Opinion
15850, 15861.
JUNE 12, 1947. REHEARING DENIED JULY 11, 1947.
Receivership, etc. Before Judge Almand. Fulton Superior Court. February 21, 1947.
James F. Cox, William G. Grant, Lokey Bowden, Smith, Partridge, Field Doremus, Sydney F. Keeble, and Carl B. Copeland, for Irwin et al. Powell, Goldstein, Frazer Murphy, Vance Custer, H. G. Bell, Herman Talmadge, A. B. Conger, and W. H. Miller, for Willis et al. Smith, Kilpatrick, Cody, Rogers McClatchey, E. D. Smith Jr., and Hoke Smith, for Geele et al.
1. Where the evidence shows that a large number of the occupants of a hotel building were injured as a result of a fire therein, and that the hotel was maintained in a condition which was violative of an applicable city ordinance which required various safety precautions against the hazard of fire, the owner, who acquired the hotel while it was under a written lease to others for a number of years, which lease gave to the lessees the exclusive possession except to authorize and require the owner to enter and make repairs required by law, would be guilty of negligence per se and liable for the injuries resulting from such negligence.
2. Creditors without lien or other claims against the property of a debtor are not, as a general rule, entitled to injunction, receivership, or other equitable relief before judgment. The mere fact that there was joined with the tort action a prayer for cancellation of an alleged fraudulent conveyance, that certain funds belonging to the defendants were under lien of garnishment, that the hotel building was exposed by broken windows and other damage by the fire, and there was a number of suits pending because of injuries to guests, as well as the existence of a prior lien upon all the property in favor of another corporation, did not, in view of the owner's written offer to protect and preserve all the property and give bond to insure its fulfillment, authorize the appointment of a receiver.
Nos. 15850, 15861. JUNE 12, 1947. REHEARING DENIED JULY 11, 1947.
Atkinson, Justice, being disqualified, Judge Boykin was designated for this case.
This was a suit in equity brought by Mrs. Ruby E. Willis, Mrs. Elizabeth S. Griffin, S. Marvin Griffin, Mrs. Mattie E. Davis, Mrs. Elizabeth D. Bates, Mrs. Annie C. Gragg, Mrs. Pearl C. Murphy, Mrs. Alice Broome, and Mrs. G. L. Powell against Mrs. Annie Lee Irwin, W. H. Irwin, A. F. Geele, A. F. Geele Jr., R. E. O'Connell, The Arlington Corporation, Life and Casualty Insurance Company of Tennessee, Fireman's Fund Insurance Company, Royal Insurance Company, Limited, Home Insurance Company of New York, and Potomac Insurance Company. The brief of counsel for the defendants in error contains a full and fair statement of the petition, which is as follows: The defendants, Geele, Geele and O'Connell, operated the Winecoff Hotel in Atlanta, Georgia, the hotel being owned by Mrs. Annie Lee Irwin. On the night of December 6, 1946, a child of each of the plaintiffs was a guest at the hotel and lost his or her life as a result of the fire which broke out in the hotel early in the morning of December 7, 1946. The death of each of these children was proximately caused by negligence on the part of the defendants, Irwin, Mrs. Irwin, Geele, Geele and O'Connell, and each of the plaintiffs has a right of action against them on account thereof. Each of the plaintiffs sued out a fraudulent debtor attachment against Mrs. Irwin before a judge of the superior court, which was levied on the Winecoff Hotel building. Each of the plaintiffs caused summons of garnishment to be issued on the attachment and served upon the defendants, Fireman's Fund Insurance Company, Royal Insurance Company, Limited, Home Insurance Company of New York and Potomac Insurance Company. Each of the plaintiffs also filed a suit for damages in the Superior Court of Fulton County against the defendants, Irwin, Mrs. Irwin, Geele, Geele and O'Connell, and sued out garnishment proceedings in the Civil Court of Fulton County, based on the said pending common-law suits. Summons of garnishment issued thereon, returnable to the Superior Court of Fulton County, was served upon each of the defendant insurance companies hereinbefore referred to. Mrs. Irwin or the other defendants carried fire insurance on the Winecoff Hotel and the furniture and furnishings thereof. It was alleged on information and belief that the total amount of insurance on the building against loss or damage by fire was $350,000. The total amount of insurance on the furniture and furnishings was $25,000, and the total amount of insurance against loss of use and occupancy on account of fire was $50,000, making a grand total of $425,000. All of the said policies were issued to Mrs. Annie Lee Irwin and held by her or for her use and benefit. It was alleged that the building and the furniture and furnishings were substantially destroyed by the fire, and the nature of the damage was such as to make substantially all of the insurance payable by the defendant fire insurance companies, which sums would become due on their policies as soon as proper proofs of loss were filed. It was alleged that by virtue of the garnishments each of the plaintiffs had a lien upon the proceeds of the fire-insurance policies for any judgments that might be rendered in their favor against the defendants in the said common-law actions and the said attachment actions, and that by virtue of the levy of the attachments the plaintiffs had a lien on the Winecoff Hotel building for any amount they might recover against Mrs. Irwin in the attachment actions. At the time of the fire, Mrs. Irwin owned the Winecoff Hotel building, holding the fee-simple title thereto, subject to a first mortgage in favor of the defendant, Life and Casualty Insurance Company of Tennessee, on which there was an unpaid balance of $175,000. It was alleged that the Winecoff Hotel building and the land upon which it stands are worth in excess of $500,000 and would sell easily for at least $300,000 more than the first mortgage loan. It was alleged that the policies of fire insurance were held by or for the benefit of the Life and Casualty Insurance Company of Tennessee, as additional security for the loan, and that the aggregate of the amount due on the policies by reason of the fire was more than sufficient to pay off the loan in full; that the leasehold interest of the defendants Geele, Geele and O'Connell, operating as Winecoff Hotel Company, was worth $25,000 to $50,000 per year more than the rent accruing on the lease contract, which had ten years to run, and that it was the obligation of the defendant, Mrs. Irwin, to repair the building within twelve months, upon demand of the lessees, if it could be done; that the lessees had failed to make such demand, and their failure to do so was damaging the leasehold estate and would result in its becoming entirely worthless.
