59 F. 869 | 8th Cir. | 1894
This writ; of error was brought mainly for the purpose of presenting the question whether a business corporation, when it becomes insolvent, thereafter holds all of its property
The suit at bar was an action on the official bond of the United States marshal for the district of Kansas, against him and his sureties, for a wrongful levy on the property of Charles R. Miller under a writ of attachment issued by the United States circuit court for the district of Kansas against the Alma Coal-Mining Company. The property in question had been sold by the coal company, prior to the levy, to one J. EL Bailey, and Bailey had sold the same to Charles R. Miller, the defendant in error, who was in possession of the same when the levy was made. The circuit court found, in substance, that the coal company was indebted to Bailey in the sum of $17,500; that the property in question (a large stock of. merchandise) was transferred by the .coal company to Bailey in payment of such indebtedness; that at the time of such transfer
The principal contention of the plaintiffs in error seems to be that the foregoing findings show that the Alma Coal Company was practically insolvent, and for that reason was incapacitated from making the sale to Bailey, because it operated as a preference. But, if this contention was meritorious, is it not obvious that the attaching creditors are attempting to secure a like preference over other creditors of the coal company, and that their effort in that behalf will be successful if they prevail in the present action? If this trust-fund theory is to he adopted to prevent the corporation from granting a preference because of its insolvency, we know of no reason why it should not be invoked to keep attaching creditors at bay, and thus relegate the disposal of the fund, so far as judicial proceedings are concerned, to a court of equity. Vide Hollins v. Iron Co., 150 U. S. 371, 14 Sup. Ct. 127, and Brown v. Furniture Co., 7 C. C. A. 225, 58 Fed. 286, 292.
But we do not find it necessary or proper to express any opinion with reference to the question whether a state of insolvency precludes a corporation from making a conveyance which will operate as a preference, for, even if such was the law, the findings in the present case clearly show that Miller was a purchaser for value, in good faith, and without notice of any defect in Bailey’s title to the property in controversy. It is not contended, as we under