Vassar Foundry Co. v. Whiting Corporation
| Decision Date | 03 November 1924 |
| Docket Number | No. 4039.,4039. |
| Citation | 2 F.2d 240 |
| Parties | VASSAR FOUNDRY CO. v. WHITING CORPORATION et al. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Max Kahn, of Detroit, Mich., for petitioner.
Walter M. Nelson, of Detroit, Mich. (Fred A. Lehmann, Wm. J. Lehmann, and Mark L. Rowley, all of Detroit, Mich., on the brief), for respondents.
Before DENISON, MACK, and DONAHUE, Circuit Judges.
The Michigan statutes (sections 13563 and 13570, C. L. 1915) provide that, if the directors of a corporation shall for any reason deem it beneficial to the stockholders that the corporation be dissolved, they may apply by petition to the local chancery court; that their petition shall show, among other things, all the property and all the creditors; that thereupon an order to show cause is to be made and served upon all the creditors; and that, after due hearing and upon a master's report, if it appears that for any reason a dissolution will be beneficial to the stockholders and not against the public interest, a decree shall be entered dissolving the corporation and appointing a receiver to wind up its affairs, "and such corporation shall thereupon be dissolved and shall cease." Other statutes contemplate that a corporation continues in being for certain purposes even after its corporate life expires, and it has been held that dissolution proceedings under a state statute did not necessarily bar bankruptcy proceedings (Scheuer v. Smith Co. C. C. A. 5 112 F. 407, 50 C. C. A. 312). But the Supreme Court of Michigan, construing these sections 13563-13570, has held that a corporation dissolved thereunder was so completely nonexistent that no suit could be maintained against it. Jacobs v. Bement's Sons, 161 Mich. 416, 126 N. W. 1043. Of course, this decision as to the construction and the effect of a statute must be accepted as obligatory upon the federal courts.
The Vassar Company was dissolved under this statute by an order entered August 23, 1922, upon a petition by all the directors, showing that the company "is unable to meet all of its obligations when due, although it is perfectly solvent in the sense that the value of its assets far exceeds its liabilities," and showing assets of more than $150,000 and liabilities of about $100,000. A receiver was appointed to take possession of all the assets and proceed with the liquidation. On June 25, 1923, the corporation, pursuant to a resolution of the same directors, filed a voluntary petition in bankruptcy and adjudication followed. Later, upon the petition of creditors, the adjudication was vacated. This petition is filed to review the order vacating.
It is first objected that creditors cannot be heard to attack a voluntary bankruptcy. See In re Ann...
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