It was alleged that within four days after the fire the defendant, Mrs. Irwin, transferred the Winecoff Hotel and the land upon which it stands to the defendant, The Arlington Corporation, for a purported consideration of $400,000; that this transfer was fraudulent, was made solely to hinder, delay, and defraud creditors, and was the result of a conspiracy between Mrs. Irwin, W. H. Irwin, her husband, and the other persons assisting in the organization of The Arlington Corporation to strip Mrs. Irwin of her property and particularly the Winecoff Hotel, so that she would become insolvent and unable to pay any judgment that might be obtained against her on account of the fire; that more than one hundred persons lost their lives in the fire and scores of other persons were seriously injured; that already suits for more than three million dollars had been filed against the defendants, Irwin, Mrs. Irwin, A. F. Geele, A. F. Geele Jr., and R. E. O'Connell. It was alleged that the plaintiffs had caused summonses of garnishment, issued from the Civil Court of Fulton County and returnable to the Superior Court of Fulton County in the said pending common-law actions brought by them against the defendants, Irwin, Mrs. Irwin, Geele, Geele and O'Connell, to be served upon the defendant, The Arlington Corporation; that although the transaction between Mrs. Irwin and The Arlington Corporation was a fraudulent one, if it should be determined that it was a bona fide transaction the effect thereof would be to cause The Arlington Corporation to become indebted to Mrs. Irwin in the sum of $300,000, secured by a conveyance of the Winecoff Hotel property, and said indebtedness was and is subject to garnishment in the said suits. It was alleged that, since the fire of December 6, 1946, none of the defendants had made any effort to repair the damage to the building, but it was standing with the windows broken out, the roof damaged, and exposed to wind and weather, which was resulting in a rapid deterioration in the value of the building, and in addition ad valorem taxes were accruing against the property, which it was producing no income to pay, and interest was accumulating on the loan. The plaintiffs recognized that the lien of Life and Casualty Insurance Company of Tennessee was superior to the liens of the plaintiffs resulting from the levy of the aforesaid attachments, but alleged that the property covered by the lien of the defendant, Life and Casualty Insurance Company of Tennessee, was worth at the time the suit was filed $300,000 more than the amount of the loan; and that they were entitled in equity to subject the said excess value to their claims. It was alleged, however, that, if the present situation continues and the property remains in its state of abandonment, it will so rapidly deteriorate in value that by the time it will be possible to try the suits and obtain judgments the property will be worth but little, if any, more than the amount of the loan. It was alleged that the liens arising on garnishments caused to be served by the plaintiffs are superior to any claim of Life and Casualty Insurance Company of Tennessee against the proceeds of the policies of fire insurance, but the amount of the policies is sufficient to pay off the loan of the insurance company in full and free the building of the lien against it held by the insurance company; that the plaintiffs were entitled to the aid of a court of equity in the enforcement of their liens arising by virtue of the levies and the service of the summonses of garnishment, and also entitled in equity to have the superior claim of Life and Casualty Insurance Company of Tennessee as to the property levied upon satisfied by other means, so as to free the property of the superior lien and make the liens of the plaintiffs first liens, or to have Life and Casualty Insurance Company of Tennessee elect to assert its lien only against the building, the value of which was ample to satisfy its claim, and free the proceeds of the fire-insurance policies to the benefit of the plaintiffs; that irreparable injury and damage were resulting to the plaintiffs and to all other persons similarly situated by virtue of the rapidly diminishing value of the Winecoff Hotel, to which reference has already been made; that the plaintiffs were entitled to prosecute their suits for damages to final judgment and to have the judgments entered therein satisfied out of the property referred to and the fund arising from the policies of fire insurance; that, unless a court of equity should intervene to take charge of the property and settle the question of priority, a multiplicity of actions would result with reference thereto, and that, unless a court of equity should take charge of the property through a receiver, the assets which will be available to satisfy the judgments of the plaintiffs will be dissipated; that it was to the interests of the plaintiffs, as well as the defendants, and all other persons having claims against the defendants that the assets of the defendant. Mrs. Irwin, and the other defendants operating under the trade name of Winecoff Hotel Company, be marshaled, and that all questions of priorities be settled in a single action, and that unless such be done a multiplicity of suits would necessarily result.
