144 Mo. 331 | Mo. | 1898
On July 5, 1893, and for some time prior thereto the Haskell Show Printing Company was a corporation organized under the laws of the State of Missouri, and doing business in Kansas City, Missouri. The board of directors of the corporation consisted of five members, viz., W. H. Haskell, W. L. Haskell, G-. C. Wattles, J. P. O’Connell and H. P. Schell, all of whom were stockholders. The corporation being insolvent, and unable longer to continue business, W. L. Haskell and G-. C. Wattles on said fifth day of July,
The court below sustained the validity of the assignment and rendered judgment in favor of the assignee for costs, from which judgment plaintiff appeals.
The case was tried, and is presented here as if the manner in which the assignment was executed and its subsequent ratification by the stockholders of defendant company, were the principal questions involved.
At the close of the evidence, plaintiff asked the court sitting as a jury to declare the law to be that an assignment of the property of the corporation for the benefit of its creditors could only be made by the directions of the board of directors, which the court refused to do, and in so refusing plaintiff insists that error was committed.
"Where there is nothing in the charter or by-laws of an insolvent corporation prohibiting it, the board of directors of such a corporation may make an assign
“Unless otherwise provided by statute, the general rule is that a corporate assignment must be executed by the board of directors, or a quorum thereof, at a meeting duly called for that purpose, or by the president or some other officer of the corporation, as authorized by the directors.” 3 Am. and Eng. Ency. of Law [2Ed.], 24; 3 Thompson’s Commentaries 'on the Laws of Corporations, sec. 3905. “Where a •creditor elects to disregard the assignment and attaches the property of the corporation, and thereupon a contest arises between him and the assignee, the question is one which concerns the title of the assignee to the property, and it is properly drawn in question in such
It is not claimed that the president of the corporation had notice of the meeting held by the two directors at the time the assignment was made, nor was he represented by attorney, nor does the evidence show that the. other two directors, O’Connell and Schell, had notice of the meeting or that they were present on that occasion. It is no excuse to say that the two last named were mere nominal stockholders; they in part composed the board of directors, either one of whom together with those that were present would have constituted a majority of the board. Our conclusion is that the assignment was void for want of authority in the two directors to make it, and that the court erred in refusing to so declare the law.
It may be in a direct proceeding against the stockholders they might by reason of their silence and acquiescence in the assignment, be held to have ratified the same. Bank v. Bank, 107 Mo. 133, but no such rule can be invoked against the plaintiff under the circumstances disclosed by the record in this case. As the attempted assignment was made when only two of the directors
An assignment for the benefit of creditors by an insolvent corporation must be by resolution of the board, and it can not be done by a resolution passed when a minority only of the board of directors are present. R. S. 1889, sec. 2510; Price v. Railroad, 13 Ind. 58. Our attention has not been called to an authority to the contrary, nor do we think any exists unless it be in case such authority is conferred by the charter or by the by-laws of the corporation, and no such authority was conferred by the charter or by-laws of the, Haskell Show Printing Company. As nothing passed to the assignee by virtue of the assignment; and the property was not seized under writ of attachment; and thá garnishee admitted in his answer that certain property of the corporation had been received by him, and he did not discharge himself under sections 5224 and 5225, Revised Statutes 1889, it never became custodia legis, but remained in the custody of the garnishee. McGarry v. Lewis Coal Co., 93 Mo. 237; Bank v. Bredow, 31 Mo. 523; Bigelow v. Andress, 31 Ill. loc. cit. 333; Norvell v. Porter, 62 Mo. 309.
At the time of the assignment, however, the Haskell Printing Company was hopelessly insolvent, had ceased to be a going concern, and all the property which the company then owned it turned over to the defendant Parker, for the benefit of its creditors and stockholders, the effect of which was to transfer it to him as bailee in trust for their benefit. Parker then holds the property as bailee of the corporation for the benefit of its creditors and stockholders, and not as assignee. The question-then is what lien or prior right, if any, plaintiff acquired
The court having acquired jurisdiction of the trustee by reason of the garnishment process we reverse the judgment and remand the cause, in order that the creditors of the printing.company may inter-plead if so inclined, and that the funds in the hands of the garnishee, or which may come into his hands as bailee for said, company, may be distributed pro rata among them.