*1 162
rightfully involved if a consideration were received for proof fraudulent deed. There was evidence of offer of no relevancy consideration that would enable us to determine the Whitelaw, materiality testimony. (Whitelaw v. App. (2d) Cal. 874].) Pac. We hold therefore cannot [9 objection. sustaining that the court committed error It re further issue of fraud as contended that no spects pleadings. deed to the intervener was raised Bearing e., action, nature i. mind the of the cause quiet may be action, properly title issue raised of fraud Phillips, the pleadings presented. (Henry under as here v. supra.) opinion decree foregoing, In we are of view the conveyances men- setting above aside the
the trial court property therein described title to the quieting tioned and accordingly affirmed. respondent be and must Marks, Barnard, J., J., concurred. P. in the Su- heard petition appellant
A to have the cause Appeal, judgment District Court of preme Court, after in the January 9, 1939. Supreme Court on was denied District, Division One.November Appellate Second No. 11533. [Civ. 15, 1938.] al., Respondents, WILLIAM et v. BARKER WILLIAM S. al., H. et al., Defendants; H. MORGAN H. ACKERS et Appellants. *3 Libby, E. Libby
Warren & Sherwin, Call & Murphey and Guy Appellants. T. GraA’esfor
Gibson, Crutcher, & Dunn J. MacFarland and George C. Jagels Respondents. for
D. WHITE, J. January This action Avascommenced 9, 1933, as members of a plaintiffs committee of by the noteholders holding $666,000 principal owning and sum allegedly Corporation Collateral Trust Gold Notes Pickwick 6%% “notes”), against referred to as the (hereinafter defendants (here- Corporation in Pickwick individual stockholders recover from “corporation”), inafter referred to to as liability. the defendants on their stockholders’ necessary For a it is to understanding clear of the issues epitomize on Decem- facts, appears from it adopted a 13, 1929, ber the directors of the by $1,000,000 increasing resolution indebtedness its bonded 26, December calling meeting and of the stockholders pass to consider and such increase. On Decem- ber the corporation with entered into a contract bankers, Co., Banks-Huntley Co., M. H. & Lewis and & Co., reading America Investment in part as (emphasis follows added):
(( “1. Company immediately will create an issue of One Million ($1,000,000.) Dollars of Six and One-half Per cent Collateral Trust (hereinafter ‘Notes’), Gold Notes called the to be by a secured collateral trust indenture form terms satisfactory Bankers. Said notes shall be dated 15th, 1929, December and Five Hundred Thousand Dollars ($500,000.) thereof shall mature 15th, 1931, December remaining Five Hundred Thousand ($500,000.) Dollars thereof shall mature 15th, 1932. All of the notes shall be the denomination of One Thousand Dollars ($1,000.) each, numbered from 1,000, inclusive, both shall bear semi-annual coupons interest calling pay- for the ment of interest on June 15th and December 15th of each year.
(C Subject “7. to the the conditions this fulfillment of agreement paragraph, agree the Bankers pur- chase from Company, Company agrees and the to sell to Bankers, Fifty Seven Hundred Thousand ($750,- Dollars 000.) ninety-four of said notes the price at per cent (94%) par value and accrued interest from the delivery, date of the notes to the date of for the notes due ninety-three price and at the and one-half per *4 (93%%) par cent value the notes and accrued from their interest date to the date delivery, for the purchase due 1932. The of said notes notes the Bankers subject shall be to the fulfillment of the following condi- tions :
“ (a) indenture The of the notes and the trust issuance securing satisfactory to the Bankers as to same shall be terms, steps legal proceedings and all incident to the and indebtedness, notes, creation said increase of bonded indenture, form and all of the notes, of said the trust proceedings with reference to and issu- the authorization notes, subject approval ance of said shall be Messrs. to the Gibson, Crutcher, attorneys Dunn & for the Bankers.
