65 Pa. Super. 333 | Pa. Super. Ct. | 1916
Opinion by
A corporation has the right to acquire stock of its own where the transaction is not prohibited by statute: Dock v. Schlichter, Jute Cordage Company, 167 Pa. 370, and as the assets of the corporation as represented by its capital stock are regarded in the nature of trust funds for the payment of corporate creditors it would follow that a corporation has no power to buy its own stock to the injury
In the present case the transfer of property, for the value of which this suit was brought, was made by the corporation in consideration of the transfer to it of shares of stock held by the defendants and the liquidation of certain claims for services. It does not appear that any creditors existed at the time the transfer was made. It was admitted at the argument that none such now exist nor does it appear that the transfer was made with the intention of placing the property beyond the reach of probable future creditors and from the evidence we conclude that all of the stockholders knew of and consented to the transfer. The division of the property and the withdrawal of the two defendants as stockholders was occasioned by dissatisfaction with the conduct of the company’s affairs. It was a purely private corporation. The trial judge in his charge to the jury stated that there was no fraud in the transaction. The company still retained a portion of its plant and all of its contracts, which were apparently profitable, and con
The judgment is reversed and directed to be entered for the defendants on their motion for judgment non obstante veredicto.