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tended this principle so far as to hold that the property of a foreign corporation, situated within the domestic jurisdiction, cannot be seized by attachment by its creditors, after the appointment of a receiver or other judicial assignee for the purpose of a general administration in the foreign jurisdiction;' though, as we have already seen, many States refuse to extend their comity so far.'
§ 7795. Attaching Creditors Entitled to Preference in Distribution. —Unless there is a statute, such as the late bankruptcy law, dissolving previous attachments and vacating the liens thereof, the lien of a valid levy, and the preference thereby acquired, are preserved when thereafter the property passes into the hands of a court of equity by its receiver, or into the hands of any other assignee or liquidator, private or official, for the purposes of a general liquidation; and the attaching creditors will obtain preferences according to their respective priorities as established by the date of their respective levies. This principle, which is well understood by the profession, was clearly stated by Mr. Justice Bailey in a modern case: "The mere insolvency of a corporation cannot have the effect of depriving creditors of their legal remedies, but they are at liberty, notwithstanding the insolvency, to sue the corporation in an action at law, and by means of such proceeding, establish a specific lien upon the property seized by attachment or execution. Such lien, when perfected, will doubtless entitle the creditor acquiring it, to a
B. Monr. (Ky.) 86; s. c. 41 Am. Dec. 256; Robinson v. Atlantic &c. R. Co., 66 Pa. St. 160; Texas Trunk Ry. Co. v. Lewis, 81 Tex. 1; s. c. 26 Am. St. Rep. 776; ante, § 6931.
1 Thomas v. Merchants' Bank, 9 Paige (N. Y.), 216. Compare ante, §7334.
1 Ante, §§ 7338, 7344.
3 It has been held that the levy of an attachment upon the property of a corporation of which a receiver has been appointed by another court
in the same State is void, although the suit in which he was appointed is subsequently dismissed, provided that, before such dismissal, another receiver has been appointed by a valid order, and the property has undergone administration in his hands, and has been sold under direction of the court appointing him. Texas Trunk Ry. Co. v. Lewis, 81 Tex. 1; 8. c. 26 Am. St. Rep. 776; 16 S. W. Rep. 647,
preference over other unsecured creditors. After the aid of a court of equity has been invoked, and that court has taken the assets of the insolvent into its hands, its jurisdiction becomes necessarily exclusive; and it will proceed, in administering the insolvent estate, upon the maxim that equality is equity. After that jurisdiction has attached, ordinarily, no creditor can pursue a legal remedy, at least in such way as to obtain for himself a preference. But the court of equity is bound to respect legal rights and preferences already acquired, and to make distribution accordingly."
§ 7796. Attachments by Directors. The doctrine that the assets of a corporation are a trust fund for all its creditors," and that its directors, as the custodians and trustees of this fund, are bound, in the event of insolvency or of anticipated insolvency, to deal with it for the equal benefit of all the creditors, and are probibited from so dealing with it as to secure preferences to themselves as creditors over other creditors,' operates, of course, to prevent them from obtaining such preferences by the abuse of legal process. They cannot, for instance, obtain such preference by causing the corporation to confess judgments in their favor. Obviously they will not, for the same reason, be allowed to get such a preference by attachment. The inequity of allowing such a preference is obvious; since they themselves create the conditions which give ground of attachment, and will ordinarily have knowledge of the existence of those conditions prior to any other creditor.
Roseboom 0. Whittaker, 132 Ill. bidding a corporation or its officers, 81, 89; 8. C. sub nom. Roseboom v. when it has refused payment of its Warner, 23 N. E. Rep. 339.
debts, “ to assign or transfer any of the Ante, 09 1569, 2951.
property or choses in action of such Ante, $ 6503, et. seq.; Beach v. Mil- company to any officer or stockholder ler, 130 III. 162; 8. c. 17 Am. St. Rep. of such company, directly or indi291.
rectly, for the payment of any debt," * Roseboom v. Whittaker, 132 Ill. a trustee of such a corporation cannot, 81; 8.c. sub nom. Roseboom v. War- as a creditor, maintain an attachment ner, 23 N. E. Rep. 339.
