Pennsylvania Engineering Works v. New Castle Stamping Co.

Citations

• 259 Pa. 378
• 103 A. 215
• 1918 Pa. LEXIS 421

Syllabus

<p>Corporations- — Receivers—Payments — Losses — Issue of unauthorized certificates — Surcharge—Payments directed by order of court — Subsequent order — Priority.</p> <p>1. Where a business is being conducted at a loss a receiver cannot take advantage of his position and pay himself in full at the expense of other creditors, as his equity is not superior to theirs.</p> <p>2. A receiver may properly he surcharged for the amount paid by him on unauthorized certificates and for the amount expended by him in repayment of money borrowed without authority.</p> <p>3. Where the proceeds of unauthorized certificates and notes went into the business, a receiver surcharged therefor has an equitable claim equal to that of other creditors, but is not entitled to priority.</p> <p>4. An order of court directing a receiver to continue the business, implies the authority tó purchase supplies necessary for that purpose.</p> <p>5. A receiver is not personally liable merely because the business may have been conducted temporarily at a los.s, especially where he acted in good faith and the loss did not result from his misconduct or negligence.</p> <p>6. While a receiver will be held to a rigid accountability, nothing more is required of him than that he act in good faith and exercise the discretion and prudence of ordinarily careful men in pursuits of similar character.</p> <p>7. Where an order of court expressly charges the funds in the receiver’s hands with the payment of authorized certificates, the payment thereof should be made to the holders prior to the receiver’s commission fixed by a subsequent order of court.</p> <p>8. Upon exceptions to the report of an auditor to pass upon the account of a receiver, it appeared that the receiver had continued the business under an order of court, that in some months there were losses and in others profits, but that there was a total loss in the conduct of the'business during the receivership, the auditor found that some of the expense incurr