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National Lock Co. v. Hogland

UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT


February 8, 1939

NATIONAL LOCK CO.
v.
HOGLAND ET AL.

On Petition for Rehearing.

After a careful examination of the merits of the petition for a rehearing we find no justification for granting the same. We appreciate the force of defendants' contention that the final decree entered in the reorganization proceeding destroys the jurisdiction of the court over its order authorizing the prosecution of the instant suit; but we see no reason to change our conclusion that the bankruptcy court had the power to reserve, and that it did reserve, continuing jurisdiction for the purpose of controlling and making effective its order authorizing the prosecution to termination of the instant suit.

Both parties suggest the advisability of a modification of our decree. We cannot modify the decree in the manner suggested, but feel that the mandatory language of the decree should be made more specific. For that purpose the language of the last paragraph of the opinion of this court in this cause is modified to read as follows:

Our conclusion is that the trial court erred only in stating as its conclusion of law that the dividend was ultra vires of the corporation and unlawfully charged to the surplus account of the corporation. To the extent that the decree rests upon that conclusion it is reversed and the cause remanded with directions to the trial court to modify conclusion of law No. 4 in its Findings of Fact and Conclusions of Law to conform to the holding of this Court respecting the validity of the declaration of the dividend of December 30, 1930; and the District Court is directed further to make such proper adjustments in the amounts of recovery against the defendants as are made necessary by our holding that the defendant Hogland was entitled to credit for the amount of the dividend as of the date it was credited to his account with plaintiff corporation. In all other respects the decree of the District Court is affirmed.

The language of the decree heretofore entered is modified accordingly.

Petition for rehearing is denied.

19390208

© 1998 VersusLaw Inc.



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