Case ID: pa_198/html/0446-01.html
Source: Caselaw Access Project
Author: {"author": "Peb Cum am,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hill v. Standard Telephone Manufacturing Company.
    
      Corporations—Directors—Preferring director's claims.
    
    Where directors of an insolvent corporation of whose insolvency they are aware, procure the transfer to themselves of all the tangible and valuable property of the corporation, in partial satisfaction of their debt, they hold such property in trust for the benefit of all of the creditors, if no circumstances exist which would make it just and right that they should be preferred to other creditors.
    Argued Jan. 18, 1901.
    Appeal, No. 254, Jan. T., 1900, by defendants, from decree of C. P. No. 4, Phila. Co., Dec. T., 1897, No. 522, on bill in equity in case of Myron F. Hill v. The Standard Telephone Manufacturing Company and George F. Payne and Charles G. Wetter, copartners, trading as George F. Payne & Company.
    Before McCollum, C. J., Fell, Bbown, Mestbezat and Potteb, JJ.
    Affirmed.
    Bill in equity to have a trust declared as to the assets of a corporation in the hands of directors. Before Audenbied, J.
    ■ From the record it appeared that on May 23, 1899, Myron F. Hill, the plaintiff, recovered a judgment against the Standard Telephone Manufacturing Company for $652.52, on a suit which lie had instituted on December 21, 1897, to recover for salary due to him as electrician. The defendants were stockholders and directors of the Standard Telephone Manufacturing Company, and prior to December 28, 1897, had advanced to the company $36,667.23. These advancements had been made without any stipulation for security. At a meeting of the stockholders on December 31, 1897, the directors of the company were authorized to confess judgment in favor of defendants, and to make payment upon the debt to them of all of the property of the corporation. Subsequently the directors authorized the bill of sale and assignment of the company’s property to the defendants. This bill of sale and assignment were subsequently executed. The court in an opinion by Aubenbied, J., entered a decree declaring defendants trustees of the property transferred to them for all the creditors of the Standard Telephone Manufacturing Company, and ordered defendants to file an account as such trustees within thirty days.
    
      Error assigned was the decree of the court.
    
      Robert Alexander, of Alexander Magill, for appellants.
    
      Reynolds D. Brown, with him Malcolm Lloyd, Jr., and Charles II. Burr, Jr., for appellee.
    February 25, 1901:
   Peb Cum am,

We are not convinced of error in the conclusions arrived at by the court below. It follows that the decree based on the conclusions must be affirmed and the specifications of error dismissed.

Decree affirmed and appeal dismissed at the cost of the appellants.