Case ID: walker_4/html/0306-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

RICHARDS vs. WRIGHT.
    An assignment for benefit of creditors executed by the officers of a building association in pursuance of a resolution of stockholders passed at a meeting, called “for the purpose of devising a means of winding up the affairs of -ffie association,” is valid.
    Error to Common Pleas No. 1 of Philadelphia County, No. 124 July Term, 1880.
    On January 4, 1879, Henry M. Richards obtained a judgment for $l,4--0.90 against the Girard Mutual Building and Loan Association. On January 27, 1879, a special meeting of the stockholders was held “for the purpose of considering the propriety of winding up the añairsof the association.” At this meeting a resolution was adopted “to wind up the affairs of the association, leaving the plan to be determined upon to an adjourned meeting of the stockholders,” to be held February 10, 1879. At the adjourned mi eting of the stockholders held on February'10, 1879, and assignee for the benefit of creditors was elected by the stockholders, who also passed a a resolution that the proper officers be directed to prepare and sign a deed of assignment to the assignee.” On February 27, 1879, the assignment was executed, and on March 1st, 1879, recorded. On March 3, 1879, an attachment was issued in the case of Richards vs. Association with notice to Joseph S. Wright, as garnishee. On April 4th, 1879, the Board of Directors ratified and confirmed the assignment of February 27, 1879. On the trial of the attachment the Court held that the assignment was valid, and directed a verdict for the defendant. Richards then took this writ of error.
    
      M. H. Stutzbach and A. H. Haines, Esqs., for plaintiff in error,
    argued that the stockholders had n o power to order the assignment, which was void as against the attachment; and cited Angell and Ames on Corporations section 22 1: McCullough vs. Moos, 5 Denio, 575; Buel vs. Buckingham, 16 Iowa, 290; Commonwealth vs. Port Henry Iron Co., 12 Barb. Rep., 62; Fleckner vs. U. S. Bank, 8 Wheaton, 358; Dana vs. Bank of U.S.,5V.AS, 245. The power to order the assignment was in the Directors; Ardesco Oil Co. vs. N. A. Mining and Oil Co., 66 Pa., 382; The ratification was null and void as against the attachment, which had been served thirty-two days before; Johnson vs. Herring, 46 Pa., 415.
    
      Alexander Simpson, Jr., contra,
    
    argued that all the stockholders of the association, including H. M. Richards, were present at the regular meeting of the stockholders on February 10, 1879, at which the resolution to make an assignment was unanimously adopted. It is doubtful whether the Directors have the power to order a general assignment to be made. In re National Savings B. & Loan Asso., 9 W. N. C., 79; Rollins vs. Clay, 33 Maine, 132; Abbott vs. Hard Rubber Co., 33 Barb., 578; Martin vs. Railway Co., 37 Leg. Int., 132; Angell & Ames on Corporations, Sec. 280. The Act of April 12, 1859, P. Laws, 544, sec. 9, expressly gives the power to make an assignment to the stockholders. The ratification by the board, was merely done out of precaution; and related back to the date of the assignment; Gordon vs. Preston, 1 Watts, 385.
   The Supreme Court affirmed the judgment of the Common Pleas, on January 17th, 1881, in the following opinion :

Per Curiam.

The only question on this record is as to the validity of the assignment of the Girard Mutual Building and Loan Association, dated February 27, 1879: This instrument was executed under the corporate seal in pursuance of a resolution of the stockholders adopted unanimously at a meeting regularly called. It is true that the power of managing the affairs of the corporation was by the charter exclusively vested in the Directors; but in this case the stockholders were convened by the Directors, “for the purpose of devising a means of winding up the affairs of the association.” and that which was ordered to be done under this resolution was subsequently ratified by the Board. We can perceive no reason why the ordinary principle should not apply in this case.

Judgment assigned.