Moore

This is an appeal by the trustee in bankruptcy of Motor Products Manufacturing Corporation, hereinafter called the “Bankrupt,” from a decree of the District Court which confirmed an order of the referee allowing a claim against the bankrupt in the sum of $60,953.49, filed by appellees W. H. Jahns and Margaret J. Jahns. The claim is based upon certain debenture bonds issued by the bankrupt to the appellee W. H. Jahns. It was disallowed by the trustee on the ground that the debentures were issued contrary to the provisions of the California Corporate Securities Act, Cal.St.1917, p. 673, as amended, and hence were void. That issue is the only one before us on this appeal. ¿

The bankrupt is a corporation of the state of Missouri. It operates in that state a plant for the manufacture and repair of automobile parts. Four of its five directors are residents of that state. The fifth director, W. B. Huber, is a resident of Los Angeles, Cal. At all times material in this case Huber has been the actual manager and guiding spirit of the bankrupt.

In 1925 Huber purchased from W. H. Jahns the entire capital stock of a California corporation, also engaged in the manufacture of automobile…