Nature of the Case
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Facts
Wangemann (P), president and a large stockholder in Wangemann-Reichardt Company, Inc., sold 500 shares of company stock he owned back to the corporation at $110 per share to be paid for on or before January 1, 1923. The purchase was authorized and the company's note, due January 1, 1923, bearing 7 percent interest from October 1, 1922, was delivered to P in payment. The corporation was solvent with a surplus in cash, over and above its liabilities. The note was not paid, and renewal notes were issued with debt was reduced to $35,000. Eventually, the corporation was adjudicated bankrupt. The referee held that the corporation had the right to purchase its own stock, that the transaction was in good faith, and at the time of purchase sufficient surplus was available. The referee held that P was entitled to prove her claim and participate equally with the other creditors in the distribution of the assets.
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