Court Opinion

ID: 8740974
Source: CourtListenerOpinion
Date Created: 2022-11-26 10:47:46.840634+00
Date Added: 2024-06-11T17:00:24.113364
License: Public Domain

WADDILL, District Judge,
after stating the facts as above, delivered the opinion of the court.
It will not be necessary, in the view we take of this case, to pass upon all of the assignments of error made, for the reason that, if the deed of assignment was valid, then most of the objections urged by the appellants are concluded by that act, and need not be considered. There would be much force in many of the positions taken by the appellants if there was evidence in the record to support their charges, either of fraud or collusion, by and on the part of the company and its officers, with its creditors, to throw it into bankruptcy. This proof is utterly lacking, and no effort apparently was made to sustain these charges, and the record presents a case in which the stockholders and a legal board of directors of the corporation, in lawful meetings assembled, by resolutions authorized its duly-chosen officers to make conveyance of its property for the purpose of meeting its obligations, as far as the same would prove sufficient. The action of the board of directors, and of the stockholders of this company, in the matter of the change of its officers, and the execution of this assignment for the benefit of its creditors, seems to have been lawfully and properly entered into in good faith, with only the appellants, minority stockholders, objecting. The company was apparently in a state of disorganization virtually from the beginning, and with the dissensions in its ranks, the number of lawsuits it had to encounter, its failure to successfully carry on any business should not have been a surprise, even to those most enthusiastic over' its prospects. Conceding the assignment to have been lawfully made, the question presented is an exceedingly simple one, under the bankruptcy law. The bankruptcy act (section 3, subd. 4) makes a general deed of assignment an act of bankruptcy; and this, regardless of whether the makers of the deed are insolvent or not. Indeed, no question under the present bankrupt law has been perhaps so well settled as this; it being the only one thus far, as we recall, that has‘been passed upon by the supreme court of the United States. In re Gutwillig (D. C.) 90 Fed. 475-478; Id., 34 C. C. A. 377, 92 Fed. 337; Lea v. George M. West Co. (D. C.) 91 Fed. 237; Davis v. Bohle, 34 C. C. A. 372, 92 Fed. 325; George M. West Co. v. Lea, 174 U. S. 590, 19 Sup. Ct. 836, 43 L. Ed. 1098.
There was no error in the action of the lower court in referring the case, as it did, to a referee. It is true that many of the questions involved were legal ones, but their correct determination depended upon .the evidence which had to be taken, and, if purely questions of law, the action of the referee was in all respects subject to the control of the court, and its action in first having the reference would afford no *965ground for exception. Upon the filing of an answer to an involuntary petition in bankruptcy, it is quite usual, and in many instances the only -way that the court can proceed, to have one of its referees take the evidence, and report upon the various questions presented, returning to the court the evidence taken for its consideration. This was, in effect, what was done in this case. We find no error in the judgment of the court below, and the same is affirmed.