much of the property embraced in the deed had not been paid for by Peacock, Peterson & Co., and was still subject to claims for its own purchase money. Conceding all the consequences that could be drawn from the excess of value over the price paid, the case is that of a conveyance by an insolvent partnership to one of the firm creditors at an rmdervaluation, made to hinder, delay or defeat the other firm creditors. What, then, [142] is the rule of law governing the grant of injunction and the appointment of a receiver as against such purchasing creditor, the attacking creditors being without judgments or other liens, and claiming no title to the property either by reason of fraud in procuring credit therefor in the creation of their demands or otherwise ? There can be no doubt that, generally, creditors complaining of a fraudulent conveyance of his property by their debtor are not entitled to an interlocutory injunction and receiver. The present case falls within this general rule, inasmuch as there is no allegation of the insolvency of the alleged fraudulent purchasers, Still-well, Millen & Co. The case of Mayer v. Wood, 56 Ga. 427, is a direct authority upon the subject, so far as an injunction is concerned ; and the principle of that case fairly carried out will extend also to the element of appointing a receiver. Where injunction to restrain a solvent purchaser from disposing of the property embraced in his fraudulent purchase would not be granted, we can see no reason why a receiver should be appointed. That the solvency of the purchaser would be security against ultimate loss by the attacking creditors in case they should establish their debts and prove the fraud, would stand as well for a reason against appointing an ad interim receiver as against granting an injunction. It is obvious that merely to enjoin a man temporarily from disposing of property to which he claims title is a milder interference with his dhmimon over it than to take it from him and put it in the hands of a receiver. Indeed, before the order granting an in-j unction in Mayer v. Wood was brought to this court for review, it had been so far modified, with consent of the parties, as to allow the fraudulent purchasers to sell the goods and hold up the proceeds, thus virtually converting them into receivers for that purpose. Nevertheless, the order itself, after this modification, was held erroneous.
[143] Tested by tbe ease cited and by tbe main current of the authorities, we are of opinion that no receiver for the property purchased by Stillwell, Millen & Co. should have been appointed. And we are clear that the discretion of the judge was not well exercised in appointing such receiver absolutely and unconditionally, without offering Stillwell, Millen & Co. the alternative of giving bond and security either for the forthcoming of the property, or for the eventual condemnation money in this cause. The property consisted partly of real estate, which could not disappear, partly of a sawmill and fixtures, and partly of a large number of animals used in connection therewith. These animals would be expensive to keep in the hands of a receiver. They would have to be sold speedily, or else the receiver would have to operate the saw-mill at a heavy daily expense, and under many hazards of loss. In the exercise of a wise judicial discretion, it could not be otherwise than desirable, in behalf of the interest of all parties concerned, to keep such property out of the hands of a receiver; and if that could he done by exacting bond and security, this exaction ought to have been made, and opportunity afforded to comply with it. In Cohen v. Meyers, 42 Ga. 46, the receiver was appointed ex parte, but on hearing the matter after answer, the chancellor recognized as a basis for discharging the receiver the alternative of giving bond and security for the payment of any recovery which might be had in the case. It may he asserted as a general proposition that a bond with good security is always a better form of protecting creditors likely to be injured, by fraud than the appointment of a receiver for property perishable in its nature or expensive to keep. And in most cases the liability of a solvent party without bond and security would itself he preferable to an expensive receivership. The answer of Stillwell, Millen & Co. [144] alleged that they were solvent and fully able to respond. This was not contradicted by any evidence or by any allegation in the petition. By no disposition or misappropriation of the property pending suit against them to set the conveyance aside could they evade their responsibility to the plaintiffs for any fraud complained of in the petition, should that fraud be established at the final trial of the cause. Being solvent, they are virtually sureties tp the petitioning creditors for the forthcoming of the property should the conveyance be set aside, or for its value in excess of their own debt and the residue of the price at which they purchased it.
2. It developed in argument at the bar that the case of DeLacy v. Hurst, 83 Ga. 223, was susceptible of being misunderstood by learned counsel. That case holds that in one and the same suit creditors may proceed for judgment on their debts, and to set aside fraudulent conveyances ; but it nowhere suggests that an ad interim injunction or receiver can be had in any 'Case in which the like extraordinary remedy could not be invoked prior to the passage of the uniformity procedure act of 1887. On the contrary, in the statement of facts with which the opinion in that case opens, it is said: “ The trial judge refused to grant the injunction or to appoint a receiver.” This refusal was acquiesced in, and consequently the element of injunction and receiver had been eliminated from the case before it reached this court. We adhere to the decision in DeLacy v. Hurst, but cannot apply it to this case at its present stage further than to hold that the creditors attacking this conveyance are recti in curia as to the ultimate purposes of their action, these purposes being to establish their claims against Peacock, Peterson & Co. and set aside an alleged fraudulent conveyance made by them to their codefendants, Stillwell, Millen & Co.
The judge erred in granting an injunction aas to Still-[145] well, Millen & Go.; in appointing a receiver for the property embraced in the conveyance to them, and in ordering a sale of that property by the. receiver.
Judgment reversed.