Petition for injunction and receivership, impressment of trust, and other equitable relief, held not subject to general demurrer or motion to dismiss.

No. 13292. SEPTEMBER 25, 1940. REHEARING DENIED OCTOBER 16, 1940.

Moore filed an equitable petition against Aircraft Inc., a Tennessee corporation, Fuqua, a resident of Tennessee, individually and as trustee, and Belle Isle, a resident of Georgia, individually and as trustee. The essential averments are as follows: In November, 1938, Fuqua submitted to the corporation, which was engaged in manufacturing airplanes, a written offer, which stated: "I hereby propose to purchase the assets of every kind and character of Aircraft Inc., in consideration of my paying all the indebtedness of Aircraft Inc., which I am advised by your secretary does not exceed $4000;" and further stated that he would purchase from the stockholders all the outstanding stock for 25 per cent. of its par value, or issue to them stock to the extent of that percentage in a proposed new corporation, if and when organized. The corporation soon thereafter accepted this offer, and delivered to Fuqua all of its assets, including plant equipment, two completed or partly completed airplanes, certain patents, accounts and notes receivable, supplies, and other property. There was also pleaded a written agreement, signed by certain stockholders, including Belle Isle, which stated that the corporation was financially unable to operate any longer, was shut down, and owed creditors about $4000; that such stockholders desired "to purchase all the assets of the corporation and pay its indebtedness, in order to protect our investment, as well as such stockholders as may hereafter wish to join us in the enterprise;" and therefore they appointed Fuqua as trustee, and authorized him to bid for all the assets not exceeding $4000, and also to buy the outstanding stock at twenty-five cents on the dollar; that they further authorized him "to name in his place and stead another trustee," if he so desired, "and said substitute trustee is to have title to the assets for our benefit in the same manner as the said . . Fuqua will hold title thereto, if the corporation accepts our proposition;" and authorized Fuqua to execute certain papers pertaining to the manufacture, "provided, however, that [he] shall not have the authority to obligate us or either of us financially, further than the offer for the purchase of said assets, without our consent, nor shall the substitute trustee so named by him have any authority to bind us financially in any manner without our written consent." At the foot of this instrument the signature of Fuqua appears below the words, "I accept the foregoing trust and agree to act as trustee, this November 18, 1938." Below this is an appointment of a substitute trustee, signed by Fuqua as trustee, as follows: "Pursuant to the authority vested in me by the above instrument, I . . do hereby assign and transfer to Alvin L. Belle Isle . . all right and title to the property acquired by me as trustee from Aircraft Inc., and all rights given me under the above instrument, giving to him all the authority which I have and is accorded the substitute trustee in the above instrument, . . this 10th day of December, 1938." After this appears the following: "I accept the above trust, and agree to act as trustee," signed by A. L. Belle Isle.

It is alleged that by this assignment from Fuqua to Belle Isle, and by the acceptance of Belle Isle, the latter assumed responsibility for the payment of the corporate debts, a list of which is attached to the petition, and the total of which amounts to $3063.21, including an alleged debt of $1140 to the petitioner for a loan of money, evidenced by a pleaded writing. This was dated July 25, 1938, signed by the corporation, and acknowledged receipt of such money, to be repaid on September 23, 1938. It is further alleged, that no part of this debt has been paid, after demands on the corporation, Fuqua, and Belle Isle, and the principal is due with 6 per cent. interest from maturity; that before the transfer to Fuqua, he and Belle Isle had notice of this and other corporate debts, the list attached to the petition having been furnished to them; that because of said transactions the corporation has no assets, and its debts to petitioner and other creditors, in whose behalf he also proceeds and asks relief, remain unpaid, and the property in the hands of Belle Isle was and is impressed with a trust for the payment of such debts; that the assumption of these debts should be enforced for the benefit of petitioner and others similarly situated, on equitable principles; and that the defendants plan to transfer the properties to a corporation, as to which the particulars are not known. The prayers are, that petitioner have judgment for his debt against Belle Isle; that said properties in the possession of Belle Isle be decreed to be impressed with a trust for the payment of the corporate debts; that a receiver be appointed to take possession of said properties; that Belle Isle be enjoined from transferring or using any of said assets pending determination of the case; that the non-resident defendants be served by publication; and that other and further relief as might be proper be granted. After a hearing, with the plaintiff and the defendant Belle Isle present, a temporary restraining order was granted, and a receiver appointed.