“(b) Corporation Permit of the Commissioner California, authorizing sale notes to the State of of said ninety-three price and one-half Bankers at and value, plus accrued per (93%%) par of their interest cent delivery, *5 “14. It is understood that said notes shall be delivered to February 1st, Bankers on the or before the delivery they ready event shall so for to Bankers not be the op- date, before the exclusive said the Bankers shall have ninety tion, obligated, within be so at time but shall not subject days purchase Company, of to (90) thereafter to the prices herein set hereof, the all said notes at the terms of forth. by purchase Bankers In for the the
“15. consideration give ex- Company agrees the Bankers the to said the maturity option up to the date of said at times clusive all Fifty remaining Hundred Thou- purchase the Two notes to ($250,000.) when, sand Dollars of said notes as and if issued by subject approval Company the to the the issuance Bankers, by prices agreed counsel at the same thereof for paid to be hereunder for and for the 1932 maturities respectively.
< <
“20. The interest each of the Bankers in said notes is one-third, and each of said Bankers shall be liable to take when, up one-third of notes if but said as and the conditions ’’ agreement shall be fulfilled. 26, 1929, in meeting On as- sembled authorized the issuance of the notes and authorized the corporation and directed the officers and directors of complete necessary steps take the same. -all 28, 1929, corporation On December delivered to the copies the indenture executed trustee two cor- coupons the notes with attached poration, all of executed permit copy of the corporation, and a commis- corporations permitting the issuance notes. sioner corporation time the At the same authorized the delivery to $750,000 principal sum the bankers notes at the agreement, in the on specified while prices December 30 the delivered to the trustee the corporation collateral to secure $750,000 issue of notes in aforesaid accordance with day indenture. On the same trustees terms cer- day *6 equity February receivership, 10, 1932, and on the United California, District Court for States the Southern District of Division, presentation for Central limited the time 20,1932. filing plain- the receiver to of claims with June The any file under present tiffs herein did not or claim this order by them, September 25, 1934, on upon notes owned but they caused the trustee to sell all the collateral held pledge by the trustee under the indenture accepted $305,867.16 proceeds their share of the of the sale. as Of amount, this $163,965.50 applied payment was to the of principal on the $666,000 by plaintiffs. of worth bonds held plaintiffs petitioned
Thereafter the the United States Dis- authority file Court for a belated against trict claim corporation, petition which denied. Pending appeal September order, 26, 1935, and on from this the plaintiffs plan reorganization signed proposed a of of the Pickwick Corporation against corpora- in full to settle their claim by accepting pro proportion 8,000 rata their of shares Western capital Company. stock of Terminal of the common 24, 1935, under section August proceeding On 77b of the Bankruptcy reorganization Act was commenced for corporation, and in proceeding this plan amended reorganization approved by order of the federal court February 4, By 1936. this order plaintiffs enjoined perpetually prosecuting any from action or claim by against through held or or under the of them. The plan or amended reorganization signed by plaintiffs was consummated and carried out proceeding, resulting the federal an order discharging the reorganization trustee.
Following 1936, judgment trial this action in was ren- their against appellants pro rata proportion dered against them as the indebtedness stockholders of the by trial court to found exist in corporation, favor plaintiffs by after the allowance reason of the afore- of credit by said exist trustee’s sale and the credit found the court to acceptance reason of the Western Terminal Com- pany judg- reorganization plan. under From stock ment, denying as from an order their motion for a well judgment, new trial and their motion to vacate two separate groups prosecute appeal, defendants each an appeals stipulation upon are heard were consolidated and reporter’s transcript. one clerk’s and Appellants’ ground appeal first is that action special is barred statute applying of limitations in. ’ liability provided case suits and for in Procedure, section 359 of the Code of being Civil it contended January the action was 9, 1933, commenced a date more years three after than “the was created”. liability, any, if appellants herein is a meaning created law within the section 359 of the Procedure, pursuant Code of Civil to and in accordance with ’ provisions of the Constitution stockholders liability, prior 3 of XII section article as it existed repeal by people vote of the on November and which was in pertinent presented effect at the times to the issues here following language: which contained the “Bach stockholder joint-stock of a association, shall be individ *7 ually personally and liable for proportion such all its incurred, debts and liabilities or during contracted the time stockholder, he was a as the amount of stock or shares owned by him bears to the whole of the capital subscribed stock or See, shares the or association. ...” also, Code, 322 of prior section the Civil as it existed to its re peal upon in 1931. An primary independent action and liability brought must specified be within the time in section Procedure, e., 359 of the Code Civil i. within years three liability the after was created. Of course there is a clear distinction and wide between the creation liability of a and accruing of the a cause action thereon; and 359, section industria, emphasizes ex that distinction. A liability may contingent; may be absolute or it be unconditional or limited; by may presently enforceable action, it be or may there be performance; given time for its but whatever character, by it is created the consummation of the contract, act or by liability (Chambers the is omission which incurred. v. 732].) 182 191 Pac. Farnham, This Cal. has been re [187 170 (Gardiner state.