against its property, even though he • Under a statute of New York (1 has not been active as a trustee, and Rey. Stat. N. Y., ch. 18, tit. 4, $ 4) for- his co-trustees have conspired to
§ 7797. What Property Attachable. Whatever property is leviable under an execution may, as a general rule, be seized under an attachment, provided the conditions exist which entitle the creditor to resort to this remedy; and on the other hand, whatever property of a corporation is not liable to be applied to the claims of an individual creditor, is not liable to seizure under his attachment. As a general rule, whatever property would be attachable, if owned by an individual, is attachable if owned by a corporation. But to this rule there are distinct exceptions relating to property affected with a public interest, or held charged with a trust for public purposes. The property held by a municipal corporation for the purpose of discharging its public trusts,― such as its public buildings, the buildings and properties of its fire department, etc., are not seizable upon attachment or execution, -a principle which we need not elaborate, because we are
defraud him and other creditors. Throop v. Hatch Lithographic Co., 11 N. Y. Supp. 532; Kingsley v. First Nat. Bank, 31 Hun (N. Y.), 329. To the contrary effect, see Hill v. Knickerbocker Electric Light &c. Co., 45 N. Y. St. Rep. 761; s. c. 18 N. Y. Supp. 813. A decision is found in one jurisdiction to the effect that an officer of a corporation, who is also its creditor, may attach its property for the collection of his debt, though he knows of its failing circumstances, provided he is in no way responsible therefor, and though he knows that his attachment will precipitate a crisis in its affairs; and that his attachment will be good against subsequent attaching creditors and mortgagees. Rollins v. Shaver Wagon &c. Co., 80 Iowa, 380, 385; 8. c. 20 Am. St. Rep. 427. This case is in line with other decisions of the same court, elsewhere criticised (ante, § 6498), upholding the right of the directors of a corporation to prefer themselves as creditors. Warfield &c. Co. v. Marshall County Canning Co., 72
Iowa, 666; s. c. 2 Am. St. Rep. 263; Garrett v. Burlington Plough Co., 70 Iowa, 702. But there. were special facts in the case in favor of the plaintiff. He had been induced to become a stockholder and to loan money to the company under a misapprehension of its condition, and he had been an officer of it but a few weeks. Besides, the liens which his attachment postponed were subsequent legal liens, and the question arose as between him and a subsequent mortgagee, and it was held, and seemingly justly held, that his attachment gave him a preference. That a creditor of a corporation known to be insolvent cannot attach property turned over by the corporation to another creditor in part payment of a bona fide indebtedness due to the latter, although such transfer was made after its insolvency was ascertained, see State v. Brockman, 39 Mo. App. 131.
1 Ridge Turnpike Co. v. Peddle, 4 Pa. St. 490.
not concerned with it in this treatise. The same has been held of the property of turnpike and railway companies,' but even in such cases the true principle would extend no further than to prevent the seizure of such property as might be necessary to enable the corporation to discharge its public duties." Nor would it apply in a case where a statute gives a specific lien." Equitable interests in land are subject to attachment in some jurisdictions, and notably in Missouri. Property, the title of which is held by the directors of a corporation in trust for the corporation, is attachable under this rule at the suit of a creditor of the corporation; and after securing a lien upon the same by the levy of his attachment, the creditor is entitled to the aid of a court of equity to subject the land to sale in satisfaction of his judgment, without suing out an execution thereon and having it returned nulla bona."
87798. Bond for Attachment. The bond given by a corporation, where it is the plaintiff in an attachment suit, must, unless the statute otherwise provides, be under the corporate seal. A stockholder of a corporation, being a different person in law from the corporation itself,' may become a surety on a bond given to dissolve an attachment of the property of the corporation. A statute providing that in attachment cases "no undertaking shall be required where the party or parties defendant are all non-residents of the State, or a foreign corporation," does not deprive foreign corporations of
Ante, § 7758; post, § 7848.
A statute of Florida, seemingly in affirmation of this principle, enacts that all money and property of railroad companies in the hands of their officers, employés, or agents, shall be subject to garnishment upon judg- Rep. 584. ments against such companies. Florida Acts 1887, ch. 3738, No. 58, p. 111.
See, for instance, Hill v. La Crosse &c. R. Co., 11 Wis. 214, 223.
Rev. Stat. Mo. 1389, § 4915; Evans v. Wilder, 5 Mo. 313; Rankin
v. Harper, 23 Mo. 579, 585; Herring ton v. Herrington, 27 Mo. 560; Dunnica v. Coy, 28 Mo. 525; s. c. 75 Am. Dec. 133.
b Chicago &c. Bridge Co. v. AngloAmerican Packing &c. Co., 46 Fed.
Tanner &c. Engine Co. v. Hall, 22 Fla. 391.
Ante, §§ 1071, 4471.
City Nat. Bank v. Cupp, 59 Tex.
• Civ. Code Kan., § 102.
the privileges and immunities of citizens of the several States, within the meaning of the constitution of the United States.1
§ 7799. Liability to Attachment of Corporations Formed by the Concurrent Legislation of Different States. - A corporation formed by the concurrent legislation of two or more States, to operate a continuous interstate railway, or an interstate bridge, is a domestic corporation within each of the States,' and therefore is not subject to foreign attachment therein; though if the conduct of the corporation has given grounds for attachment, such as would exist against domestic persons or corporations under the attachment laws, then, of course, it would be subject to such an attachment.
1 Head v. Daniels, 38 Kan. 1; s. c. 15 Pac. Rep. 911; post, § 7876. • Ante, §§ 47, 319, 320, 688, 7438, Sprague v. Hartford &c. R. Co., 7452, 7472, 7490; post, §§ 7817, 8012, 5 R. I. 233. 8020, 8128.