Acme White Lead & Color Works v. Republic Motor Truck Co., Inc.
| Decision Date | 02 December 1922 |
| Docket Number | 493. |
| Parties | ACME WHITE LEAD & COLOR WORKS v. REPUBLIC MOTOR TRUCK CO., Inc. |
| Court | U.S. District Court — Eastern District of Michigan |
Van Dyke, O'Brien & Wheat, of Detroit, Mich., for plaintiff.
Weadock & Weadock, of Saginaw, Mich., for defendant.
Stevenson Carpenter, Butzel & Backus, of Detroit, Mich., for receiver.
Henry E. Bodman, of Detroit, Mich., for mortgage plaintiff.
Lucking Helfman, Lucking & Hanlon, of Detroit, Mich., for creditor Firestone Tire & Rubber Co.
This is a petition filed by the Firestone Tire & Rubber Company, one of the creditors of the defendant, Republic Motor Truck Company, Inc., for leave to file an intervening petition in this cause. The suit is a typical receivership proceeding in equity commenced by a creditor of the defendant corporation on its own behalf and on behalf of all other creditors who might thereafter join in the prosecution of the suit, alleging the solvency of the defendant; but its present inability to pay its indebtedness by reason of its difficulty in obtaining ready cash for the immediate payment of its debts to its creditors, of whom it is alleged that there are more than 200.
The bill contains the usual allegations of such a bill, relative to the threatening attitude of the creditors, the danger of the dissipation of the assets of the defendant, with the consequent loss of its value as a going concern, if such creditors be permitted to obtain judgments and executions in the usual course in actions at law, and the necessity, in the interest of all creditors, of a prevention of this imminent, wasteful strife and controversy by the appointment of a receiver of the assets of the defendant for the preservation of such assets for the ultimate benefit of creditors, free from the injurious effects of attachments and executions with their resultant interruption of the business of the defendant and damage to the plaintiff and other creditors. It is further alleged that merchandise creditors holding claims in the amount of $600,000 assert priority over the general creditors of the defendant by reason of certain agreements between the defendant and its creditors, and that the rights of the respective classes of creditors can only be properly determined by a marshaling of the assets of the defendant, and an adjudication of the rights of such claimants by a court of equity.
The bill contains also other usual and appropriate averments characteristic of such a bill. The Security Trust Company of Detroit has been appointed receiver, and is in possession of the assets which it is conserving for the benefit of all interested parties in accordance with their respective rights, as the same may be asserted, considered and determined, at the proper stage in the proceedings.
On September 28, 1922, an order was entered herein appointing the standing master of this court a special master in this cause, for the purpose, among other things, 'to receive and take cognizance of all petitions for intervention, to fully examine the same and the reasons therefor, and to report his findings to this court with his recommendations thereon. ' The master was also directed by said order 'to hear and consider all claims against said receivership estate and to take all testimony thereon and report the same with his findings to this court.'
On November 8, 1922, an order was entered requiring creditors to file their claims on or before January 2, 1923, showing any priority claimed, and the basis thereof, and directing the receiver to give notice to all creditors as prescribed in said order. On November 23, the petition under consideration was filed. This petition alleges that certain creditors, including petitioner, agreed among themselves, prior to the commencement of the present suit, that the indebtedness accruing to said petitioner from the defendant after the time of the making of such agreement should have priority over the indebtedness of said defendant to such other creditors, in the event of the liquidation of the said defendant. Petitioner avers that thereafter a claim accrued to it against said defendant on...
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