It was alleged that it was necessary to the preservation of the rights of all parties that a receiver be appointed to take charge of the property, including the proceeds of the policies of fire insurance, and collect the amounts thereon; that the court determine whether the Winecoff Hotel building should be repaired and its value restored, and whether the proceeds of the policies of insurance should be used for that purpose or held to satisfy the judgments which might be entered in favor of the plaintiffs in their pending suits or applied to the satisfaction of the lien of the defendant, Life and Casualty Company of Tennessee. The plaintiffs are entitled to have the liens arising in their favor by virtue of the levy of the attachment declared to be first liens on the property known as the hotel property, in the event the court shall determine it to be to the best interest of all parties concerned that the lien of Life and Casualty Insurance Company of Tennessee be satisfied from the proceeds of the fire insurance alleged to be ample for that purpose; and that, if the court should determine that such action would not be to the best interest of all parties concerned, the plaintiffs were entitled to have their liens established upon the proceeds of the policies of insurance, and to have their liens established upon the property, subject only to the prior claim of the insurance company, and to have the property sold and the proceeds applied first to the payment of the indebtedness of Life and Casualty Insurance Company of Tennessee, and the balance to the satisfaction of the plaintiffs' claims, and that they were entitled in equity to have all of the said assets preserved by the court through a receiver until all such questions could be adjudicated and determined. It was alleged that the defendants, Mrs. Annie Lee Irwin, W. H. Irwin, A. F. Geele, A. F. Geele Jr., and R. E. O'Connell, are insolvent.
The prayers were for equitable relief, appointment of a receiver, establishment of the liens claimed by the plaintiffs, cancellation of the conveyance from Mrs. Irwin to The Arlington Corporation, and for other and further relief.
The evidence upon the interlocutory hearing showed that 119 persons died as a result of the Winecoff Hotel fire. It was stipulated that at the time of the hearing 85 suits had been filed against the defendants for a total amount of more than $3,000,000. Counsel for the lessees admitted that, if judgments were obtained for the full amounts sued for, the lessees would be unable to pay the same. The following was stipulated: At the time of the fire a child of each of the plaintiffs was a guest of the hotel, and that the fire which broke out in the hotel resulted in the death of each of the said children. Each of the said children contributed to the support of his or her mother, and each had an earning capacity, and each mother had a right of action for the negligent homicide of the said child. Each child occupied a room on the ninth floor of the hotel. The stairways of the hotel had no fire doors. There was no sprinkler system in the building. There was no automatic alarm system. There was no fire escape, and the only means of exit from the upper floors was by way of the elevator or by way of the stairway.
