In re Prospect Worsted Mills

Citations

• 126 F. 1011
• 1904 U.S. Dist. LEXIS 442

Syllabus

<p>1. Corporations — Pledge of Credit — Directors.</p> <p>The treasurer and directors of a corporation have no authority to pledge the corporation’s credit for the price of goods sold to another corporation.</p> <p>2. Same — Indorsement of Paper — Want of Consideration — Indorsees— Knowledge.</p> <p>Where a corporation indorsed a note given by another corporation by an indorsement which ordinarily implied a consideration, but no value was in fact given, and the indorsee had knowledge of such fact, the Indorsing corporation was not liable thereon.</p> <p>12. See Corporations, vol. 12, Cent Dig. § 1831.</p> <p>8. ■ Same — Ratification.</p> <p>Where the wife and daughters of the president of a corporation held stock therein, the consent of such female stockholders to an accommodation indorsement by the corporation of commercial paper given for materials sold to another corporation could not he inferred from the acts of the president and his sons, who conducted the active management of the corporation.</p> <p>4 Same — Guaranty—Rights of Creditors.</p> <p>Where a corporation, by the unanimous consent of its stockholders, guarantied the debt of another corporation for material furnished, the obligation created thereby was subject to the claims of the guarantying corporation’s creditors.</p>