The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1897-01-13

An important opinion was handed
down by the supreme court yesterday
in The case Of the Wyeth Hardware
and Manufacturing company, a cor
poration, appellant, vs. the James
Spencer Batennan company. corpora
ton, and George Il. Horne, assignee,
in which the rights of corporations 10
prefer creditors in making assign
ments is involved.
The defendant corporation. on June
q. 1895. declared itself insolvent and
assigned TO George h. Horne for the
purpose OF paying the claims of It's
creditors In rne deed Of assignment
the claims of certain creditors are
preferred over that of the pl2lntlM and
required To be paid in the order Of
preference indicated. The plalntln
prayed that a receiver be appointed,
that the deed Of assignment be set
aside, and that the assets of the cor
poration be distributed pro rata among
its creditors.
The defendants interposed demur-
rers on the grounds thar there was
misjoinder of parties; that several
causes of action have been imprOpel y
united, and that the complaint does
not state a cause of action. The de-
murTers were sustained and the plain
tiff electing to stand on its complaint,
judgment Of dismissal was entered,
from which the plaintiff appealed.
The opinion, which is very long and
exhaustive, says in part: The ina
pOrtant question presented is whether
an insolVent corporation in the state
has power in the disposition of its
corporate property to prefer by deed
Of assignment one creditor or class OF
creditors over other creditors whose
claims are equally meritorious.
Upon careful examination of ad-
judged cases. as well as upon princi-
pie and analogy, and IN the absence
Of inSOlVent laws aud statutory re-
strictions, we feel ourselves bound 10
hold that a corporation in this state
has the same power TO prefer credit
ors by deed of assignment or other
wise as a private debtor has, so long
as its assets have not been taken into
possession by . court of equity in
proper proceedings at the instance of
a proper party. The rule in the case
of corporation. the same as in that
of an Individual, is impregna bic, ex-
cept by legislative enactment. This
also appears to be in harmony with
the English rule, for there the power
OF corporation to prefer creditors
seems 10 be fully established, except
as restricted by statute.
While we are not disposed 10 en-
large the rule SO as to include cases
not strictly within its terms, yet where
il is applicable. as in the case at bar,
1t must be regarded and upheld as a
law of this state no longer oper to
question. Whether if we were free
from the authority of judicial de-
cisions, we would entertain different
views from these herein expressed, is
now & matter of 30 concern. It is bat
for US TO declare what is the law, and
if such law is not in cons0nance with
reason and justice, it is within the
power of the legislature TO make il SO.
A court ought not for light reasons
TO assume TO declare that not to be the
law which has been accepted and
treated as the law by courts as we'll
as the pOpulace for a long period Of
time. not even though such court may
feel impelled 10 inveigh against the
rule as not founded in the soundest
reason and policy.
Especially is this so when such law
has become the rule of practice in the
business world and when the business
interests of the state have grown up
under IT,
The Judgment of the court below
is affirmed"
The opinion was written by Justice
Bartch and concurred IL by Justice
Miner and Chief Justice zane in the
aTirmance of the judgment. but not
in all the propositions Of law held in
the opinion.