Pangburn v. American Vault, Safe & Lock Co.

Citations

• 205 Pa. 83
• 54 A. 504
• 1903 Pa. LEXIS 520

Syllabus

<p>Corporation — Directors—Confession of judgment to directors — Security for antecedent debt — Priority.</p> <p>Directors of an insolvent corporation, who have claims against the company as creditors, must share ratably with other creditors in the distribution of the company’s assets. They cannot secure to themselves any advantage or preference over other creditors by using their power as directors to that purpose. Their powers are held by them in trust for all the creditors and cannot be used for their own benefit.</p> <p>The directors of a solvent corporation who advance money for the purpose of paying an obligation of the company, without any understanding or agreement that they are to be protected, cannot subsequently, when the company is insolvent, and they have knowledge of the insolvency, take a judgment note from the company for the advances previously made by them, and thus secure priority over general creditors.</p>