State National Bank v. Merchants' Bank

GalhooN, J., delivered the opinion oí the court. The Merchants’ Bank made, or attempted to make, a general assignment, without any preferences whatever, to Mr. Duncan as assignee, for the benefit of its creditors, and he duly qualified as such, and proceeded regularly in conformity with chapter 8 of the code of 1892, and thus, under § 119 of that code, became receiver in equity in the chancery court of Grenada county. All creditors were duly made partners, including the appellants, and afterwards at the April term of the court, following the January term, when the proceedings were begun, a pro confesso decree was taken against them, but set aside on their motion. Thereupon they filed their cross petition in the pending cause, under Code 1892, § 121, against the receiver of the Merchants’ Bank, the prayer of which is to set aside the assignment and for a decree fixing in their favor a prior lien in the distribution of assets. The only ground that they take, as a predicate for this prayer, is that the assignment was ordered at a called meeting of the stockholders and board of directors, without notice served on some of them. The cross petition avers that “some of the stockholders” recommended to the board of directors that they make the assignment, which they did, but says the stockholders did not have “due, legal, and reasonable notice” of the “time, object, and purpose” of the meeting, and that a “large number” of them were thereby deprived of their right to “attend and participate.” It proceeds to charge that the meeting of the board of directors who made the assignment was illegal, because there was no such notice of the special meeting to the members as the by-laws required, and because there was not a quorum of the [620] “duly and legally qualified directors of said bank,” in that twa or three of them were not stockholders. In fact, a majority of the stock and stockholders were present at the stockholders’ meeting, and they ordered the board of directors to make the assignment, and to make it to Mr. Duncan as assignee. In fact, a legal quorum of the board of directors made the assignment. In fact, there was an emergent necessity that the assignment be made. In fact, there is entire acquiescence of every director and every stockholder in the action taken. There is no pretense of any fraud on, or injustice to, the appellants or any creditor of the bank. Now, inasmuch as the exigency required prompt action, and inasmuch as the interests of stockholders alone are concerned, and inasmuch as they are not complaining, but approving, vTe are in accord with that line of authorities which deny the relief asked by the creditors. These authorities are collated in the brief of counsel for appellants. We especially call attention to the opinion of Judge Cooley in Beecher v. Marquette, 45 Mich., 103; s. c., 7 N. W., 695. Affirmed.