Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/687

 CHAP. XI.] CORPORATION AND CREDITORS. [§ 668. such a fund, it is clearly held in trust for the benefit of one creditor just as much as another, 1 and to prefer one creditor to another is evidently beyond the authority of the trustee. This view is well supported by authority. 2 Thus a deed of general assignment to trustees to procure a loan, and then to pay certain debts of the corporation (a bank), and then others pro rata, the trustees receiving large salaries for their services, has been held void as against a non-consenting creditor. 3 Still there is no doubt that an insolvent corporation, unless forbidden by stat- ute, may make a valid assignment for the benefit of its cred- itors; 4 and a number of cases have held that an insolvent corporation may make such an assignment with preferences. 5 1 Dabney v. Bk. of S. Caro., 3 S. C. 124; Cook v. Moody, 18 Wash. 114. This doctrine repudiated in Mis- souri. Schufeldt v. Smith, 131 Mo. 280. 2 Rouse v. Merchants' Nat. Bk., 46 Ohio St. 493; Lang v. Dougherty, 74 Tex. 226; Robins v. Embry, 1 Sm. & M. Ch. (Miss.) 207, 258 et seq.; Bod- ley v. Goodrich, 7 How. 276; Swep- son v. Bk., 9 Lea (Teun.),713; Ford v. Bank, 87 Wis. 363; Biddle Pur. Co. v. Steel Co., 16 Wash. 681; Conno- ver v. Hull, 10 Wash. 673; Compton v. Schwabacher, 15 Wash. 306; Trades- man Pub. Co. v. Wheel Co., 95 Tenn. 634; Hardware Co. v. Mfg. Co., 86 Tex. 143; Cook v. Moody, 18 Wash. 114; Van Brocklin v. Queen City Printing Co., 19 Wash. 552; Stough v. Ponca Mills Co., 54 Neb. 500. (Court in part relied on certain stat- utes limiting the powers of corpora- tions and those given them in ena- bling acts. ) A creditor cannot secure any advantage by attaching the funds of an insolvent corporation which has ceased to do business. Shoe Co. v. Thompson, 89 Tex. 501 ; Carriage Co. v. Grain Co., ib. 511. Semble contra, Ballin v. Bank, 89 Wis. 278. See Ford v. Hill, 92 Wis. 188; Hightower v. Mustian, 8 Ga. 506; Marr v. Bk. of West. Tenn., 4 Cold w. (Tenn.) 471; Richards v. New Hamp. Ins. Co., 43 N. H. 263. Certain corporations, as, e. g., national banks, are expressly forbidden by their constitutions to make preferences after or in contem- plation of insolvency. U. S. Rev. Stat., § 5242. When an insolvent national bank is making illegal preferential pay- ments, a court will appoint a receiver at the suit of a depositor. Irons v. Manuf'rs Nat. Bk., 6 Biss. 301. A statute forbidding corporations to make assignments in contemplation of insolvency does not impose on the directors the duty of taking active measures to see that no creditor, by superior diligence in suing, obtains a preference over others. The statute calls for no affirmative action on the part of the corporation, nor need the insolvent corporation defend a suit against itself in order to defeat a preference. Varnum v. Hart, 119 N. Y. 101. See French v. Andrews, 145 N. Y. 441; Lopez v. Campbell, 163 N. Y. 340. 3 Bodley v. Goodrich, 7 How. 276. Compare Age-Herald Co. v. Potter, 109 Ala. 675. 5 For note 5 see page 668. 667
 * For note 4 see page 668.