peatedly approved is law this and settled there 75], eases 238, Pac. Royer, Cal. v. [139 cited.) disputed by That such is the law is not on this counsel question appeal. appellants argu to which devote their liability Corporation ment is as to token the of Pickwick respect to the matter here involved was contracted or in curred, admittedly liability for the then very sprang into existence at the moment contract incurring liability corporation—in ing or other very moment—and words was “created” at that was barred provisions of section 359 of Code of Civil Procedure years therefrom upon expiration of three without action against the instituted stockholders.
It was determined trial liability court that this was upon respective contracted and incurred dates when the corporation’s per cent gold collateral trust were *8 delivery receive would, upon pay for the rely upon such cases as Appellants Hunt Ward, v. same. 335, Rep. 37 Am. St. 87], 612 Pac. Coulter Dry 99 Cal. [34
171 Wentworth, 939], Goods Co. v. 171 500 Cham Pac. Cal. [153 Farnham, supra, Diego bers Pidgeon Brewing v. v. San C. Co., App. 1048], 47 in each these Cal. 676 Pac. but [190 agreement eases the lia question gave rise bility pay money, was an promise, unconditional construct dam, goods deliver In merchandise, or the like. agreement instant case the com of December pletely performed when the were delivered to
172 the agreement obligation. in an results unconditional (Stevens supra.) v. Weisbaum,
Appellants’ second contention with reference to limitations, statute of liability that the stockholders’ was created on 31, 1929, when, appel according to lants, corporation “the completed had acknowledgments and deliveries and made the notes conclusively binding upon it”, equally merit; without because the trial court found the trust indenture securing the notes and stock cer tificates under the trust indenture placed escrow, the conditions of 8, which were not January fulfilled until 1930, delivery and that of the trust indenture and such collateral not accomplished January until 8, 1930; and amply the evidence supports findings. such liability If the January 8, 1930, was incurred of course the action is not Further, barred. corporation acts last above merely mentioned constituted preliminary steps taken to authorize the issuance of the notes. Taken steps as such were to authorize the issuance of the notes up and to set securing trust indenture for the thereof, steps these in no way liability, certainly created corporation a impressed liability pay not with 6y2 per cent gold collateral trust notes until the actual issuance de Keene, (Wass livery January 9, of the same on 1930. v. supra; Bishop, supra.) Yule v. We hold that obligation question issuance, here did not arise until the that is to delivery by say, the of the notes and the receipt by a valuable consideration there January 9, 1930. The ; for and that occurred cases of Lanz Mortgage Corp., (2d) 121 587 App. v. First Cal. Pac. 316], [9 Co., 8 118,126, v. South Carolina R. Fed. and Wachner Claflin Richardson, App. (2d) 422 (2d) 714], Pac. v. Cal. [58 here, application because this is not one no of those have date of in which the issuance of cases operates *10 the Procedure of State the Code of Civil section 335 of may made of the be Whatever criticism of California”. findings, say ap we cannot that in these phraseology used especially in of thereby, view the pellants prejudiced were support in the evi ample both holdings find fact that the Complaint is next applicable law thereto. dence and the number of shares of finding XV, the total as to made that number of shares respective held outstanding and the stock by appellant outstanding each of shareholders issued and be 22, January 7, period tween and March dur upon ing which the notes which this all of action based corporation, by supported issued is not ad were competent unduly evidence. It prolong missible or would here set forth in in opinion support to detail evidence this say finding. Sufficeit to that we have read the record of this finding supported by competent that the and and conclude documentary. evidence, and both oral Where legal certain kept by agent Bank America as transfer stock records primary proper a evidence foundation was not constitute did transcripts thereof when the loss for the introduction laid company The books of the proved. originals was of the prove evidence