Art Society v. Leader Publishing Co.

60 Pa. Super. 548 | Pa. Super. Ct. | 1915

Opinion by

Kephart, J.,

Where a new company has been formed, taking over the assets of an old company, and a creditor has a claim against the old company, that company should be sued for the claim, and the bona fides of the sale of the assets to the new company worked out through subsequent proceedings. A creditor cannot impeach a conveyance without showing that he has been injured. The mere fact that a corporation disposes of all its assets to another corporation of similar name will not of itself raise a presumption of fraud. Especially is this true when it appears that the stockholders are not the same, and all the debts of the old company had been paid, except the one sued on, and it was not known to exist until two years after the new company had been in business. The idea of fraud is further removed where ample assets came into the old corporation from this conveyance to meet this claim. When the similarity of names appears, particularly where the only distinguishing characteristic is the article “the,” courts will not be slow to seize upon slight evidence of unfair dealing to open up the question of good faith so that the validity of the conveyance as between creditor and purchaser may be determined. There is no allegation of fraud in the case at bar, nor evidence offered to establish fraud in any degree. It does not appear that the stockholders of the new company were stockholders of the old concern. We do not here have the difficulty confronting Mr. Justice Mitchell, in Montgomery Web Co. v. Dienelt, et al., 133 Pa. 585: “Whether the stockholders are completely severed.” If they were not, barring the question of procedure, a different question would arise.

The old company conditionally subscribed to an orchestra, fund for the support of the Pittsburgh Symphony Orchestra. Some time later the stockholders transferred all their stock to one John P. Hunter as trustee. Hunter in turn sold the assets of the old company to the new company and received stock and bonds in payment therefor. He sold the stock shortly after-wards to one of the stockholders of the new company. There was then in his hands, or the hands of the old company, sufficient money from the sale of this stock, and with the bonds, to have liquidated this claim many times over. The mere fact that the officers and stockholders of the new company aided, by acting as officers of the old company, to legally make the transfer would not impeach this conveyance. To subject it to the implication of fraud or unfair dealing, it should appear that these officers and stockholders had such interest in the old company that a creditor could assert their identity, that the property was partly theirs under one name and still theirs under another, so that in fact the transaction was to a certain extent merely a change of name, and the new stockholders were not purchasers for value. The evidence entirely fails to present such case. It shows that the old company was entirely solvent. There were no contractual relations with the new company, nor evidence of the assumption of the debt by the new company. So far as this record is concerned, the old stockholders received all the benefit from the sale and they are not now, nor were they at any time, members of the new company. The evidence presents a plain business transaction with no attempt to conceal any facts or to prevent or evade the payment of any lawful debt. The stockholders of the old company received the benefit of this contract in suit and if it was a matter of public benefit the old company,, which received the bonds and money from the sale, should be held to answer for the debt. As we said before, we feel the appellant’s remedy was against the old company. Its suit in the case at bar was against the new company.

The assignments of error are overruled and the judgment is affirmed at the cost of the appellant.