DocketNumber： No. 1228
Filed Date： 12/1/1924
Status： Precedential
Modified Date： 10/18/2024
Epitomized Opinion
Injunction to restrain the steel corporation from enforcing and carrying out mortgage for sale of bonds amounting to $300,000. Patterson originally obtained an allowance of $10,000 which was made a lien on the stock of the corporation. $185,000 bonds had been subscribed for cash when the suit was instituted and $80,000 subscribed by creditors. No bad faith or fradulent purpose is shown by the directors in issuing such bonds and mortgage; Patterson contends that his lien upon stock entitles him to stop the issue of bonds until his claim is paid. It appears from the evidence that Patterson, being consulted before the mortgage was executed, offered no objection, at least no explicit denial of this statement appears in the record. A motion was filed to dismiss error proceedings upon the ground that injunction refused is a preliminary order. Affirming the common pleas the court of appeals held:
1. Order refusing injunction to restrain a corporation from issuing bonds and mortgage is final and reviewable on error.
2. Lien for fees upon corporation stock is not superior to rights of general creditors, hence, injunction will not lie to restrain the corporation from issuing bonds and executing mortgage to prosecute its business.