to competent the number of shares sub alleged and issued at the time the liability arose, scribed prove who were to shareholders. and also urge appellants respondents that Next because aas agreed protective plan committee to a noteholders’ re the debtor under organization section 77b Bankruptcy amended, they Act of as have lost against appellants in right proceed action. Sec their Bankruptcy (11 A., Act 207), U. S. sec. C. 77b “a”, up machinery whereby sets wherein and subdivision adjudicated a they corporations, have been whether or not proceeding creditors, may a bankrupt, or their commence provides “b” plan reorganization. effect Subdivision require reorganization fulfill certain plan of must that a court, powers “c” outlines the ments. Subdivision plan “A provides: in “e” statute and subdivision ac it has been reorganization not until shall be confirmed have been acceptance shall cepted writing . . and such . holding creditors proceeding by or on behalf of filed claims whose of each class thirds in amount of the claims two ” . plan. . . be affected allowed and would have-been hearing and consideration for a provides “f” Subdivision judge that the shall directs and plan the court findings make being certain able plan upon confirm “g” provides Subdivision adoption fairness. as to its plan and of the provisions of the upon confirmation that upon the debtor binding be shall order of confirmation con- upon final provides “h” Subdivision all creditors. plan dealt with property plan, “the firmation debtor, its oi the of all claims clear be free and . . shall . may consistently except as creditors, such reserved the order plan be provisions with the pro- “h” further plan. ...” Subdivision confirming the proceedings a final termination of the “upon vides trustees, discharging the trustee or be entered shall decree by way may equitable, be any, making provisions such if closing case. Such final otherwise, injunction *11 liabilities, debts and debtor from its discharge the shall decree rights interests of its end all and and terminate and shall plan may or except provided in the as be as “k” provides that Subdivision ...” as aforesaid. reserved reorganization plan adopted cannot be and in event a may order consummated, liquidation, the court a then Bankruptcy ordinary opera- Act provisions become tive. plan reorganization claim that a appellants’ pur-
It is Bankruptcy Act, when 77b of the confirmed section suant to distinguishable principle in court, from what is not by proceedings composition a bankruptcy as in with is known true, appellants, as claimed that no ad- It is creditors. bar, in bankruptcy ever made at in case judication bankruptcy applied in ever discharge for or nor was is distinction Undoubtedly there a between a dis- issued.
175
charge
settlement,
well
in
as
bankruptcy
composition
and a
A com
between
which
therefrom.
consequences
flow
contract,
of a
position
partakes of the nature
with creditors
bankruptcy pro
superseding
in a measure
outside
respective
ceedings ;
and the
acceptance,
it is an offer and
bankrupt
are fixed
rights of the
and the creditors
not
terms of the
its confirmation. But that does
offer
every time
liability
modified
mean that
stockholders’
is
difficulties,
because to
finds itself in financial
hold
nominal
would be make the stockholders’
so
only.
very
and the
purpose
The
of the stockholders’
only
when
protection
value in it
it affords
the debtor
is the
obligations.
must
It
itself
unable to meet its
is
between a
noted
is a difference
common-
be
also that there
bankruptcy.
composition
composition in
In the
law
a
principal
voluntarily
former the creditors
release
debtor
and therefore
codebtors,
release
in the
while
case of a bank
ruptcy composition
discharge
operation of
law
not
composition.
act
the creditor who assents to the
Upon the institution,
case,
inas
of proceedings
instant
corporate reorganization
under section 77b of the Bank
Act,
ruptcy
the creditor is
cooperate
pro
forced to
in the
ceedings
composition
corporate
for a
or a
reorganization, for
appears
whether or
or
not he
consents to
composition
a
or
corporate reorganization,
bankrupt
debtor,
or
as the case
may be, may
discharged.
be
creditor without choice
attempt
composition
but
or assent to
obtain
plan
reorganization
he
deems the most favorable. For
reason, undoubtedly,
repeatedly
it has been
held
bankruptcy
composition
way discharges
codebtor,
no
composition.
