The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1898-12-09
CORPORATION LAM.

A Recent DecisIon Of the " ~ Virginia
supreme Court Of Appfais-Tho Power
20 Make Atslg nrnts Aby Disenss-a.
Ohio Valley Manufacturer: IN the
ease OF Kyle IS. Wagner, the supreme
court OF appeals OF lhe state Of West
virginia recently laid down this propo-
giilon OF law;
THE directors Of corporation IN
.hls state have no power 70 direct the
assignment Of the property owned by
such corporation 20 o trustee for the
uayment OF lts creditors, 40 our statute
provides different mode OF winding
iIp the AFFAIRS OF the corporation and
liaudating It's debts. The statutory
mode Is exclusive.
The court, 1t VIA BE observed, does
not say that q meeting OF the stock
holders OF the corporation could not
make such an assignment. The course
OF reasoning by when the opinion
yeaches the conclusion that the dlrec-
tCrs have no power TO do this Is one
which is applicable to the board Of d.
rectors rather than to the stoclthOld-
ers. The court discusses the implied
mowers OF the directors 40 agents Of the
Stockholders and concludes that among
these powers the power to make q gem
eral assignment for the beneht Of credi-
tors does not belong.
on the other, hand, the court states
IN very positive term that the atatt-
tory mode Of winding up the a1airs Of
the corporation and liquidating Its
debts Is exclusive. II this language Is
10 have Its natural force, the power to
make a,genersl assignment would mot
exist In the stockholders any more than
in the directors II VIII. perhaps; re-
gulre another decision OF the court in
order that Il may be definitely 0scer-
ia!ned whether the stockholders as well
as the directors are prohibited from
making an assignment
II Is a matter OF no little Importance
that the corporations In our state are
virtually to be deprived OF this quick
and speedy method OF reaching an
equitable winding up OF their AFFAIRS
The statutes OF the state which have
been passed OF recent years have put
an end TO the ancient and unfair prac-
lice formerly prevailing, under which
insolvG1t debtors were in the habit OF
assigning their property with prefer
ences, so that the creditors, who were
least entitled to consideration, were the
creditors who received the greater part
OF the money. Under the statutes now
in force, an assignment furnishes an
economical and speedy method Of APP
plying the assets and property Of the
debtor, ratably among his creditors.
The execution OF such an assignment
IS often necessary TO prevent the OBJ
tanning Of unjust preferences by credit
tors with small claims, who can go be
fore justices OF the peace and speedily
obtain judgments and executions.
While the creditors with larger claims
are pursuing a more dilatory pain
through the higher courts, the smaller
claimants, with their quickly obtained
Judgments, could reach complete
satisfaction OF their claims, often leav-
ing little for the judgments OF the
larger claimants to operate upon, When
they are obtal1ed.
Under the threat OF such circum-
stances the debtor makes his assign
ment and puts Mi his creditors upon
the same level. 1t not infrequently oc-
ours that there is scarcely time for so
simple q transaction us the drawing
and recording Of the assignment, be-
fore some adverse lien can be obtained.
TO accomplish, Its object the assign
nent often has TO be made in some
thing Of hurry.
What has been said with respect to
the deslrabIllty Of these assignments,
from the standpoint Of the creditor, re-
--latest OF course, to assignments Dy
debtors who are insolVent, as was the
corpdration In the case above referred
10. II the debtor Is solvent and has
sufficient assets to satisfy all his credl-
tors, II does not make much difference
TO the creditors what method may De
adopted for the administration OK the
assets Indeed, such happily situated
creditors are rarely forced TO take any
nf the steps which the court discusses,
and, II they make choice which IS
slightly out OF legal order, their credl-
tors are very likely to leave them un-
molested.
II the effect OF the courts decision
is TO take from corporations the right
10 make assignments for the benefit OF
creditors whether through their board
OF directors or their stockholders, II be-
comes az once important TO inquire
into the alternative methods. What
can an insolvent corporation do? How
can 1t prevent the petty creditors from
swarming before the Justices ana oo-
tanning judgments ana mus obtaining
preferences? How can 1t insure the
lust distribution Of Its assets among
all its creditors?
The court says that the statutory
method OF winding UP the Affairs OF a
corporation Is exclusive, In the code
OF the state there are two provisions
relating to this subject. One OF these
seems TO be applicable only to SOL
vent corporation, for 1t declares that
the stockholders may divide the prop
erty remaining after the payment Oh
the debts. This is TO be done IN pur-
suance OF q resolution passed by the
stockholders and this resolution IS not
70 be carried into effect until six
weeks notice OF It Shall have been
published, AS soon as the resolution
is passed the stockholders must cause
ample funds to be set apart for the
payment OF all debts, and It is only the
surplus which is to be divided amons
the stockholders. This comfortable
method Is manifestly appropriate TO
the wealthy corporation which has
made as much money as It wants e
make. has got tired OF work ana wishes
to retire into a dlgnified apnthilatlon.
49,
Another method ig provided for less
fortunate corporations. One-thlrd or
more Of the stockholders In one OF these
may apply 70 the court and upon the
proper showing may have a receiver
appointed and may have the afairs OF
the corporation wound up under the
orders OF the court. In view OF the
rules relating to receivers II Is proba-
BILE that the appointment OF a receiver
in the manner EtRReRted would put an