225 F. 750 | 9th Cir. | 1915
(after stating the facts as above). Three points are advanced against the regularity and legality of the adjudication;
(1) That (he bankruptcy proceedings were not authorized by the requisite, stockholders of the corporation.
(2) That the resolution of the board of directors does not meet the requirements of section 3, subd. 5, of the Bankruptcy Act.
(31 That S. A. Moss, being the owner of all the stock, and conducting (he business of the corporation as his own, caused the proceedings in bankruptcy to be instituted to hinder, delay, and defraud the petitioner, by having her attachment dissolved.
“Any person, except a municipal, railroad, insurance or banking corporation, shall be entitled to the benefits of this act as a voluntary bankrupt.”
This extends to a corporation of the kind of the present bankrupt the same privilege of becoming a voluntary bankrupt as' to an individual, and there exists no good reason why it may not become such a bankrupt in the same way. It is only necessary for such a petitioner, praying adjudication, that he show that he owes debts which he is unable to pay in full, and that he is willing to surrender his property for the benefit of his creditors. Hughes, Fed. Procedure (2d Ed.) 99, 100. The allegation or admission is practically the same in either event, but the procedure is different. In the one case, the admission constitutes an act of bankruptcy, and the creditors, basing their petition upon the act, proceed as if the case were one of involuntary bankruptcy; while, in the other,,the action is purely voluntary, and the bankrupt proceeds on his own motion and initiative. Now, the resolution of the board of directors clearly authorized the cashier, treasurer, and bookkeeper to prosecute in the name of the corporation a petition in bankruptcy to final discharge, which was amply sufficient to authorize the bankrupt to proceed as a voluntary bankrupt to obtain a discharge from its debts in the bankruptcy court. The second contention is therefore not maintainable.
The order of the District Court in sustaining the demurrer and dismissing the petition for vacation of the adjudication will bp affirmed.