Court Opinion

ID: 6532061
Source: CourtListenerOpinion
Date Created: 2022-07-19 20:20:12.910165+00
Date Added: 2024-06-11T15:54:47.704556
License: Public Domain

OVERFIELD, District Judge.
Upon these facts the contention is made by the defendant that under the reply neither lack of consideration nor fraud can be shown; and, secondly, that this court has no right or jurisdiction to question the cancellation of the notes made by the Tanana Railway Construction Company, for the reason that the receiver of the plaintiff corporations in this court had no jurisdiction outside of the territory of Alaska, and hence cannot question the acts of the corporation at its domicile, the state of Washington, in this suit.
Passing to the second question, a decision of which will, I believe, settle the issues in this case, we find an attempted act on the part of the board of trustees of one of the insolvent corporations, then under receivership by order of this court, with a regularly appointed and qualified receiver, to dissipate a part of the assets of the corporations, without request or permission from this court or its receiver.
The question at once arises fairly on the issues in this case: How far can an insolvent corporation, under a receivership in the courts of Alaska, manage, control, and dispose of its assets and property? Where does the power of the board of trustees of the Tanana Railway Construction Company to dispose of its property and assets, after they have been placed in the custody of the law, by order of this court, end, and *73where does the power of the court’s receiver begin? Admittedly when the receiver of the corporations was appointed by this court, and he duly qualified, he then, subject to the control of the court, took the legal control and possession of all the property and assets of the two corporations, with such exceptions as are allowed by law.
Notice to each and every officer, as a trustee and stockholder, was legally given of such receivership of that date, namely, October 23, 1908. At that time the two notes given by the defendant Stewart to' the Tanana Railway Construction Company, to cover his indebtedness to the two corporations, incurred while he was an officer of the corporations, at Seward, Alaska, was the property and asset of the insolvent corporations. The fact that these notes were given in-Montreal does not, in my opinion, change the nature of the asset; nor does the fact that the payment of the notes might be inferred to be in Montreal in any way lessen the liability of the construction company to account to the receiver of this court for such asset. But it does appear that the officers, through the board of trustees of the Tanana Railway Construction Company, did attempt to dispose of these notes, after due notice of the receivership in this court, and that such attempt to so dispose of these notes was without the authority, sought or received of this court, or its receiver.
And the evidence further shows that the cancellation by the board of trustees of the said corporation of these notes was upon the condition and for the consideration of $6,000 paid to some third party, one A. G. Frost, who in turn employed the same, but without authority or ratification by the receiver, in looking after and protecting the property and assets of the Tanana Railway Construction Company, then in the possession and control of said receiver. Such an attempted act on the part of said board of trustees to dispose of the assets of the corporations insolvent, and under the receivership in this court, and admittedly of the assets of the corporation arising within this territory, and which should have been delivered to the receiver at the time he qualified in his office, was, to say the least, such an action as constitutes a contempt of this court, *74and might have properly been so considered by the receiver, had he been aware of the said resolutions of the board of trustees, with respect to the cancellation of these notes before he bega'n this action.
The receiver plaintiff in this action represented each arid every officer as a trustee and shareholder of these corporations as an officer of this court, and it was his duty to collect all the assets belonging to or in any way affecting these corporations, and neither the trustees, stockholders, nor officers of these insolvent corporations had neither right nor power, under the law, to in any way cancel or dispose of the property or assets of such corporations, except by and through the authority, permission, and ratification of this court. To permit such an action as here attempted on the part of the board of. trustees would be legalizing their efforts to dispose of the assets of a corporation then under receivership and to disregard the very object of the appointment of receivers of insolvent corporations.
As to the contention first above mentioned that neither lack of consideration nor fraud could be shown under the pleadings, I think it is sufficient to say that the answer of defendant allows the plaintiff, under his reply, to show anything that defeats the defendant’s plea. I can see no grounds for the defendant to complain; there being no departure or other defect for which the defendant, at this stage of the pleadings, could find objections.
The decree of this court, in cause No. 343, above referred to, found the Tanana Railway Construction Company an agent of the A’laska Central Railway Company, and that all the property and assets of the former belonged to the latter corporation at all the times herein mentioned.
Under the facts the defendant has failed to prove such a payment as relieves him of his duty to account to this plaintiff, and judgment must be entered accordingly; but, that justice and equity may prevail, it is hereby ordered that the defendant Stewart may, within 30 days from the date hereof, file his counterclaim, if any such he has, to set up any just amounts *75he may be found entitled to offset against the judgment herein rendered; otherwise the said judgment herein shall become final.