Fouche, assignee, vs. Brower.

There was other evidence as to the solvency, safety and business standing of Frost & Panchen and of Frost, Samuel & Co., which was in some degree conflicting. On behalf of the complainant, there was testimony that the parties were not safe and careful in their management; that the firm of Frost & Panchen at one time had trouble about their exchange; that the affairs of the bank were recklessly managed; that the bank is now insolvent; and that an effort to realize out of Frost has proved futile; while, on behalf of the defendant, Panchen testified that at the time of the transfer from Brower, he considered that Frost, Samuel & Co. were solvent, and that the bank was solvent, and remained so until March, 1881, when the failure of Gowan & Samuel to meet their obligations caused it to fail. The bank became a state depository in November, 1879. It failed in March, 1881, owing from $150,000.00 to $200,000.00, and with assets not above $40,000.00. Brower testified that the bank did a large business, but in about six months after the transfer, he thought it unsafe. The jury found for the defendant. Complainant moved for a new trial, on the following grounds:

(1.) Because the verdict is against the evidence, is against the weight of the evidence, and is without evidence to support it.

(2.) Because the verdict is contrary to law, and is contrary to the principles of justice and equity.

(3.) Because the court refused the following charge: "A stockholder has no right to withdraw from a corporation any of its capital stock until the corporation is legally dissolved."

(4.) Because the court refused the following charge: "If the defendant sold all the stock of the Bank of Rome to Frost, Samuel & Co., they, Frost, Samuel & Co., owed Brower for it; and Brower had no right, after the sale, to retain the assets of the bank, and if he did so, and the bank has since become insolvent, then the assignee would

Touche, assignee, vs. Brower.

have the right to recover of Brower such assets or their value."

(5.) Because the court charged as follows: "If it was agreed upon that the transfer of the stock and charter should only carry the naked stock and charter, and that the assets should not go with the stock and charter, then the assets would not pass with the transfer of the stock and charter."

(6.) Because the court charged as follows: "If the object and intent of Frost, Samuel & Co., in taking the transfer of the stock, was to defraud such creditors as they might thereafter have, and if they were then insolvent, and did not intend to replace the stock at the time they took it, and have not done it, and if Brower knew all this at the time, and he made such transfer to enable Frost, Samuel & Co. to commit such a fraud, he would be liable for any loss occasioned by such conduct, in a proper suit for its recovery, but would not be liable in this case on this ground."

(7.) Because the court charged as follows: "If Frost, Samuel & Co. replaced in the new organization stock of equal value with the assets retained by Brower, then the plaintiff could not recover on account of any alleged withholding or withdrawal of any assets of the old organization, or on account of the transfer of the naked stock alone."

(8.) Because the court charged as follows: If Brower was sole owner of all the stock of the old organization, he was then the sole owner of all its property of every kind."

(9.) Because the court charged as follows: "If Brower was not interested in the new organization, and if he was the sole owner of all the stock and assets of the old organization, and closed out its business and paid its existing debts at the time he closed out its business, or afterwards, and quit business; and if, after selling the bank building to Frost, Samuel & Co., he made them a gift of the bank

Fouche, assignee, vs. Brower.

charter in good faith, and with no intent to defraud the public, receiving no consideration for it, and if the sole object of transferring the stock of the old organization to Frost, Samuel & Co. was to transfer the charter of the bank to them, and if, after it was transferred to them, they re-organized the bank, and were charged on their books with the $50,000.00 capital stock-divided it out among themselves, Samuel taking ten thousand, Frost twenty-two thousand five hundred dollars, De son five thousand, and Frost, Samuel & Co. the balance, and if they paid up such stock in money in part and gave their notes for the balance of it, and if the assets of the old organization were retained by Brower by the contract of the parties, and were not to be, and were not in fact transferred and delivered to Frost, Samuel & Co., then the plaintiff could not recover, whether the effect of such an arrangement was to transfer the charter or not."

