Schoenwald v. McDonald

5 Alaska 442
CourtDistrict Court, D. Alaska
DecidedJanuary 3, 1916
DocketNo. 1264—A
StatusPublished
Cited by1 cases

This text of 5 Alaska 442 (Schoenwald v. McDonald) is published on Counsel Stack Legal Research, covering District Court, D. Alaska primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schoenwald v. McDonald, 5 Alaska 442 (D. Alaska 1916).

Opinion

JENNINGS, District Judge.

It will thus be seen that the contest is as to the superiority of right between a foreign receiver and assignee in possession of the debtor’s property in this territory, and a local creditor attaching said property in the courts of this territory subsequent to the said appointment of said receiver assignee.

Plaintiffs’ position substantially,.is this:

(1) That by comity they have a standing in this court;

(2) That by virtue of being assignees and vested with the title, they have a standing in this court.

Defendant controverts both contentions.

1. As to comity: It might be remarked in passing that such a receivership as has here been constituted by the Washington court, to wit, a receivership to extricate from financial embarrassment and difficulties with creditors, a purely private, solvent, corporation, is unknown to the Alaska law, although there seems to be. a statute in the state of Washington authorizing such a proceeding.

I can see no occasion for the application here of the doctrine of comity. As said by Mr. Justice Day, in rendering the opinion of the Supreme Court in Disconto v. Umbreit, 208 U. S. on page 579, 28 Sup. Ct. on page 340 [52 L. Ed. 625] :

“The doctrine of comity has been the subject of frequent discussion in the courts of this country when it has been sought to assert rights accruing under assignments for the benefit of creditors in other states as against the demands of local creditors, by attachment or otherwise in the state where the property is situated. The cases were reviewed by Mr. Justice Brown, delivering the opinion of the court in Security Trust Co. v. Dodd, Mead & Co., 173 U. S. 624 [19 Sup. Ct. 545, 43 L. Ed. 835], and the conclusion reached that vol[446]*446nntary assignments for the benefit of creditors should be given force in other states as to property therein, situate except so far as they come in conflict with the rights of local creditors, or with the public policy of the state in which it is sought to be enforced; and, as was said by Mr. Justice McLean, in Oakey v. Bennett, 11 How. 33, 44 [13 L. Ed. 593], ‘national comity does not require any government to give effect to such assignment (for the benefit of creditors) when it shall impair the remedies or lessen the securities of its own citizens.’ ”

2. Plaintiffs contend that—

(a) The assignment in question is a common-law assignment for the benefit of creditors;

(b) A common-law assignment for the benefit of creditors good where made is good everywhere.

It seems to be conceded that a safeguard for resident creditors exists in the case of foreign statutory assignments, but its existence in the case of a common-law assignment is denied.

In this connection, then, it is to be considered whether or not this is a common-law assignment.

This court cannot well see how it can be considered a common-law assignment, when it is not shown to have been the act of the company. No resolution of the board of directors authorizing the assignment is shown—nothing to show that it has ever been even discussed at any meeting, or that any meeting of the board was ever held for that purpose, nor that its making has ever been ratified. Only this appears—that the president and some of the directors and the attorneys have informally and individually agreed that the assignment ought to be made. That this would not be sufficient to validate an assignment is well borne out by the authorities.

2 R. O. L. 649: “Unless otherwise provided by statute, the general rule is that a corporate assignment must be executed by the board of directors, or a quorum thereof, at a meeting duly called for that purpose, or be executed by an officer of the corporation, duly authorized by a resolution of the board of directors. The consent of stockholders is entirely unnecessary. It seems that the action of the directors must be joint, and consequently an invalid assignment cannot be later validated by the ratification of a majority of the directors acting individually. It is universally held that the power to assign the property of a corporation is not incident to any corporate office, and an assignment made by any officer without being duly authorized by the board of directors is invalid, and this is true even when the officer assigning owns a large majority of the stock, and is in complete control of the corporation.”

[447]*447See cases cited in notes 5, 6 and 7, particularly Calumet Paper Co. v. Haskell, 144 Mo. 331, 45 S. W. 1115, 66 Am. St. Rep. 425, where the court say:

“ ‘Where a creditor elects to disregard the assignment and attaches the property of the corporation, and thereupon a contest arises between him and the assignee, the question is one which concerns the title of the assignee to the property, and it is properly drawn in question in such a proceeding. It is not a question where, in theory of law, the validity of the assignment is subject to collateral attack. But, if it were, the rule would be the same; since such an assignment is not a judicial proceeding, and in every case where any person asserts rights under it as against a stranger, the burden is upon him to show at least an assignment valid on its face, and the other party may show that it was invalid by reason of extrinsic facts, as that it was unauthorized by a legal meeting of the directors.’ 5 Thompson on Corporations, § 6478. ‘When such an assignment lias not been validated by acquiescence or laclies, it may obviously be impeached, either by creditors or stockholders, on the ground that it was not made by the directors at a meeting duly convened; that is to say, on the ground that it was not made by the board of directors at all, for the acts of the directors are of no validity unless they are regularly assembled and acting as a board, and unless the proper quorum has concurred in the action which is challenged.’ 5 Thompson on Corporations, § 6479; Doernbecher v. Columbia City Lumber Co., 21 Or. 573 [28 Pac. 899, 28 Am. St. Rep. 766].”

In the case at bar there has not even been a resolution of ratification.

It cannot be denied that there is a substantial difference in the respective effects of the two kinds of assignments, but that difference seems to turn, not so much upon the question of the rights of resident creditors thereunder, as upon the question as to whether or not there is any statute or policy in the given state forbidding or regulating such assignments.

The Supreme Court of the United States, in Security Trust Co. v. Dodd, Mead & Co., 173 U. S. 624, 628, 19 Sup. Ct. 545, 546 (43 L. Ed. 835), differentiates as follows:

“The operation of voluntary or common-law assignments upon property situated in other states has been the subject of frequent discussion in the courts, and there is a general consensus of opinion to the effect that such assignments will be respected, except so far as they come in conflict with the rights of local creditors, or with the laws or public policy of the state in which the assignment is sought to be enforced. The cases in this court are not numerous, but they are all consonant with the above general principle [citing authorities].

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5 Alaska 442, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schoenwald-v-mcdonald-akd-1916.