Fargason v. Oxford Mercantile Co.

Citations

• 78 Miss. 65

Syllabus

<p>1. Corporations. Insolvency. Preferences.</p> <p>An insolvent corporation may in good faith prefer a creditor.</p> <p>2. Same. Banks. Loans in violation of charter.</p> <p>The preference by an insolvent debtor of a debt due a bank is not invalid because the bank loaned him a sum in excess of what it was allowed by its charter to lend to a single borrower.</p> <p>3. Same.. Loans. Borrower's fraud.</p> <p>The fraudulent use by an insolvent corporation of borrowed money, in which the lender did not participate, wiil not invalidate its debt for the loan, and such debt may be preferred in good faith.</p> <p>4. Same. Capital stock. P'ayment for.</p> <p>The capital, stock of a corporation, the charter not providing otherwise, may be paid for in property at its actual value.</p> <p>5. Same. Beginning business. Stock. Payment for same.</p> <p>That a corporation began business, contrary to the provisions of its charter, before a sufficient amount of its capital stock was paid in, does not invalidate its debts, or deprive it of the right to prefer a bona fide creditor.</p> <p>6. Same. Insufficient number of directors.</p> <p>That a corporation carried on its business, contrary to the provisions of its charter, with an insufficient number of directors, does not invalidate its debts or deprive it of the rig-ht to prefer a bona fide creditor.</p> <p>7. Same. Defective organization. Capital stock not paid. Knowledge of preferred creditor.</p> <p>Knowledge by a creditor of the insolvency of a corporation debtor, of its defective organization and that its capital stock had not been paid in does not require that he shall cease to do business with it, or impose on him a duty to warn others selling to it on credit, nor deprive it of the right, in good faith, to prefer such creditor.</p> <p>8. Same. Debts in excess of capital stock.</p> <p>That the debts of an insolvent corporation exceed its capital stock does not deprive it of the power to 'prefer a bona fide creditor.</p> <p>9. Sa