Mish v. Main

Citations

• 81 Md. 36
• 31 A. 799
• 1895 Md. LEXIS 47

Syllabus

<p>Fraudulent Transfer of the Property of an Insolvent Corporation to the President — Receivers—Replevin—Evidence—Protest by Notary.</p> <p>The directors of a corporation, which was engaged in the manufacture •of bicycles, made a sale of all the property of the corporation to the president thereof, who gave to each director his personal notes, payable in bicycles, for the shares of stock held by the directors respectively, at the rate of twenty per cent, of the par value. Under this arrangement the defendant, one of the former directors, received from the president a number of bicycles which were made from material on hand at the time of said transfer. The defendant knew that the corporation was hopelessly insolvent at the time of the sale of the assets to the president and the execution by him of his notes :so payable in bicycles, in consideration of the defendant’s shares of stock. Plaintiff was subsequently appointed receiver of the corporation, and brought an action of replevin to obtain said bicycles from the defendant. Held, that this transaction, if the above facts were found by the jury, was a mere contrivance to deprive the creditors of the corporation of their rights; that it was the duty of the receiver to avoid and nullify the same, and that the action of replevin was an appropriate remedy.</p> <p>In the above-mentioned action evidence is admissible to show judgments against the corporation and mortgages executed by it, and that the directors knew that the company was insolvent; also to show the value of the property sold to the president, and the inadequacy of the consideration received for that replevied in this case, and that similar transactions had taken place between the president and a director other than the defendant.</p> <p>Where one of the questions involved in the issue is whether a corporation was insolvent or not, evidence of a notary public that he had protested for non-payment commercial paper due by it is admissible.</p>