In re Double Star Brick Co.

• Decision Date: 05 February 1913
• Docket Number: 7316.
• Citation: 210 F. 980
• Parties: In re DOUBLE STAR BRICK CO.
• Court: U.S. District Court — Northern District of California

210 F. 980

In re DOUBLE STAR BRICK CO.

No. 7316.

United States District Court, N.D. California.

February 5, 1913

An application is made by creditors for the vacation of an order adjudicating the Double Star Brick Company a bankrupt. The order was entered January 23, 1912, in an involuntary proceeding, after written admission of insolvency, signed in the name of the brick company by three of its directors, one of whom was also its president, and another its treasurer had been filed. The salient facts may be briefly stated as follows: The brick company was organized as a corporation pursuant to the laws of California on the 15th day of April 1907. Under the terms of an act of the Legislature of California, approved March 20, 1905, as amended (Stats. Cal 1905, p. 493; 1906, p. 22; 1907, pp. 664, 745) it became its duty to pay a license tax for the year 1911. Having failed to make the required payment, its default in the premises was on the 15th day of September, 1911, reported to the Governor by the Secretary of State, and thereupon the Governor issued a proclamation declaring that the corporation's charter would be forfeited unless such license tax were paid by November 30, 1911, which proclamation was filed in the office of the Secretary of State and duly published as required by law. The tax was never paid, and upon the assumption that the brick company had no existence as a corporation on December 23, 1911, when the involuntary petition was filed, or upon January 23, 1912, when the adjudication was made, it is contended that the bankruptcy court was and is without jurisdiction to administer the estate. It should be added that during the year elapsing between the date of the adjudication and the date of this application numerous proceedings had been taken in the administration of the estate, one of which at least was by the trustee against the present applicants, who appeared and submitted themselves to the jurisdiction of the court without objection.

The California statute (St. 1906, p. 24) relied upon, after providing that all corporations shall pay an annual license tax and prescribing the duties of the Secretary of State and the Governor in cases of default, is as follows: 'Sec. 9. It shall be unlawful for any corporation, delinquent under this act, either domestic or foreign, which has not paid the license tax or fee, together with the penalty for such delinquency, as in this act prescribed, to exercise the powers of such corporation, or to transact any business in this state (California), after the thirtieth day of November next following the delinquency. * * * '

Section 404 of the California Civil Code is as follows: 'The Legislature may at any time amend or repeal this part, or any title, chapter, article, or section thereof, and dissolve all corporations created thereunder; but such amendment or repeal does not nor does the dissolution of any such corporation take away or impair any remedy given against any such corporation, its stockholders or officers, for any liability which has been previously incurred.' W. S. Tinning, of Martinez, Cal., and R. C. Porter, of Los Angeles, Cal., for petitioner.

Daniel O'Connell, of San Francisco, Cal., opposed.

DIETRICH, District Judge (after stating the facts as above).

In view of the fact that the applicant has presented his claim and has thus submitted the same to the jurisdiction of this court, and the further fact of his long acquiescence, it is a grave question whether his application does not come too late, and he is not estopped to raise the objection upon which he relies. In re...