(10.) Because the court charged as follows: "If Brower owned the stock of the old organization, and also its assets, and had closed out its business and paid its debts, and if he transferred the stock alone without the assets to Frost, Samuel & Co. in good faith, and with no intent to defraud the public, and Frost, Samuel & Co. re-subscribed the stock and put into the bank a new banking capital, then if Brower advertised such sale of his stock once a month for six months after such transfer, and immediately thereafter, in two newspapers in or near the place where the bank kept its principal office, then the plaintiff would not be entitled to recover."

(11.) Because the court charged as follows: "The assignee only acquired the property and rights of the assignor, and you will look into the evidence and see who the assignor was, whether it was the old organization at the time Brower owned the bank, or whether it was the new organization If it was the new organization, then Mr. Fouché, the assignee to whom they have conveyed all their property and all their rights, would have

Fouche, assignce, vs. Brower.

no more right to sue than they would, and unless they could recover in a suit in this court against Brower, he could not recover; and I charge you that the new organization in such case would have no right, if Brower had only conveyed the naked stock and charter to them, to sue Prower for their assets."

(12.) Because the court allowed the witness, Brower, to testify as follows: "Colonel Samuel said to me that they had rather do business under a charter, but said, as this one would be of no further use to me, as I was going out of business, he would like for me to transfer it to him. He represented to me that he was going to do a large business would bring in stronger men and do a larger buiness than we had done. I told him I would submit it to my attorney, Colonel Alexander, and he told me I could do it. He said the proper and legal way was to transfer all the stock to this concern and receive it back, although it never was to go to them, and all that I did in that transaction, and all that I intended to do, and all that was agreed upon between me and Colonel Samuel, was to sell the bank building and furniture."-Objected to by complainant's counsel, upon the ground that it was hearsay evidence, and because it was parol testimony in contradiction of a contract which was in writing.

(13.) Because the court allowed the witness, Alexander, to testify as follows: "When he (Brower) was winding up the business of the concern, he consulted me about the business, and the purpose and object was to transfer to Frost, Samuel & Co. the charter of the Bank of Rome, in order that they might go on and do the business of the Bank of Rome. For the purpose of effecting the transfer, I wrote the transfer in this form; and in effecting the ob ject which was in view, I wrote the paper effecting the transfer, which was the transfer of the charter of the concern. That seemed to be agreeable to Brower. It was certainly what Samuel wanted; and there seemed to be

Fouche, assignee, vs. Brower.

no trouble, and it was done simply in order to effect it."The objection was that the contract was in writing.

The motion was overruled, and complainant excepted.

DABNEY & FOUCHE, for plaintiff in error.

ALEXANDER & WRIGHT; C. N. FEATHERSTON; W. W. BROOKS, for defendant.

HALL, Justice.

Has the complainant in this bill, who, by appointment of the court of equity, succeeds the original assignee named under a voluntary assignment made by the Bank of Rome, a right to maintain this suit, either under the terms of that assignment or by virtue of any provision of law, against the defendant, on account of a collusive arrangement charged to have been entered into between him and those to whom he sold the bank, and who afterwards re-organized it as its stockholders, directors and other officers, whereby the creditors and others dealing with the corporation were alleged to have been defrauded and injured? The question for our consideration is, not whether the creditors of this insolvent corporation can maintain a suit against this defendant for his participation in this alleged fraud, which it is insisted has resulted in loss and injury to them, but whether its voluntary assignee has authority to institute and carry on such a suit for their benefit.

1. As to this right of creditors against this defendant, we express no opinion, further than to say that courts will always lend them aid as a favored class, and will afford them every facility and remedy to detect, defeat and annul every effort to defraud them of their just rights. Code, §1945. But were this a suit at their instance, to accomplish this object, we would not be able, on account of the defective frame of the bill, to afford the remedy sought. It sets out neither the character and nature of their respective claims, the amounts thereof, nor the circumstances under