Lawndale Sash & Door Co. ex rel. Silverman v. West Side Trust & Savings Bank

207 Ill. App. 3, 1917 Ill. App. LEXIS 514

Opinion

Mr. Justice Dever

delivered the opinion of the court.

2. Fraudulent conveyances — toben sale of business of corporation is valid as against third person becoming creditor of seller. A contract for the sale of the business of a corporation to another corporation entered into between stockholders of the respective corporations holding all of the corporate stock except that held by others for the sole purpose of organizing the boards of directors, under the terms of which the purchaser agrees to take over all of the physical assets of the selling corporation for their then market value, and to pay all debts and receive all accounts receivable, is, where entered into and carried out in good faith, valid as against a third person who becomes a creditor of the seller after the sale. -3. Fraudulent conveyances, § 186* — who is not a creditor. One who leases premises to a corporation is not a creditor of a corporation at the time of the sale of the business of the corporation to another, where there is no rent due under the lease at the time of the sale. 4. Corporations — when evidence is sufficient to show ratification of sale and purchase of business by corporation through stockholders. Evidence held sufficient to show a ratification by the respective corporations of the sale of the business of one corporation to another and of the purchase thereof, effected by stockholders of the respective corporations holding all of the shares of the stock in such corporations, except shares held merely for the purposes of organization of the respective boards of directors. 5. Fraudulent conveyances, § 180* — mho are other persons within statute. The use of the term “other persons” in Rev. St. ch. 59, sec. 4 (J. & A. IT 5870), providing that in every conveyance made with the intent of disturbing, hindering or defrauding creditors or other persons shall be void as against such creditors and other persons, refers to persons having a substantial existing claim against parties or property sought to be brought within the terms of the statute. 6. Fraudulent conveyances, § 15* — when Bulk Sales Act is inapplicable. The Bulk Sales Act [Callaghan’s 1916 St. Supp. If 10021(1) et seq.J has no application where a person is not a creditor at the time the sale of the business of a corporation is effected.