Manhattan Trust Co. v. Seattle Coal & Iron Co.

Citations

• 19 Wash. 493
• 53 P. 951
• 1898 Wash. LEXIS 417

Syllabus

<p>CORPORATIONS — CAPITALIZATION — FRAUD — MORTGAGES — SALE AS ENTIRETY — CONCLUSIVENESS OF DECREE — PARTIES —PRIORITY OF' CLAIMS — RECEIVERS.</p> <p>The capitalization of a coal mining company at $5,000,000 is not shown to be fraudulent by the fact that the property of such corporation consisted of coal lands purchased by the promoters, of the corporation for a sum less than $100,000, where the grantors did not know the full value of the land and some sold for less than they believed it worth for the purpose of developing that section of the country, and estimates obtained by the promoters showed that there were more than 10,000,000 tons of coal m the land, which could be put on the market at a profit oi from one to two dollars per ton.</p> <p>The fact that the holder of a mortgage covering both real and personal property undertakes to enforce the claim under the mortgage, though the mortgage on the personalty is invalid, is not sufficient to establish fraud on the part of the mortgagee.</p> <p>A mortgage executed by a company while it was solvent is not -fraudulent ’as to general creditors, where there was no fraud in the original incorporation of the company, and the stock was. all issued as fully paid up, the mortgage duly recorded, and the debts of such general creditors incurred long afterwards.</p> <p>A judgment giving priority to the claims of certain general •creditors of a corporation over the holders of bonds secured by .a trust deed executed by such corporation, rendered in an action to foreclose such deed brought by the trustee therein, is conclusive on all the bond-holders, where the trust deed provided that such trustee should be trustee for all the 'bond-holders and have the exclusive right to bring suit on the request of a majority, and that no bond-holder should be entitled to sue without having first requested the trustee to sue.</p> <p>The general creditors at a corporation cannot complain than. ;a decree in an action to foreclose a trust deed ex