The evidence showed the following: The fire was of unknown origin. It broke out on the third floor and spread rapidly, and the building was a roaring furnace before the fire department got there, which was after a short interval. The only means of exit of the occupants above the third floor was the stairway and elevator, and these were in a single shaft or opening. There were no doors on the stairway between the floors. It was impossible for anybody to escape down the stairway or by the elevator because of flames, smoke, and gases that were drawn up this open shaft which acted as a flue. Many occupants died of suffocation by carbon monoxide poison caused by these gases being drawn up the shaft and reaching the top of the building where they could not escape, with the result that they settled down into the rooms of the building and killed the occupants. Others were killed by jumping from the building in an effort to escape. The wainscoting in the hall was covered with burlap or other inflammable material, and had received numerous coats of paint. The doors, transoms, baseboards, and trim were all of wood construction and not fireproof. Four days after the fire, Mrs. Irwin transferred the building, together with the fire-insurance policies thereon, subject to a loan of Life and Casualty Insurance Company of Tennessee, to The Arlington Corporation for a consideration of $400,000. The value of the building in its present condition is from $650,000 to $750,000. If repaired, the building and the land on which it stands would be worth $1,500,000. The existence of a $50,000 per year lease thereon for ten more years would reduce the value of the building to $900,000 after repairs. The fair rental value of the building would be $85,000 per year, including the Henri Monet store, which is a part of the building. Immediately after the fire, W. H. Irwin, the husband of Mrs. Annie Lee Irwin, arranged to have The Arlington Corporation chartered, and thereupon Mrs. Irwin conveyed the property to the corporation, which had no assets, its capital stock being $100,000. The stockholders subscribed for the capital stock and paid their subscriptions by notes payable to Bank of Fulton County. Mr. and Mrs. Irwin took these notes, ostensibly in payment of a portion of the purchase-price of the property. Mrs. Irwin took the corporation's note for $300,000, due in ninety days, for the balance of the purchase-price which was $400,000. The stockholders' notes were secured by their respective stock certificates, which were transferred in blank and attached thereto. No purchaser of stock paid any money. Seven-tenths of the stock was issued to T. W. Fox, who operated the Hangar Hotel which was owned by Mrs. Irwin. Mr. Irwin took all of the stock notes to Bank of Fulton County and endorsed them. The bank declined to accept the $70,000 note of Fox because it was beyond the legal limit of the loans that the bank could make, but it did handle the notes of the other stockholders, amounting to $30,000. The proceeds of these notes were deposited to the credit of a private bank owned by Mr. Irwin, which apparently had no place of business.
Fox testified that the formation of The Arlington Corporation for the purpose of buying the Winecoff Hotel was his own idea. He testified that he had never had any discussion with the bank about making his $70,000 note payable to the bank; and that he did not know whether the bank had ever advanced any money on his note.
There was evidence that Mrs. Irwin had been offered $500,000 for the hotel property shortly before her property was sold to the corporation for $400,000.
There were put in evidence certain ordinances of the City of Atlanta applicable to hotels, and making the duty of compliance rest upon the owner and lessees. One of the ordinances, passed in 1923, containing the Builders' Code of the City of Atlanta, was inapplicable to the Winecoff Hotel, which was built before that time, but it specified requirements for fire-resistive building; and later ordinances, which were introduced in evidence, applied only to buildings not of fire-resistive construction within the meaning of the 1923 ordinance.
The building inspector testified first that the Winecoff Hotel was of fire-resistive construction, but later in his testimony stated that it was not of such construction.
Section 110 of the 1923 ordinance requires of fire-resistive buildings that all shafts be enclosed and separated from the rest of the floor space by fire-resistive enclosures, as specified in sections 90 and 115, and shall have floor surfaces of incombustible material. Section 90 provides that all shafts exceeding six square feet in area containing elevators, escalators, hoistways, chutes, ventilating ducts, or used for any other purpose, shall be continuously enclosed with fire-resistive walls or partitions.
It was shown that, at the time the defendant, Mrs. Annie L. Irwin, purchased the equity in the Winecoff Hotel property, the defendant, Life and Casualty Insurance Company of Tennessee, held a security deed thereto, and the defendant lessees had a written lease thereon, extending over a period of many years, which lease gave the exclusive possession to the lessees except that it authorized and required the owner to enter thereon for the purpose of making repairs or alterations that might be required by law or officials of the law, and that Mrs. Irwin did not, at the time of the purchase or thereafter, go upon or change the condition of the premises.
In evidence was a letter, dated December 30, 1946, from E. D. Smith Jr., attorney for A. F. Geele Sr., A. F. Geele Jr., R. E. O'Connell and Winecoff Hotel Company, making a formal demand for restoration of the hotel building, and addressed to The Arlington Corporation.
The defendant, The Arlington Corporation, by amendment to its answer, recited that it had in open court offered to hold all the property in status quo and to give such bond as the court may deem to be necessary in the premises pending a determination by the appellate courts as to Mrs. Annie Lee Irwin's liability to the petitioners. The amendment listed the defendant's property, then averred that the defendant affirms the offer theretofore made in open court and now offers to hold its property in status quo pending a determination of the liability of Mrs. Irwin to the petitioners; that it will consent to an order to be entered by the court restraining it from, (a) conveying, encumbering or in anywise changing the status of the title to the property known as the Winecoff Hotel property; (b) from settling and negotiating a settlement except by express order of the court of any claim it may have under and by virtue of a fire-insurance or other policy on the Winecoff Hotel property, or claiming or receiving any sum on account of such policies, fire-insurance or any policies which may exist, the defendant to have the right, however, to do whatever may be necessary to protect its interest in the said insurance policies and to expedite a determination of the amounts which may be due thereon. The amendment further recited that the defendant would hold all rentals which it may collect from the premises subject to the order of the court, and will pay out the same only for the necessary expenses of preserving the said property by employment of a watchman and the payment of electric and other bills; that it will give a good and sufficient bond in such amount as may be determined by the court to cover any and all rentals which may be collected by it; and that, in addition, the defendant will see that the Winecoff Hotel property is properly preserved and protected and will, if necessary, give a good and sufficient bond to insure the carrying out of this undertaking; that the rights of all parties concerned will be fully protected and preserved in this manner without the necessity of a receiver and the costs attending the same; that the defendant will consent to any other and further order which the court may in its discretion consider necessary and proper to preserve the status quo and protect the interest of all parties concerned, provided no receiver is appointed.