(In
or not he consents to the
whether
re Korn
bluth,
400,
(2d)
402; Myers
65 Fed.
v. International Trust
Co.,
Sup.
372,
273
692];
380
Ct.
71 L. Ed.
U. S.
Easton
[47
Mfg.
Caminez,
App.
Furniture
Co.
146
Div. 436
v.
N. Y.
[131
Supp.
Butler,
;
122
Am.
498,
Guild v.
Mass.
157]
500 [23
Rep. 378];
Paper Co.,
In re American
that the same obliga should be in full satisfaction of the tion of stockholders under their liability, we hold that shareholders were not released from their as such. Myers Co., As was said in v. International Trust 273 U. S. Sup. 384 71 692], Ct. L. Ed. “It also [47 results, very composition, from the where nature of a merely discharge accepted go terms offered to the note, the maker not release an of a its confirmation does separate liability ‘bargain’ indorser his from for which no cases.) (Citing Further, was made. ...” the.Bank corpora bankruptcy of ruptcy provides, Act “The a itself officers, directors, . . . stock tion shall not release its holders, under the laws of a such, as from “k” States,” subdivision state or of the United Act, under the re Bankruptcy section 77b of the made, provides that organization admittedly was here bankruptcy to Bankruptcy applicable Act sections of the reorganization under proceedings applicable to shall be Bankruptcy Act rule of the aforesaid That section 77b. corporation or associa of a bankruptcy providing that officers, or stockholders as directors not release shall any liability state, under the laws a from should such reorganization under 77b apply proceedings section no reason for a proper, because difference seems meet discharge merely corpora of the debtor Going exists. plan reorganization did not tion, the confirmation of separate such from their lia release the stockholders bility. discussion or require consideration. points
No other denying orders appeals from the motions to vacate dismissed, the reason that under the judgment are appeal will not lie from an such this state law of settled moving party sought upon which grounds if the order judgment entry vacated existed before the to have appeal judgment. available on from and were judgment Guild, (2d) 380 ; Cal. Pac. v. (Lawson [10 459] App. 82].) Learner, 113 Cal. Pac. Barry Not [299 v. copy grounds with either having furnished been argument judgment, vacate the nor with motions such that such motions appro assume thereon, cannot we made, nor can we properly review same on priately appeal. *13 denying the the orders appeals from purported The no reason that dismissed, the for for trial are motions new circum the facts by under appeal is authorized law such present. here stances from which judgment stated, the herein
For the reasons appeals is affirmed. are taken these York, J., P. concurred. views with the in accord Dissenting. DORAN, J., I am opin prevailing in reached the conclusions
expressed and the statute of to the phases pertaining ion, to those except as I In that thereof, dissent. portion As to limitations. briefly, it will be remembered summarizing the events regard, adopted resolution the corporation the directors of that the 15th, December 13, 1929. On December to create the debt deposited with was security the loan indenture and the executed 18,1929, the contract was the trustee. On December bankers, by the terms of corporation and the between the agreed agreed to to sell and the bank corporation which the by the buy represented which the debt created the notes Decem of December 13th. On resolution above-mentioned ratified the action approved and ber 26th the notes, were Thereafter the which of directors. board the by corporation to the 15th, were delivered dated corpora received the and the consideration the bankers tion therefor. determining purpose when opinion that, for the my
It is run, prevailing the limitations commenced the statute the act of the cor- legal effect to erroneous opinion attributes as to issuing as well the time the in the when poration 18th, contract of December issued, and the be- same the bankers. corporation and the tween liability stockholders for the debts of the cor- The statutory operation and arose law when poration was corporation. On December 13th was created debt by $1,000,- duly resolved to increase its debt corporation corporation taken thereafter was the All action 000. my and, opinion, resolution when such product of as a matter of completed, it followed law that was action stockholders for liability the debts as the far so concerned, as De- attached was 18th merely of December contract was The 13th. cember debt, step process by loan, representing delivery issuing of the notes of and the obtained. loan, step by money, representing the was another which the legal upon act effect ac- obtained. Neither had resolving in the tion to create debt first instance.
