Court Opinion

ID: 8821542
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:34:39.724012+00
Date Added: 2024-06-11T17:04:39.160261
License: Public Domain

WARD, Circuit Judge
(dissenting). No more important corporate question can arise than whether a company against which a petition in bankruptcy has been filed shall resist or consent to an adjudication. It is quite inconceivable to me that the president by virtue of his office can commit the coxnpany either way, more especially in a case like the present, where he is one of four directors who are equally divided in opinion and who own the whole capital stock of the company in equal shares. The attitude of the company is to be determined by the board of directors and when the board of directors is equally divided the company can neither resist nor consent to an adjudication. Therefore I think the motion to strike the answer and the appearance of attorneys in support of it from the files of the court as unauthorized by the company should have been granted. This would have left the court under section 18e of the. Bankruptcy Act (Comp. St. § 9602) either to make an adjudication as upon default or to dismiss the petition, if a.ny fatal legal defects appeared on the face of it. The court below did not know, and we do not know, which of these contesting parties was right. The question was purely one of law, and it seems to me that a practice is approved which may hereafter lead to dangerous consequences.