The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-04-24
LOOMS USES AXE
Slices Off 100000 Worth of
Devlin Claims.
Various Companies viii Profit
by the Action.
lie RULES OUT NOTES.
Claims Against Personal Estate
Only, Says Referee.
Illinois Fine of $500 Against
DeVIin DisallOMed.

over 100000 of Indebtedness was
wiped off the records of the Devlin Coal
company, the Mount Carmel Coal COM
! pany and other Devlin corporate by
a decision of N. H. Loomis, special
referee in bankruptcy. handed down to-
day.
These companies are just so much
richer as the result of this discharge
of indebt edl ess.
A large number of notes were execu-
ted by Devlin in behalf of himself and
jointly with certain of his corporations.
He would give a note signed both by
his ersona. signature and that of one
of his companies.
A majority of these were issued
agar st the Devlin Coal company and
the Mount Carmel Coal company the
former having Upwards of $3.50, 900 of
this sort of indebtedr ess against it.
These notes are held to be rightful
anc collecdhIe claims against the per-
SOnaI estate of c. J. Devlin and were
so presented. They were presented,
however, in addition by the holders
against the various companies whose
names had been jointly endorsed by
Devlln. The holders of the notes must
be content with what they can get from
the Devlin estate ard cannot expect to
share in the dividends of the various
companies.
As a result of this decision the Dew
lin Coal company will become a sol
vent concern and should be able to pay
out dollar for dollar. Its liabilities
the trustees by SI55, ,S26. .4S-this is wiped
away by the decision. The company is
credited with assets of 81, ,25I ,054.
A test case was made of Kicker Ma
tional bank which held a note of $4,000
given by pevlin TO the Corn Exchange
National pank of Chicago. 1t " as agreed
that this was typical case of a great
many others which Were penGing-ali of
7ioE Ia f~IIC 1-,fI ~ ~ "A
filed Objection on their allowance by the
referee.
Unless affirmative proof is aGduced
to show that c. ]. Devlin was duthorlz-
ed to make and issue to himself the
written obligations of the various COM
panic S in question the claims presented
must in every instance be- disaIlowed
against the companies involved
The opinion states: Although the
president of a business corporation
may have authority to execute the
notes of the corporation to third per-
sons to pay the debts of the corpora
ton, or TO borrow money for its use, |
he las no authority to bind the cor |
poration by the execution of a note on
behalf of the corporation to himself as
an indiVidI al The illegality OF such |
an obligation is apparent from it's face /
and cannot be enforced even by third
person who has purchased the note IN I
good faith and for value, without hrst
showing that the official who executed
the obligation was authorized by the
rorpo ration to make and issue notes
to himself as IN individual
The decision is one of the most i'm
portant that has been handed down
Dy the special referee on account of the
arge amount of money involved. 1t
may be appealed by the attorneys for
he plaintiff and probably will be.
The assets of the Devlin estate
should prove of ample value to cover
al the obligations incurred by the is
,uance of these notes and their value
should not be disturbed necessarily
oy the decision rendered. 1t is rec
,gnizeda that the holders of the notes
presented them as claims against the
,arious companies simply in order to
,e assured that they were amply pro-
ected against fvery contingency.