Lum v. Robertson - 73 U.S. 277 (1867)
U.S. Supreme Court
Lum v. Robertson, 73 U.S. 6 Wall. 277 277 (1867)
Lum v. Robertson
73 U.S. (6 Wall.) 277
1. Where a bank charter is forfeited on quo warranto and the corporation is dissolved, and a trustee appointed by judicial order made under statute to collect the debts due to it and apply them to the payment of debts which it owes does so collect them and pay any surplus, by the laws of Mississippi, and by general laws of equity, will belong to the stockholders. Bacon v. Robertson, 18 How. 480, affirmed.
2. A delinquent debtor cannot in such case plead the judgment of forfeiture as against a trustee seeking to reduce his debt to money for the benefit of the stockholders.
In July, 1851, Lum made two promissory notes at Natchez, Mississippi, in favor of Robertson, as trustee of the Commercial Bank of Natchez, or order. On these notes
suit was brought below in the name of Robertson, for the use of Alexander Ferguson.
The defendant pleaded substantially as follows:
That prior to the making of the notes, an information in the nature of a quo warranto had been instituted by the State of Mississippi against the bank, under which its charter was declared forfeited and the corporation was judicially dissolved in pursuance of an act of the legislature of the state.
That under the provisions of the act, Robertson was, by an order of court, appointed trustee for the purposes set forth in the act, viz.,
"to take charge of the assets and books of said Commercial Bank of Natchez, wherever the same might be found, either in the possession of said bank, or their officers, agents, trustees, or attorneys; to sue for and collect all debts due to the bank, and the proceeds of the debts when collected, and of the property when sold, to apply as might be thereafter directed by law, to the payment of the debts of the said Commercial Bank of Natchez."
That the foregoing, and no others, were the appointment, power and authority of the said Robertson, as trustee of said bank, and that he never had any other right, title or interest as said trustee; that the said notes were executed on account of a debt to the said bank, and that the consideration thereof wholly moved from, and was due to, the bank, and that the notes were executed to Robertson in his official character and right, as trustee as aforesaid, and in no other character or right.
That subsequently, it appearing to the satisfaction of the said court that Robertson had fully discharged all his duties as trustee, and had fully satisfied and paid all legal claims against the trust fund in his hands, it was ordered that he be finally discharged from all the rights and duties conferred upon him by virtue of his appointment as such trustee &c.
That afterwards, to-wit, in a suit by one Bacon and other stockholders against Robertson for the purpose of recovering and distributing the surplus assets among the stockholders, Ferguson, to whose use the present suit was brought by a decree of court, duly appointed a receiver in said cause,
Robertson was ordered to deliver to Ferguson all the moneys, bonds, notes and property of all kinds which the said Robertson had held as late trustee."
That at the time the notes were made and executed to Robertson, trustee as aforesaid, he had collected of the debts, effects and property of said bank, an amount of money sufficient to pay off all its debts, and all costs, charges and expenses incident to the performance of his said trust, and had in fact paid off the same, and thereby became functus officio, and was further expressly removed from his said office of trustee, as aforesaid.
To these pleas the plaintiff demurred. The court sustained the demurrer, and judgment went for the plaintiff.
The matter for determination on error here, was whether the pleas presented a valid defense to the action.