Coaldale Coal Co. v. State Bank

Citations

• 142 Pa. 288
• 21 A. 811
• 1891 Pa. LEXIS 735

Syllabus

<p>(a) Holt & Chipman, partners in mining and. selling coal and indebted but not insolvent, formed a corporation as the Coaldale Coal Co., to which they transferred all their property, receiving therefor substantially all the corporate stock. The business of the corporation with others was afterward continued in the name of Holt & Chipman.</p> <p>(b) H. & C., in continuing the business in the partnership name, incurred a large indebtedness and became insolvent. After securing certain creditors by assignments of stock, they made an assignment. Creditors, not secured by stock, subsequently obtained judgment, and levied upon the properly as the property of the partnership:</p> <p>1. The transfer by H. & C. of the partnership property to the corporation was not a withdrawal of it fraudulent as to present or future creditors. It remained subject to their indebtedness in a changed form. Their in-interest in the corporation was represented by their stock, which was as much liable to their creditors as was the property itself before the transfer.</p> <p>2. The preference given by H. & C. to their bona-Sde creditors was not unlawful as to those not preferred. Neither class having a special equity over the other, each must stand upon its legal rights; and the unpreferred creditors were without legal right to levy upon and sell the corporate assets as the property of the partnership.</p>