223 F. 991 | 6th Cir. | 1915
On a trial to a jury of the issues joined upon a creditors’ petition for adjudication in bankruptcy verdict was rendered by direction of the court, and judgment of dismissal entered accordingly. The case is here on writ of error. Elliott v. Toeppner, 187 U. S. 327, 23 Sup. Ct. 133, 47 L. Ed. 200.
The Dayton Coal & Iron Company was a British corporation, having its home office in Glasgow, Scotland. It was engaged at Dayton, Tenn., in mining coal and making- pig iron. Sir Peter Donaldson, who resided at Glasgow, was the managing director of the company, and there was testimony that he “had control of all the company’s affairs.” He was a member of the Glasgow firm of James Watson & Co., which owned a majority of the stock of the Dayton Company, controlled it and financed its affairs. The Dayton Company maintained an office at Cincinnati, from which the sales and commercial transactions were handled. Mr. Whitaker was assistant to the managing director and the highest representative in the United States of the Dayton Company. He had charge of the Cincinnati office and general supervision of commercial affairs at Dayton. Mr. Miller, of Chattanooga, was the general counsel in the "United States of the Dayton Company and “represented the company in its legal affairs.” Watson & Co. bought pig iron in the United States, and in that relation dealt directly with the Dayton Company. Shortly before June 9, 1913, Watson & Co. failed, and so defaulted on a draft for £4,000 drawn by the Dayton Company upon Watson & Co., and held by the Equitable Trust Company of New York. This failure immediately embarrassed the Dayton Company, which was unable to protect the draft, and the Dayton Company’s bank creditors became insistent. Whitaker cabled the situation to the Dayton Company at Glasgow, asking what advice should be given, and stating that “director must come with full power to act.” Sir W. B. Peat, a member of an accounting firm doing business both in Great Britain and in the United States, was in New York as “the representative of Watson & Co.,” and was slated as liquidator of the affairs of that firm. The Dayton Company cabled Whitaker from Glasgow to go to New York and consult with Peat respecting the failure of the Dayton Company, and, if possible, to take Miller with him. Whitaker was also advised that liquidation could not be avoided, and to pay nothing more without consulting Miller. The latter was unable to> go to New York at the time, but had a conference with Whitaker, and gave his opinion, from, what Whitaker told him,
“Am impressed immediate receivership suit here is best. Wire me your views quickly on arrival and also later after consulting with parties there.”
As to the authority of Whitaker and Miller: It is unnecessary to decide whether either or both had, by virtue alone of their official positions, general authority to act for the corporation in instituting the receivership. Had the general counsel filed such bill in the name of the corporation, his authority to do so would be presumed. Pacific R. R. Co. v. Ketcham, 101 U. S. 289, 296, 25 L. Ed. 932, and we should hesitate to declare, as matter of law, in view of his general relation to the corporation, that he would not have authority to take such action through another medium when acting in the good-faith representation of the corporation’s interests. We think, however, there was testimony tending to show special authority from the Glasgow management for the procuring of receivership. Miller, Whitaker, and Peat were instructed to confer together regarding the course to be talcen. They did so, and acted according to their judgment. True, there is no evidence of an express direction by the Glasgow office of the Dayton
It results from these views that the issue should have been submitted to the jury. The judgment of the district court is accordingly reversed, with costs, and the record remanded to that court, with directions to award a new trial.