American Ry Express Co v. Commonwealth of Kentucky
| Decision Date | 21 February 1927 |
| Docket Number | No. 5,5 |
| Citation | 71 L.Ed. 639,47 S.Ct. 353,273 U.S. 269 |
| Parties | AMERICAN RY. EXPRESS CO. v. COMMONWEALTH OF KENTUCKY |
| Court | U.S. Supreme Court |
Messrs. Branch P. Kerfoot, Charles W. Stockton, and K. E. Stockton, all of New York City, for petitioner.
Mr. Frank E. Daugherty, of Frankfort, Ky., for the Commonwealth of Kentucky.
Without opinion the Kentucky Court of Appeals affirmed a judgment by the Harlan circuit court against petitioner and in favor of the commonwealth for the aggregate sum of 44 judgments against the Adams Express Company theretofore granted on account of alleged defaults during 1916.
The Adams Company is a 'joint-stock association,' organized under the laws of New York. For many years it operated as a common carrier of goods in Kentucky and other states and owned therein valuable property essential to the conduct of this business. In Kentucky it owned no other property.
The petitioner is a Delaware corporation, organized under an agreement of the interested parties for the purpose of taking over the business and operating property of all the principal express companies of the country by issuing stock to the several owners. Directly after its organization, and on July 1, 1918, it acquired the entire express business and all property connected therewith of the Adams Company and issued therefor several million dollars of its capital stock. (Like transfers were made by the other express companies.) The seller immediately ceased to operate in Kentucky and the purchaser continued the business. Neither company made any provision for paying the outstanding obligations of the Adams Company contradicted in Kentucky; but the latter held in its treasury at New York the stock received from the purchaser, possessed other valuable property located there, and was solvent.
Respondent claimed that petitioner became liable for unsatisfied obligations of the Adams Company. After a full and fair hearing upon pleadings and proof, the Court of Appeals sustained this theory, but assigned no reason. That court, it is said, determined the same issues as here presented in American Railway Express Co. v. Commonwealth of Kentucky, 190 Ky. 636, 228 S. W. 433, 30 A. L. R. 543, and supported the judgment by an elaborate opinion. But the record now before us fails to show any reference whatever to that opinion when the present cause was decided.
The petition for certiorari affirmed that the cause involved the following questions of constitutional law and because of them asked a review. We go no further than their consideration requires.
(1) Whether it is a lack of due process of law for the Kentucky court to deprive the petitioner of its property on the following assumptions, which are unsupported by the record and contrary to fact: (a) That the Adams Express Company is a corporation; (b) that the state of Kentucky was a creditor of the Adams Express Company on June 30, 1918; (c) that the stock issued to the Adams Express Company was distributed by it among its shareholders.
(2) Whether petitioner is denied the equal protection of the laws by a decision of a state court which holds that a corporation which pays cash for property is a holder for value, but that a corporation which issues less than a controlling interest of its own stock for property is a donee, and takes such property subject to existing claims of the vendor's creditors.
(3) Whether it is lack of due process for the state of Kentucky to enforce a rule that a bona fide purchaser for value of all the Kentucky property of a solvent vendor is liable to Kentucky creditors of the vendor to the extent of the value of the property acquired.
(4) Whether a decision of a state court which is contrary to the common law, and justifiable only as an exercise of the state's police power, can be retroactively applied to affect vested rights.
The grounds upon which the Court of Appeals rested its judgment are not revealed; there was no opinion. Consequently, petitioner's argument, which rests upon alleged assumptions, is impertinent.
The record discloses no ruling that a corporation which pays cash for property holds for value, but if property is acquired by issuing less than a controlling interest of stock it takes subject to claims of the seller's creditors.
As there was no controlling statute, the state court necessarily determined the rights and liabilities of the parties under the general rules of jurisprudence, which it deemed part of the law of Kentucky and applicable in the circumstances. It went no further. No earlier opinion was overruled or...
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