Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1901-01-09
Daily kennebee Journal.
AUGUSTA LOCALS.
$50, 900 INVOLVED.
The Assignccs Of the Richards Paper Co. Win
Their Suit.

The law court has just sent down it's
decision in a case of great importance,
both from the amount and the legal
principles involved, and one in which
the numerous creditors of the Richards
Paper Co. are interested.
On August 90, 1898, Galen C. Moses
of Bath, made an assignment for the
benefit of his creditors to Messrs. SYM
onds. Snow & Cook of Portland, and
on the same day the Richards PAPER
Go. of Gardiner. of which Mr.. Moses
was a director and also treasurer. made
an assignment to Weston Lewis of
Gardiner, and Melvin S. Holway of Au-
gusta.
When the inventories of the Two es-
tatcs were subsequently made up, pulp
supplies and other personal property Of
the Richards Paper Co. were claimed
by the assignees of Mr.. Moses under n
bill of sale which had been given to
him, June Il, 1898, by the directors of
the Richards Paper Co, as security
for the large Indebtedness which he
held against the company.
With the consent of all parties in
tercsted the aSsignees Of the Paper Co.
continued the operations of the mill
and converted all the logs and supplies
into cash. the net amount therefrom
being nearly $50, 600. The assignees then
brought bin in equity in the supreme
court for Cumberland county to re-
cover these proceeds by virtue of the
hill Of sale. but the assignees of the
Richards Paper Co. resisted their claim
end through their counsel, Leslie G..
Cornish and NJ. 5. Holway, contended
that the bill of sale was void because
it was given by the directors to one of
their own number at a time when the
company was nearly insolvent, thereby
working Il fraud upon the other credit
ors of the corporation, and that the
assignces of the company being such
under common law assignment could
raise the point as acting for all the
other creditors.
The case was argued at the July
term. 1900. of the law court, and the
court in an opinion Just announced
have maintained the contention of the
defendants, holding that these funds
are a part of the assets of the Rich
ards Paper Co, and are to be distrib-
uted among the creditors of the COM
pany and not of Mr. Moses.
The following is the rcscript of the
decision:
Cumberland. IS. Joseph w. Symond>
and ais. in eQ. VS.. Weston Lewis and al.
Rcscript, Strout. J. The law does not
permit director of an inSolVcnt corpora
ton to take a conveyance of substantially
all its available assets Ia secure a prior
debt to himself TO the Gc;rimcnt Of credi
tors.
In this case property exceeding 9lG0
belonging to the Richards Paper 90. wa.
conveyed to Mr.. Moses by absolute bill o
sale, but in fact as collateral security fo
Il prc-cXiSting debt to him when the cor
poration was hopccssly insolvent. Thi:
conveyance included all its property eX
Cept its real estate and Il comparatively
small amount of bills receivable. Mr.
Moses was a director ana treasurer of the
company at the time.
The conveyance is void as against cred
itorS Of the corporation.
The proceeds of that property now il
the han,S of defendants. as aSSiGnccS -
the corporation, should he applied to it,
debts. and cannot be held by the plain
tifs. who are aSSiGncrS of Mr.. Moses.
Bill dismissed with costs.