On February 21, 1947, an interlocutory judgment was entered appointing Alvin Cates and W. F. Buchanan receivers for: (a) the real estate known as the Winecoff Hotel building; (b) the control and management of the said real estate and the property thereon and the contents therein, including all furniture and all other physical property; (c) all right, title and interest of Mrs. Annie Lee Irwin and The Arlington Corporation and the lessees in and to the said property; (d) all policies of fire insurance and of use and occupancy insurance and any other type of insurance upon or in any manner connected with the said property or any interest therein, real or personal, or any leasehold or tenancy interest therein, regardless of whether the said policies be in the name of the defendant, Mrs. Annie Lee Irwin, The Arlington Corporation, or the individual lessees named in the petition or Life and Casualty Insurance Company of Tennessee or any other person; (e) all assets and properties of any nature whatsoever of The Arlington Corporation, including all corporate records, bank accounts, money, deeds, and all other assets either in the legal or equitable ownership of The Arlington Corporation; (f) all right, title and interest of the lessees, A. F. Geele Sr., A. F. Geele Jr., and R. E. O'Connell under any lease contract covering the said real estate or the said Winecoff Hotel building, including but not limited to all assets, rights, and liabilities given to the said lessees under the lease contracts between Walton Investment Company Inc. and Winecoff Hotel Company Inc., an Alabama corporation, dated March 19, 1915, or under the lease contract between Winecoff Hotel Company Inc., a Delaware corporation, and Tennessee Realty Corporation, dated July 16, 1936, and under any lease contract whatsoever with The Arlington Corporation or Mrs. Annie Lee Irwin or their predecessors in interest, and the defendants, Geele, Geele and O'Connell, doing business as Winecoff Hotel Company, or their predecessors in interest; also all rights under any contract or lease between the said defendants and the owners, operators, or tenants of the store known as Henri Monet or any other store or any other leased portion of the Winecoff Hotel property, with all sums of rent held by any person because of such leases, along with all furniture, fixtures, supplies, materials, and assets of any nature, including bank accounts used or held by the said lessees or any of the defendants in connection with the operation of the Winecoff Hotel, and all fire, liability, use and occupancy and other insurance policies and the proceeds thereof, under which any claim could be made against the insurance companies by reason of the fire when the Winecoff Hotel was burned. The receivers were given general power to manage the said properties and all funds which had been garnished, and all funds or assets which had been attached were directed to be paid to the receivers without prejudice to any party. The receivers were directed to file proofs of claims, negotiate, settle, and collect all insurance proceeds under proper orders of the court. All persons were enjoined from thereafter instituting garnishment or attachment proceedings against any assets in the hands of the receivers and from attempting to establish any claim against such assets except by intervening in this action, and all the defendants except Life and Casualty Insurance Company of Tennessee were enjoined from alienating or transferring any interest in the building or leaseholds thereon or in The Arlington Corporation or any policy of insurance involved in the receivership and from collecting funds under any policy of insurance connected with the assets involved in the receivership. The order further provided that, before establishing any lien for damages arising from the fire, all other suits therefor must be consolidated with No. 162475, which may be accomplished either before or after judgment, provided that no lien against the assets involved in this suit may be obtained except through intervention or consolidation, and then subject to the rights of the petitioner in the above-numbered case and others similarly situated as they may be established in the said case. The receivers were required to give a bend in the sum of $25,000 for the faithful performance of their duties.
Mrs. Annie Lee Irwin and The Arlington Corporation except in case No. 15850, and A. F. Geele Sr., A. F. Geele Jr., R. E. O'Connell, and Winecoff Hotel Company, a partnership, except in case No. 15861.
