Hirschfield v. The Reading Finance and Securities Company
| Decision Date | 14 February 1912 |
| Citation | 82 A. 690,9 Del.Ch. 344 |
| Court | Court of Chancery of Delaware |
| Parties | JULIUS J. HIRSCHFIELD, v. THE READING FINANCE AND SECURITIES COMPANY |
PETITION FOR POSSESSION OF BOOKS OF A CORPORATION. There are two conflicting applications pending before the Chancellor by which the ownership of the books and papers of The Reading Finance and Securities Company is claimed, one by the corporation and the other by the Citizens' Life Insurance Company of America. The Reading Finance and Securities Company has heretofore been adjudged by this Court to be insolvent, and receivers for it have been appointed, and by order of the Chancellor all the property of the company and all its books, etc., were delivered to the receivers. Subsequently all its affairs were fully administered by the receivers, the property sold, collected and converted, and the proceeds paid over to its creditors, and the only now remaining duty of the receivers is to hold the books and papers of the company which so came into their possession until the conflicting claims thereto are settled. At the sale by the receivers they sold the then remaining and unconverted property and assets of the company in three lots, all of them being purchased by the Citizens' Life Insurance Company of America, one of the petitioners, and the chief creditor and these lots were described as follows:
(1) Claims for amounts due subscriptions to the capital stock of The Reading Finance and Securities Company, and notes given for the same.
(2) Claims for amounts due for subscriptions to the capital stock of the Citizens' Life Insurance Company of America, and notes given for the same.
(3) All other debts due and property of the Reading Finance and Securities Company remaining in the hands of the receivers.
Robert H. Richards, for the petitioner, Citizens' Life Insurance Company.
Saulsbury Ponder & Morris, for the petitioner, The Reading Finance and Securities Company.
By its application the purchaser asserts its knowledge prior to the sale that the receivers had the books and papers of the company, and that it is necessary that the petitioner should have them to enable it to realize on the claims mentioned in lots numbers one and two above mentioned, by suits and in other litigation pending. These allegations are not denied by the insolvent company, but the latter asserts that the books were delivered to the receivers to enable them to administer the affairs of the insolvent company and as that purpose has been concluded, the books and papers are the property of the company and should be returned to it; and it is further urged that the books are not property, the ownership of which this Court has power to decide. It is correctly urged by counsel for the insolvent company that it was not dissolved by the appointment of the receivers. It is also probably true that some of the books contain evidence of its organization and continued corporate existence; but to urge further that to deprive it of these books and papers would in effect work a dissolution of the company, is an untenable conclusion....
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