Source: https://law.justia.com/cases/federal/appellate-courts/F2/207/685/347323/
Timestamp: 2020-01-26 07:53:48
Document Index: 763742345

Matched Legal Cases: ['§ 16', '§ 472', '§ 16', '§ 230', '§ 70', '§ 110', '§ 12']

American Trust Co. v. New York Credit Men's Adjustment Bureau, Inc, 207 F.2d 685 (2d Cir. 1953) :: Justia
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American Trust Co. v. New York Credit Men's Adjustment Bureau, Inc, 207 F.2d 685 (2d Cir. 1953)
US Court of Appeals for the Second Circuit - 207 F.2d 685 (2d Cir. 1953) Argued October 9, 1953
N.Y. Stock Corporation Law § 16, subd. 1, provides in part: "The consent to the execution of [a] mortgage * * * by the holders of not less than two-thirds of the total number of shares outstanding entitled to vote thereon, given either in writing, or by vote at a meeting of the stockholders called for that purpose * * *, shall be required." The statute goes on to provide for the filing of a certificate showing such consent with the filing of the chattel mortgage. New York law interprets this requirement as referring to holders of record. N.Y. Stock Corporation Law § 472 ; Elyea v. Lehigh Salt Mining Co., 169 N.Y. 29, 33, 61 N.E. 992; Vail v. Hamilton, 85 N.Y. 453, 458; In re Henry Harrison Co., D.C.W.D.N.Y., 40 F. Supp. 733. If then the January and December mortgages were consented to by sufficient holders of record, they must be upheld.3
As for the two mortgages of February, 1948, under the principles enunciated above they satisfy § 16, but the unreasonable delay in their filing must invalidate them. N.Y. Lien Law, McK.Consol.Laws, c. 33, § 230; Central Chandelier Co. v. Irving Trust Co., 259 N.Y. 343, 182 N.E. 10; Tooker v. Siegel-Cooper Co., 194 N.Y. 442, 87 N.E. 773; Reynolds v. Webb, Sup., 166 N.Y.S. 668, affirmed 183 App.Div. 915, 169 N.Y.S. 1110; see 4 Moore's Collier on Bankruptcy ¶ 70.81, p. 1416, 14th Ed. 1942. Appellant urges that the delay should not prejudice its claim as against those who became creditors after filing; but the contention is without merit. As we have recently held, Zamore v. Goldblatt, 2 Cir., 194 F.2d 933, certiorari denied Goldblatt v. Zamore, 343 U.S. 979, 72 S. Ct. 1077, 96 L. Ed. 1370, where one creditor represented by the trustee can avoid the mortgage, so may the trustee on behalf of all. Bankruptcy Act, § 70, sub. e(1), 11 U.S.C.A. § 110, sub. e(1); Moore v. Bay, 284 U.S. 4, 52 S. Ct. 3, 76 L. Ed. 133. The February mortgages are therefore void.
This conclusion is fortified by the fact that the bankrupt's certificate of change of name, duly certified by the New York Secretary of State on October 23, 1947, was executed by Sullivan as sole stockholder of record. This is presumptive evidence. N. Y. General Corporation Law, McK.Consol.Laws, c. 23, § 12, subd. 1
"Unless otherwise provided in the certificate of incorporation or other certificate filed pursuant to law, every stockholder of record of a stock corporation shall be entitled at every meeting of the corporation to one vote for every share of stock standing in his name on the books of the corporation."
Appellee urges that since the Trust Co., in its petition for review, did not specify as error the referee's failure to find that Sullivan had record title to the bankrupt's stock, it is now foreclosed from raising this argument. Since the error is plain, we shall nevertheless consider it, in the interest of justice. See 2 Moore's Collier on Bankruptcy ¶ 39.22, pp. 1489-1490, 14th Ed. 1940