Belle Isle filed a motion to dismiss, and general and special demurrers to the petition and most of the paragraphs, on the grounds: that the petition stated no cause of action against this defendant, either as an individual or as trustee; that the petition invoked two inconsistent remedies, the recovery of a personal judgment against Belle Isle, and the impression of a trust on the corporate assets for the payment of the debt; that the plaintiff by asking and obtaining a receiver had already made an election between such remedies, and was not entitled to a judgment; that for the reasons stated the petition contained a misjoinder of causes of action, was multifarious and duplicitous, and the plaintiff should be put to an election; that the petition failed to show any privity between the plaintiff and this defendant, since he was not a trustee for the plaintiff; that the averments and attached instruments showed no liability on the part of the defendant; and that certain paragraphs were conclusions of the pleader, or stated matters only on information and belief, without facts, as to the transfer of assets, the liability of the defendant, the capacity in which Fuqua acted, and the assumption of debts, and such paragraphs should be stricken. The defendant excepted to the overruling of the demurrers and the motion to dismiss.

JENKINS, Justice.

1. Where a debtor conveys property to another person, and the vendee as a consideration agrees to pay the debts of the vendor, a creditor of the vendor may enforce the assumption agreement against the vendee by a suit in equity with proper pleadings and parties. Sheppard v. Bridges, 137 Ga. 615 (1-3) ( 74 S.E. 245); First National Bank of Quitman v. Rountree, 173 Ga. 117 ( 159 S.E. 658); National Mortgage Co. v. Bullard, 178 Ga. 451, 453 ( 173 S.E. 401); Morgan v. Argard, 148 Ga. 123, 125 ( 95 S.E. 986); Burgess v. Ohio National Life Insurance Co., 177 Ga. 48, 51 ( 169 S.E. 364).

2. Where a corporation owing debts transfers its entire assets to a vendee on the consideration that he pay its debts, and he fails to do so, the corporation is to be regarded as in a state of insolvency. Such a transferee takes the assets cum onere, impressed with a trust in favor of creditors; and in an equitable suit by a creditor in behalf of himself and other creditors, against the corporation and the vendee, the assets may be impressed with the trust or right of payment in favor of creditors. An injunction against any further transfer of the assets, and an appointment of a receiver, if necessary to protect this right of creditors, are proper. See The Anvil v. Savery, 116 Ga. 321, 324 ( 42 S.E. 495); Tatum v. Leigh, 136 Ga. 791 ( 72 S.E. 236); Smith Co. v. Austin Co., 143 Ga. 254 ( 84 S.E. 444); Sheppard v. Bridges, supra; Wood v. Dummer, 3 Mason, 308; 15-A Fletcher's Enc. Cor. §§ 7415, 7369. See also Code, § 22-1208, recognizing the "trust-fund" doctrine where there is a "dissolution of a corporation for any cause."

3. While a plaintiff may not invoke the aid of the courts upon inconsistent theories or principles of redress, based on the same facts, but is put to an election between such alternative remedies, and a choice once made will operate as a bar to the other remedy ( Bacon v. Moody, 117 Ga. 207, 43 S.E. 482; Hand v. Brown, 144 Ga. 272, 86 S.E. 1080), yet he "may pursue any number of consistent concurrent remedies against different persons until he shall obtain a satisfaction from some of them." Code, § 3-114; 18 Am. Jur. 136; 20 C. J. 6. Where, in a case such as stated in the preceding paragraphs, a creditor of a corporation proceeds in equity for himself and other creditors against a corporation which has transferred all of its assets, and against its vendee who assumed its debts up to a stated amount, the vendee under his assumption agreement may be thus subjected to liability in equity up to that amount; and in the same suit the assets may be charged with a trust or right of payment therefrom, arising in favor of creditors. These remedies not being inconsistent, the plaintiff would not be put to an election between them, although he would not be entitled to more than one satisfaction of his debt, and any moneys that might be derived from a sale of the assets would be credited on the liability arising from the assumption agreement. See Sheppard v. Bridges, and National Mortgage Co. v. Bullard, supra; Pierce v. U.S., 255 U.S. 398 ( 41 Sup. Ct. 365, 65 L. ed. 697); Cobb v. Interstate Mortgage Co., 20 F.2d 786. Under the preceding rulings and the averments of the petition, the plaintiff could proceed on both remedies until he obtained a satisfaction from one of them. Equity, having all parties in the transaction before it, has jurisdiction to give complete relief to the plaintiff and other creditors, and to adjust the rights of the parties so as to do justice to all. Accordingly, the petition was not subject to the motion to dismiss or to general demurrer, or to special demurrer by the defendant vendee, on the grounds of misjoinder, multifariousness, or duplicity.

4. The petition not being subject to any of the grounds of demurrer stated, or to other special grounds relating to alleged conclusions or statements on information and belief, as indicated in the statement of facts, the court did not err in overruling the demurrers on all grounds.

Judgment affirmed. All the Justices concur.