Biddle Purchasing Co. v. Port Townsend Steel Wire & Nail Co.

Citations

• 16 Wash. 681
• 48 P. 407
• 1897 Wash. LEXIS 377

Syllabus

<p>INSOLVENT CORPORATIONS —PREFERENCES — MORTGAGES—PLEADING — AMENDMENT.</p> <p>A mortgage given by an insolvent corporation must be held to be a fraudulent preference, although given for an antecedent loan contracted prior to its insolvency and under an agreement made at the time that a mortgage should be subsequently given, if the loan were not speedily paid, when such agreement does not constitute an en-forcible contract.</p> <p>The refusal of the court to permit an intervenor in an action for foreclosure to file an amended cross-complaint setting up fraud as to creditors in the execution of mortgages by an insolvent corporation is not prejudicial, when the cause has been tried and determined on that issue, and a receiver appointed for the corporation charged with the duty of administering its property as a trust fund for the benefit of all the creditors according as their rights therein may appear.</p> <p>A mortgage given by an insolvent corporation for an antecedent debt for the purpose of constituting a voluntary preference to the mortgagee is void as to creditors.</p>