In re Guanacevi Tunnel Co.
| Decision Date | 09 December 1912 |
| Docket Number | 14. |
| Citation | 201 F. 316 |
| Parties | In re GUANACEVI TUNNEL CO. |
| Court | U.S. Court of Appeals — Second Circuit |
[Copyrighted Material Omitted]
C. L Craig, of New York City, N.Y., for petitioner.
R. P Levis, of New York City (Jas. N. Rosenberg, of New York City, N.Y., of counsel), for respondent.
Before LACOMBE, WARD, and NOYES, Circuit Judges.
This is a petition to revise an order of the District Court denying the application of the petitioner, a judgment creditor, to vacate the adjudication in bankruptcy in a voluntary proceeding and an order staying him from proceeding upon his judgment in the state court until 12 months after adjudication or denial of discharge.
February 15, 1911, Switzer, the petitioner, recovered a judgment in the state court of New York against the Guanacevi Tunnel Company upon which an execution was issued and returned wholly unsatisfied. Thereupon he instituted proceedings supplementary to execution and examined Meloy, the president or acting president of the company, as a witness.
June 21st Meloy, by authority of the board of directors, filed a voluntary petition for adjudication of the Tunnel Company as a bankrupt in the United States District Court for the Southern District of New York. Adjudication followed on the same day, and further proceedings were referred to one of the referees. The bankrupt is a corporation of the state of Arizona, and all its property, real or personal, is in Mexico.
The petitioner contends that the voluntary petition was filed without authority, because he alleges that the corporation is solvent (in the sense of the Bankrupt Law), and because only the majority of shareholders can, by the laws of Arizona, dissolve a corporation prior to the time fixed in the articles of incorporation. We will examine this contention, although we think it is one which a creditor has no standing to make in the case of a voluntary petition. The petition offers to surrender all the company's assets for the benefit of its creditors, and does not ask for the dissolution of the corporation. Only the state of Arizona, which created the corporation, can dissolve it. There is nothing to show what authority is given to the directors by the charter and by-laws. In the absence of any restriction, by statute or by the charter and by-laws, the power of the board to make a general assignment of the property of a corporation which is unable to meet its current obligations for the benefit of creditors or to apply for a receivership is to be presumed. Vanderpoel v. Gorman, 140 N.Y. 563, 35 N.E. 932, 24 L.R.A. 548, 37 Am.St.Rep. 601; Rogers v. Pell, 154 N.Y. 518, 49 N.E. 75. The voluntary petition for adjudication as a bankrupt is tantamount to such proceedings. The petition charges that the corporation is unable to meet its current obligations, which is commercial insolvency. The Bankruptcy Act itself permits any person who owes debts to file a petition to be adjudicated. 'Any qualified person may file a petition to be adjudged a voluntary bankrupt. ' Section 59a.
It is next contended that the District Court for the Southern District of New York was without jurisdiction, because the company had not maintained its principal place of business in New York for the greater part of six months before the filing of the...
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