79 F. 860 | U.S. Circuit Court for the Northern District of Illnois | 1897
(orally). I have prepared a long finding of facts, which I will not attempt to recapitulate. My conclusion in this case is due to my holding a simple proposition of law, and I can probably state it by a very short résumé of the facts. The complainant is the receiver of a national bank that had a large claim of over $200,000 against a silk company in Connecticut: The silk company itself was in financial difficulties, and was about to fail. • The president of the company, who was also its acting general manager, having beeii elected to that place some two or three years before and not having been re-elected, but continuing to act, came to Baltimore, Chicago, and Yew York, and executed a bill' of sale of their stock of goods in these cities, respectively, to the receiver of the bank. He knew at the time that his silk company was on the point of failing, that an application would soon be made for the appointment of a receiver, and that it would go into the hands of a receiver. Tin; circumstances are such that this discloses a clear case o,f an attempt upon the part of the president and acting general manager of a company that is no longer to be a going concern, but is already an insolvent concern, and is to become a defunct concern, to execute a preference in favor of one of its creditors. I hold that, in the absence of special authority conferred upon the president or general manager for that purpose, by the directors, he has no power to make any such preference. The president and general manager has power to conduct the affairs of the company as a going concern, and do everything consistent with its affairs as a going concern; but, when it comes to preferring creditors of a concern
