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eBook details

• Title: Grice v. Fedex Ground Package System
• Author : In the Court of Appeals of the State of Mississippi
• Release Date : January 04, 2006
• Genre: Law,Books,Professional & Technical,
• Pages : * pages
• Size : 67 KB

Description

Debtor and Creditor — Composition With Creditors — Validity of Agreement — Composition not Assignment for Benefit of Creditors — Corporations — Board of Directors Governing Body — Composition not "Sale" of Corporate Property. Debtor and Creditor — Composition With Creditors — Validity of Assignment of Interest in Property to Trustee. 1. Where the only assets of a mining corporation, indebted to a number of persons, consisted of a sum of money to be paid into a bank under an escrow agreement for its claims and machinery, its assignment of its interest therein to a trustee of its creditors pursuant to a composition agreement under which the trustee was to pay the creditors pro rata in full payment of their claims, held not invalid as not complying with the provisions of section 8612 et seq., Revised Codes 1921, regulating assignments for the benefit of creditors. Composition With Creditors — Differentiation Between Composition and Assignment for Benefit of Creditors. 2. The distinction between an assignment for the benefit of creditors, and a composition with creditors, is that the latter requires the assent of the creditors, while the former does not. Same — When Agreement Between Debtor and Creditors Valid. 3. A "composition" with creditors is an agreement made upon sufficient consideration between an insolvent or embarrassed debtor and his creditors, whereby the latter agree to accept a less sum than the whole amount of their claims to be distributed pro rata in satisfaction of the whole, the agreement of each constituting a sufficient consideration for the consent of the others; the chief requisite of such an agreement is that the parties act in good faith and that there is no fraudulent or secret preference. The agreement is not affected by the statutes relating to assignments for the benefit of creditors. Same — Debtor and Creditor — Insolvent Debtor may Prefer One Creditor to Another. 4. A debtor, though insolvent, may prefer one creditor to another, either by direct conveyance or by conveyance to a third person for the creditors benefit; so also may he make a composition with two or more creditors to the exclusion of others. Page 359 Corporations — Board of Directors Governing Body. 5. The board of directors of a corporation, and not its stockholders, conducts and controls its business and property, so long as it acts in the manner prescribed by law. Same — Mining Company — Composition With Creditors Held not "Sale" of Property. 6. The action of the board of directors of a mining corporation practically insolvent in assigning a sum of money, to be paid into a bank under an escrow agreement, to a trustee for distribution pro rata to its creditors as provided for in a composition agreement did not amount to a "sale" of its property, but amounted to no more than a payment of approved claims against it, a mere incident to conducting its business.

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