Court Opinion

ID: 8805424
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:46:34.829056+00
Date Added: 2024-06-11T17:04:04.858128
License: Public Domain

WALKER, Circuit Judge
(after stating the facts as above). [1] The Texas statute provides that “a corporation is dissolved * * * where four-filths in interest of all the stock outstanding shall vote in favor of a dissolution at a stockholders’ meeting called for that purpose” in a manner prescribed by ihe statute, and a prescribed certificate showing such action is filed with the Secretary of State. Revised Statutes of Texas (1911), art. 1205. The two articles of the Revised Statutes immediately succeeding the one just cited are the following:
“Art. 1206. Upon the dissolution of any corporation, unless a receiver is appointed by some court of competent jurisdiction, the president and directors or managers of the affairs of the corporation at the time of its dissolution, by whatever name they may be known in law, shall lie trustees of the creditors and stockholders of such corporation, with full power to settle the affairs, collect the outstanding debts, and divide the moneys and other properly among the stockholders, after paying the debts due and owing by such corporation at the time of its dissolution, as far as such money and property will enable them after paying all just and reasonable expenses; and to this end, and for this purpose, they tnay, in the name of such corporation, sell, convey and transfer all real and personal property belonging to such company, collect all debts, compromise controversies, maintain or defend judicial proceedings, and to exercise the full power and authority of said company over such assets and properties; and the existence of every corporation may be continued for three years after its dissolution from whatever cause for the purpose of enabling those charged with the duty to settle up its affairs; and, in caso a receiver is appointed by a court for this purpose, the existence of such corporation may bo continued by the court so long as in its discretion it is necessary to suitably settle up the affairs of such corporation.
“Art. 1207. The trustees mentioned in the preceding article shall be severally responsible to the creditors and stockholders of such corporation to the extent of its property and effects that shall have come into their hands.”
*656If the allegations of the petition showed the making by the corporation of a general assignment for the benefit of its creditors, an allegation of the corporation’s insolvency was superfluous. Bankruptcy Act, § 3, subd. a (4), as amended by Act Feb. 5, 1903, c. 487, § 2, 32 Stat. 797; West Co. v. Lea, 174 U. S. 590, 19 Sup. Ct. 836, 43 L. Ed. 1098; Bryan v. Bernheimer, 181 U. S. 188, 21 Sup. Ct. 557, 45 L. Ed. 814; In re Louis Neuburger, Inc., 240 Fed. 947, 153 C. C. A. 633.
[2, 4] A general assignment, within the meaning of the cited provision of the Bankruptcy Act, embraces any act by the alleged bankrupt having the effect of a conveyance of all its property and an appropriation of it to raise funds to pay its debts, share and share alike. The name and form which the transaction assumes are not material. In re Thomlinson Co., 154 Fed. 834, 83 C. C. A. 550; In re Utley (D. C.) 235 Fed. 905; 5 Corpus Juris, 1118. The Texas statute (article 1206, supra) gives to the action alleged the effect of divesting the corporation of the title to all its property and vesting it in designated persons as—
“trustees of the creditors and stockholders of such corporation, with full power to Settle the affairs, collect the outstanding debts, and divide the moneys and other property among the stockholders, after paying the debts due and owing by such corporation at the time of its dissolution, as far as such money and property will enable them after paying all just and reasonable expenses'; and to this end and for this purpose they may, in the name of such corporation, sell, convey and transfer all real and personal property belonging to such company, collect all debts, compromise controversies, maintain or defend judicial proceedings, and to exercise the full power and authority of said company over such assets and properties.”
We do not think that there is any merit in the suggestion that the transaction alleged was one by the corporation’s stockholders, and was not one by the corporation, because not effected by the officers or agents of the corporation having authority to bind it. An effect of the statute is to make the corporation’s stockholders the agency by which a conveyance or transfer of its property and an appropriation of it to raise funds to pay its debts, share and share alike, are accomplished. The transfer was as effectually that of the corporation as it would have been if made in the name of the corporation, by its officers or agents ordinarily vested with authority to take such action in its behalf. The conclusion is that the transaction alleged had the essential features of a general assignment for the benefit of creditors, within the meaning of the above-cited provision of the Bankruptcy Act. This being so, the Bankruptcy Act gave the corporation’s creditors the right to have it adjudged bankrupt and to have its assets administered by the bankruptcy court, instead of by the trustees'in effect nominated by its stockholders.
[3] As above stated, the appeal is by W. C. Moody, Karl E. Hormann, and Charles T. Boelhauwe, directors. They assign as error that:
“These complainants having duly demanded a jury trial, and an order having been duly entered allowing a trial of this cause by jury, and these complainants having filed an answer in this cause denying the allegations of plaintiffs’ petition herein, the court erred in rendering a decree on demurrer adjudicating Moody-Hormann-Boelhauwe a bankrupt.”
*657The record does not show that appellants -filed any pleading to the petition, except a demurrer. It does show that the alleged bankrupt filed an answer to the petition, denying its allegations and demanding a trial by jury of the issues involved in the cause. The bankrupt is not in this court making complaint of the manner in which the issue of fact it tendered was tried. We are not of opinion that the appellants, who tendered only an issue of law, can here sustain a complaint as to the method of disposing of an issue of fact which they did not raise.
The decree appealed from is affirmed.