1. Counsel for the plaintiffs in error very strongly insist that upon this record it should be held as a matter of law that Mrs. Annie Lee Irwin is not liable. In the view we take it is entirely unnecessary to go exhaustively into a consideration of the various legal principles relating to the general subject of liability of a landlord for injuries sustained upon premises in the exclusive possession of a tenant. It is provided in the Code, § 105-103, that "When the law requires one to do an act for the benefit of another, or to forbear the doing of that which may injure another, though no action be given in express terms, upon the accrual of damage the injured party may recover." While by its express terms the city ordinance adopted in 1923 did not apply to the Winecoff Hotel, which was built in 1913, yet that ordinance contained what was known as the building code, which defined a fire-resistive building. Section 90 thereof was in part as follows: "All interior shafts containing stairways required to be enclosed by section 45, and except in dwellings all shafts exceeding six feet in area, containing elevators, escalators, hoistways, chutes, ventilating ducts, or used for any other purpose shall be continuously enclosed with fire-resistive walls or partitions . . . Stairway and elevator shall not be permitted within the same shaft enclosure. All door openings into such shafts shall be protected by fire doors which shall be self-closing except for elevator doors." The quoted provisions of the city code are the requirements of a fire-resistive construction. Section 6-B of the 1941 ordinance provides that the ordinance shall not apply to fire-resistive buildings "as defined in the building code of the City of Atlanta." The evidence in this case describing the construction of the Winecoff Hotel shows that it did not meet the requirements of the building code for fire-resistive construction. The stairways were entirely open, whereas to be fire-resistive they must, under the code, be closed. Other details could be enumerated demonstrating that as defined by the code this building was not fire-resistive; hence, it was subject to the terms and requirements of the 1941 ordinance. That ordinance requires that, even when vertical openings are enclosed, the building must have either a manual fire-alarm system, an automatic fire-alarm system, or automatic sprinklers. The Winecoff Hotel building had neither. In addition to the clear provision of the ordinance of the City of Atlanta, the testimony of O. M. Harper, the Chief Building Inspector of the City of Atlanta, would have authorized the trial judge, in the exercise of his discretion, to have found that the building was not fire-resistive within the meaning of that term as used in the building code. True, as contended by counsel for the plaintiffs in error, this witness first stated the opinion that the building structurally was fire-resistive within the meaning of that term in the building code, but the same witness further testified that the wooden baseboard was not fire-resistive and that, "as to how this building complied with the fire-resistive requirement of having fire doors in the hallway shaft, well, it did not have them, any fire doors. I mean that the building does not comply with the fire-resistive requirements of the 1924 building code or the earlier building code." It was shown in the record that, while the code was adopted in 1923, by its terms it became effective in 1924. The same witness further testified that he was familiar with the 1924 building code of the City of Atlanta, and that "the Winecoff Hotel does not meet in all respects the 1924 code. There are no fire doors . . . the stairway and elevator were within the same shaft enclosure." There was sufficient evidence before the trial judge to authorize his finding that Mrs. Annie Lee Irwin, the owner, was at the time of the fire violating the ordinance of the City of Atlanta, and that such violation was the proximate cause of the injuries. While the lease contract gave the exclusive possession to the lessees, it authorized the owner to enter upon the premises for the purpose of making any repairs or alterations required by law. Accordingly, it must be held that the evidence was sufficient to make out a case of prima facie liability against the owner, Mrs. Irwin. Nothing herein ruled is intended to imply that she may not be otherwise liable.
The writer wishes to make the statement, in which Justice Wyatt joins as also applicable to himself, that he dissented in Irwin v. Griffin, ante, 456, not because he entertained the opinion that Mrs. Irwin could not be held liable, but solely because the opinion expressly limited its effect to the one ruling that upon a motion to remove the attachment the defendant would not be allowed to show, as a ground for removal, that as a matter of fact and law he was not liable to the plaintiff in attachment.
