Addison v. Pacific Coast Mill. Co.

• Decision Date: 26 March 1897
• Citation: 79 F. 459
• Parties: ADDISON v. PACIFIC COAST MILLING CO. et al.
• Court: United States Circuit Court, District of Washington, Northern Division

79 F. 459

ADDISON v. PACIFIC COAST MILLING CO. et al.

United States Circuit Court, D. Washington, Northern Division.

March 26, 1897

Fairchild & Bruce, for petitioner.

Kerr &amp McCord, for receiver.

HANFORD District Judge.

Having considered the evidence and arguments for and against the claims of Evelyn Ayerst, to establish a preference right against the assets of the insolvent corporation, the Pacific Coast Milling Company, as the assignee of her father, E. A Ayerst, which petition sets up a lien upon the lumber and manufactured product of the company's mill, for wages alleged to have been earned by E. A. Ayerst during a period of eight months immediately preceding the appointment of a receiver herein, I find that the assignor, E. A. Ayerst, is the real party of interest in prosecuting this claim. Whatever their respective rights may be as between themselves, the petitioners cannot claim, against creditors of the insolvent corporation, any rights superior to or different from those which her father himself might assert. The testimony is altogether too vague and indefinite, as to any actual consideration for the assignment of the claim, to entitle this petitioner to any particular favor as a bona fide purchaser of the claim.

Touching the merits of the claim, the facts, as disclosed by the evidence, are that E. A. Ayerst was one of the principal promoters of the milling company, and, upon the incorporation of the company, he received one-half of its capital stock, of the par value of $25,000, and that his entire contribution to the capital of the corporation, other than his services as an officer and manager, was only $5,000. It is claimed that the stock was issued as full paid-up stock, in consideration for the mill and manufacturing plant, the title to which was transferred to the company. As against creditors however that transaction cannot be sustained in a court of equity. The mill was purchased from the Pacific Coast Trading Company for $13,500, and paid for by a first mortgage to the Bennett National Bank, for $8,500, and a second mortgage to the vendor, for $5,000; and the only payments on account of these several mortgages were made out of the earnings of the mill. It is shown that a large amount has been expended in betterments and repairs and the acquisition of new machinery but the testimony fails to show that Mr. Ayerst made any contribution towards payment for the betterments, repairs,...