228 F. 470 | 8th Cir. | 1915
No. 4292 is a writ of error to review the proceedings at a trial by jury, resulting in a verdict and an adjudication of bankruptcy against the Badders Clothing Company, a Kansas corporation. No. 4293 is an appeal from certain orders in the bankruptcy proceedings, and No. 139 original is a petition to revise in matter of law.
. The petition charged the commission of six acts of bankruptcy. The first five were preferential payments to creditors when insolvent. The sixth was that the bankrupt conveyed, transferred, concealed, and removed, and permitted to be concealed and removed, a large portion of its property with intent to hinder, delay, and defraud its creditors, with averments of details. Since the adjudication may be sustained by a proper charge in the petition and adequate proof at the trial of any one of them, it is enough to say the petition was sufficient as to the sixth, and the proof of it was clear and convincing. By its answer the bankrupt denied insolvency. Solvency when the petition was filed was a complete defense to the sixth charge, but the burden of proving it was on the bankrupt Bankruptcy Act (Act July 1, 1898,.
“A corporation can do and assent to the doing by its officers of only those things which are within the corporate power, while an individual may do anything he pleases. * * * An individual may divert his property in any manner that he pleases, by giving it away, or by selling it for an unlawful consideration, or by concealing it, or doing anything else with it that he pleases. Not so with a corporation. It can do no act prohibited by the terms of its charter or the general law. If the general law prohibits corporations from diverting their assets or property from a use which by the terms of their charter they aro authorized to make of it, any attempt on the part of those in charge of the corporate affairs to divert such assets is ultra vires and absolutely void. Indeed it is not an act of the corporation.”
This ia a revival of an ancient fiction long since discarded. It is equivalent to saying a corporation can do no wrong. But a corporation may be held for a felony by engaging in a conspiracy (Joplin Mercantile Co. v. United States, 213 Fed. 926, 131 C. C. A. 160); assault and battery with a deadly weapon (Railway v. Harris, 122 U. S. 597, 7 Sup, Ct. 1286, 30 L. Ed. 1146); libel (Railroad v. Quigley, 21 How. 202, 16 L. Ed. 73); fraud and deceit, assault and battery, malicious prosecution, nuisance and libel (National Bank v. Graham, 100 U. S. 699, 25 L. Ed. 750); fraud in reports to revenue collector (Salt Eake City v. Hollister, 118 U. S. 256, 6 Sup. Ct. 1055, 30 L. Ed. 176); fraud and deceit (Butler v. Watkins, 13 Wall. 457, 20 L. Ed. 629); boycotting (Hartnett v. Plumbers’ Supply Ass’n, 169 Mass. 229, 47 N. E. 1002, 38 L. R. A. 194); false representation (Dorsey Machine Co. v. McCaffrey, 139 Ind. 545, 38 N. E. 208, 47 Am. St. Rep. 290); false imprisonment (Wachsmuth v. Nat. Bank, 96 Mich. 426, 56 N. W. 9, 21 L. R. A. 278); conspiracy by a bank through its president with a merchant to defraud those selling goods to the latter (Johnston Fife Hat Co. v. National Bank, 4 Okl. 17, 44 Pac. 192). There are many other apposite cases. It would be quite strange to find that a corporation could not commit the wrong involved in the charge before us. The words of the Bankruptcy Act are broad enough to include the corporation here. See sections 1 (19), 3a (1), 4b.
The adjudication in bankruptcy is affirmed; the petition to revise is dismissed.