2. The only lien or claim to any of the property here involved which the petitioners assert is one against the funds involved in virtue of the summonses of garnishment, the attachments levied upon the building having been dismissed. It can not be denied that as a general rule creditors without a lien may not enjoin their debtors from disposing of property or obtain other extraordinary relief in equity, such as the appointment of a receiver. Code § 55-106; Cubbedge v. Adams, 42 Ga. 124; Mayer v. Wood, 56 Ga. 427; Stillwell v. Savannah Grocery Co., 88 Ga. 100, 142 ( 13 S.E. 963); Guilmartin v. Middle Ga. Ry. Co., 101 Ga. 565, 569 ( 29 S.E. 189); Virginia-Carolina Co. v. Provident Society, 126 Ga. 50 ( 54 S.E. 929); Helmken v. Flood, 138 Ga. 200 ( 75 S.E. 3); Smith v. Manning, 155 Ga. 209 ( 116 S.E. 813); Continental Trust Co. v. Sabine Basket Co., 165 Ga. 591 ( 141 S.E. 664); Hermann v. Mobley, 172 Ga. 380 ( 158 S.E. 38); Keeter v. Bank of Ellijay, 190 Ga. 525 ( 9 S.E.2d 761); Lawrence v. Lawrence, 196 Ga. 204 ( 26 S.E.2d 283). The Constitution of this State, article 1, section 1, paragraph 2, declares: "Protection to person and property is the paramount duty of government, and shall be impartial and complete." It is the duty of the State government, through the instrumentality of the courts, to protect the property of a citizen and his right to possess and control it. This duty is not performed when the court, through the agency of a receiver, deprives the citizen of the possession and control of his property where he has not forfeited such right under some provision of the law. In Jones v. Wilson, 195 Ga. 310 ( 24 S.E.2d 34), after stating that the appointment of a receiver determined no rights between the parties and did not affect title in any way, and further stating that the purpose of a receivership was to preserve the property contested for until a final determination of the questions involved, it was said: "No matter how strong the apparent equity of the complainant may be, if there is no necessity for a receivership, the courts will not change the status until final decree." In the early case of Crawford v. Ross, 39 Ga. 44, this court emphasized the seriousness of interference with the right of the citizen in the appointment of a receiver, and stated that such equitable relief ought to be granted only to prevent manifest wrong. It was further said: "The high prerogative act of taking property out of the hands of one, and putting it in pound, under the order of a judge, ought not to be taken, except to prevent manifest wrong, imminently impending." This language was repeated by this court in Dozier v. Logan, 101 Ga. 173 ( 28 S.E. 612), with the comment that, "If it were possible for the court, as at present constituted, to add anything to the emphasis of this language, it would do so without the slightest hesitation. The appointment of a receiver is recognized as one of the harshest remedies which the law provides for the enforcement of rights, and is allowable only in extreme cases, and under circumstances where the interest of creditors is exposed to manifest peril." All of this was quoted with approval in Bainbridge Power Co. v. Ivey, 173 Ga. 18 ( 159 S.E. 660). The legislature gave recognition to the seriousness of appointing a receiver and the need for caution when it adopted the Code, § 55-303, where it is said, "The power of appointing receivers should be prudently and cautiously exercised, and except in clear and urgent cases should not be resorted to." As to the general rule, see 45 Am. Jur., §§ 10 and 16; High on Receivers (4th ed.), § 406; 4 Pomeroy, Equity Jurisprudence (4th ed.), § 1533.
In Stillwell v. Savannah Grocery Co., supra, it was held that no receiver should have been appointed without offering the defendant an opportunity to give bond and security, either for the forthcoming of the property or for the eventual condemnation money. It can not be contended that, where there exists an adequate remedy at law, a trial court can ever be justified in appointing a receiver. If, as contended, the petitioners have a valid lien upon the funds in virtue of the summonses of garnishment, the very statement of this fact is an assertion of the adequacy of a legal remedy. A lien alone, where there is no evidence that the property under such lien is in danger of loss, destruction, or injury, constitutes no reason whatever for the appointment of a receiver for such property.
We can not sustain the contention of the defendants in error that, since Life and Casualty Insurance Company of Tennessee has a claim upon all the property of the defendant, Mrs. Irwin, and the petitioners have a lien upon the funds covered by the garnishment, a receiver should have been appointed in order to enforce the rights of the petitioners provided for in the Code, §§ 28-106 and 37-501, to compel the first lienholder to elect or satisfy his claim out of either the real estate or insurance money, thus leaving the other available to the petitioners. Any such right of the petitioners can be fully protected and enforced without the appointment of a receiver; hence, it constitutes no justification for a receivership. What are the extraordinary circumstances in the present case which the petitioners claim take it out of the general; rule that creditors without a lien may not obtain the appointment of a receiver? The alleged fraudulent conveyance to the defendant corporation would not constitute a ground for the appointment of a receiver, unless it further appears that the property in the hands of the purchaser is in danger of destruction or injury. The proposal of the defendant corporation by its pleadings and the statement in open court remove any reasonable apprehension that any of the property involved would be either destroyed or injured or would not be available for the satisfaction of any judgment which the petitioners may obtain. The offer to give a bond for all the funds involved and to insure the preservation and protection of the real estate, and the defendants' consent to any decree or order of the court except the appointment of a receiver, was as much as could be legally required to prevent the appointment of a receiver. The owner of the property, when thus offering to the court insurance against injury to the opposing party from allowing the owner to retain possession of the property and avoid the expense of a receivership, is entitled under the Constitution and law to be allowed the privilege of retaining the possession of its property and avoid useless expense.
