Case Name: The Star Hardware & Supply Co. v. The Toledo Steel Castings Co. et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1914-03-31
Citations: 90 Ohio St. 171
Docket Number: No. 13697
Parties: The Star Hardware & Supply Co. v. The Toledo Steel Castings Co. et al.
Judges: Nichols, C. J., Shaucic, Tohnson, Donahue, Wanamaker and Wilicin, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 90
Pages: 171–171

Head Matter:
The Star Hardware & Supply Co. v. The Toledo Steel Castings Co. et al.
Corporations—Insolvency—Directors hold property in trust—Cannot assign property to secured creditors—Rights of unsecured creditors.
(No. 13697
Decided March 31, 1914.)
Error to the Circuit Court of Lucas county.
Mr. Orville S. Brumback, for plaintiff in error.
Mr. Ben W. Johnson, for defendant in error.

Opinion:
By the Court.
The directors of an insolvent corporation hold its property in trust for the bendit of all its creditors, and have no authority to transfer, sell and assign all of the property of the insolvent corporation to its secured creditors in satisfaction of their claims and liens, regardless of the -ights of unsecured creditors, but must proceed to wind up the affairs of such- corporation and apply all of its property and assets to the payment of its debts in the order of their priority according to law.
Judgment reversed.
Nichols, C. J., Shaucic, Tohnson, Donahue, Wanamaker and Wilicin, JJ., concur.