Counsel for the defendants in error have filed extensive briefs in this court, citing many decisions of this and other courts where receivers have been appointed. All of such decisions recognize the general rule, but sustain the appointment of a receiver because of extraordinary circumstances in the case at hand which take it out of the general rule. Necessarily the exceptions to the general rule cause each case to stand upon its own facts and depend somewhat upon the opinion and judgment of the judge to which it is presented as to whether or not it falls under the general rule. Counsel have insisted so strongly that the present case is controlled by the decisions cited that we think it desirable to discuss and distinguish the most important of such cases. In Orton v. Madden, 75 Ga. 83, the general rule was recognized, but it was held that the petitioner, having a laborer's lien upon the property involved, was entitled to a receiver, and that the case did not fall within the general rule as cited in Cubbedge v. Adams, supra. In Albany Renssellaer Iron Steel Co. v. So. Agri. Works, 76 Ga. 135 (2 Am. St. R. 26), the general rule was recognized, but it was held that the case did not fall within that rule because the business was being carried on with goods that had not been paid for, and that the petitioners, not being parties to the mortgages on such goods, would be unable to prevent the foreclosure of the mortgages; and it was alleged in that case that the insolvent debtor had fraudulently transferred the property to one who was in complicity with him in the fraud and he was rapidly disposing of the property. It was further alleged that large supplied of goods were obtained with a view of making the assignment in question to enable the assignee to carry on the business of the assignor for an indefinite time, and that these goods were included in the assignment and in the mortgages made at the same time to the creditors, including the assignee. In Cohen v. Meyers, 42 Ga. 46, it was pointed out that the allegation, that the insolvent debtor had fraudulently transferred his stock of goods to a person who was in complicity with the fraud, and that he was rapidly selling the goods, constituted an exception to the general rule. In Martin v. Burgwyn, 88 Ga. 78 ( 13 S.E. 958), it was held that, where a seller had discovered the fraud and elected to rescind the sale, a receiver was authorized. In Pendleton v. Johnson, 85 Ga. 840 ( 11 S.E. 144), the appointment of a receiver was affirmed, though the petition was brought by unsecured creditors, upon the ground that the fraudulent sales for cash by an insolvent and secreting the money took the case out of the general rule. In Hunter v. Bowen, 137 Ga. 258 ( 73 S.E. 380), the petitioner, being a landlord, had title to the property involved, and for this reason was entitled to a receiver. In Carter v. Johnson, 156 Ga. 207 ( 119 S.E. 22), the petitioner, being the holder of purchase-money notes, had an interest in the property. The appointment of a receiver was affirmed in Goodroe v. C. L. C. Thomas Warehouse, 185 Ga. 399 ( 195 S.E. 199), which was a suit for a tort, upon the ground that the facts and circumstances brought the case under an exception to the general rule. In Jones v. Proctor, 195 Ga. 607 ( 24 S.E.2d 779), the application for a receiver was by a devisee who obviously had an interest in the property, and the property was deteriorating because the executor was without funds with which to protect it. Briarcliff Inc. v. Kelley, 198 Ga. 390 ( 31 S.E.2d 586), merely affirmed a judgment on demurrer where the petition sought other relief in addition to the appointment of a receiver, and that decision did not have the concurrence of all the Justices.
A careful examination of all the authorities cited and the facts and circumstances in the present case convince us that the appointment of a receiver was an abuse of discretion. There was no serious danger of destruction or injury to any of the property involved, and whatever ground for apprehension of danger might have existed, the offer of the owner to give the bond was sufficient to remove it. One of the highest privileges of a citizen is the full enjoyment in conformity with the law of the possession and use of his property. The fact that he might be poor or even insolvent will never justify, without more, a court of equity, before trial and an adjudication of disputed issues in the manner provided by our law, in depriving him of this right and subjecting his property to unnecessary expense. The sole criticism in the petition of the conduct of the lessees since the fire is the allegation that they had failed to exercise the right conferred upon them in the lease to require the restoration of the building. On this point the uncontradicted evidence is the letter by counsel for the lessees to the owner demanding restoration of the building. There is no evidence of the slightest misconduct upon the part of the lessees subsequently to the fire or the remotest danger to their property; hence, there exists no basis whatever for the appointment of a receiver for the property of the lessees.
It follows that the court erred in the appointment of a receiver, and the judgment in case No. 15850 is reversed on condition that the defendant, The Arlington Corporation, give the bond offered in its amendment of February 21, 1947, the bond to be approved by the court, and that the said defendant comply with the other offers made in the said amendment; otherwise, the judgment to stand affirmed. The judgment in case No. 15861 is reversed. Judgment reversed on condition in case No. 15850. Judgment reversed in case No. 15861. Jenkins, Chief Justice Bell, Wyatt, Head, and Candler, Justices, and Boykin, Judge concur.