Although the contract of December 18th determined thereto, vested parties and as well duties and liabilities of the day, parties as of that rights to the contract execu- nor the date neither such contract nevertheless com- when the statute of limitations tion determined thereof against personal of the stock- menced to run that, merely provided in effect That contract holders. subject corpora- conditions, fulfillment of certain to the bankers bound themselves itself to and the bound borrow *14 representing corporation the the had debt to lend the amount my opinion, Nor, create. in did the resolved to theretofore representing the debt the issuing of the notes physical corporation any question. This on bearing have such act my judgment, merely corporation, in was of the part the issuing the the The execution of contract and clerical. per- merely process mechanics the the the notes were necessarily required complete practical to forming the details accomplish thereby purpose the of the and the transaction December 13th. resolution of qreated- debt was and that but was but one debt There corporation in of the that that the It is true once. contingent upon performance the of certain connection per- conditions. But the fulfillment of certain the acts and fulfillment of those conditions acts and the of those formance merely the complete, process. concluded subsequent, when corpora- time of the creation of the fixed the They in no sense debt. upon argument relies in effect the opinion prevailing The issued and not delivered and notes were long as the as that corporation therefor, there no lia- money received the having in been issued ten notes different therefore, the bility ; limitations commenced to run at instalments, the statute argument sound, then, this is car- If times. different ten conclusion, there were ten different debts logical ried to my opinion It is times. that the different at ten created one debt and that their in issue of but evidence notes were only legal consequence is instalments incidental no and of or effect whatever considered. as to issue herein may conceded, argued support prevailing
It be as opinion, if would that the notes had issued there not been just logical have to liability, been no it is assert but as resolution, corporation if the first adopted had never liability. fact remains that there would have been no The logic standpoint it is issued, the notes and from speculation give to that which does but idle to consideration regarded argument is the issue. not exist. Such beside De- The notes refer holders thereof to the indenture of rights of description bearers cember made thereof, provide as follows: “Reference is and further provisions of which to the indenture to all of the terms note, thereof, by acceptance of as- the holder indenture min- nothing indenture, in said There is either sents.” or the resolutions of directors stockholders utes of 18th, agreement provides in of December substance not accrue until the or effect that the debt shall contrary, issued delivered. To the as hereto- notes are December 15th noted, the bore date of *15 occurred, the incident alone time the incident when the count question the It be remembered that herein must material. liability of with the the stock- consideration deals under corporation and the the of the time when for debt holders stockholders, by subsequent ap- liability accrued. that debt the only the created resolution authorized proval, December it The notes are dated 15th and 13th. corporation executed the them on that assumed that must be liability might the Questions to when have become as date. corporation are beside against the the issue. enforceable following: Jurisprudence notes lia- “The California being by law, one created stockholder statute bility aof years runs three after liability, the creation of that not years three liability from the time the becomes enforceable against corporation,—that is, liability of the stock- holder corporation’s accrues inception at the liability, of the and the statute run from commences to that date. Under the statute a ‘liability’ binding is created when a contract it is made corporation, independently of whether the liability is contingent absolute or or of right when the may enforce it liability accrue. course, corpora- Of may tion and that of the become at enforceable (6 Jur., 1014.) same time. ...” p. pointed Cal. As prevailing opinion, out in the there is a distinction between liability accruing creation of a cause ac- And, tion thereon. as further noted Juris- California together prudence, rule, “The effect of with the fact that corporation and that of the stockholder separate are periods and distinct with different of limita- cases, may in most that a stockholder be liable for proportion his of a debt of the even after the against cause of action barred; itself is may against the statute of limitations have run the stock- against corporation, holders’ before it has run against corporation.” or even before it has accrued (6 Jur., supra.) Cal. premise,
Based a different there is one other con- may Assuming be reached. clusion the resolu- 13th, legal merely effect, a proposal tion December' debt, proposal ripened then that to create the into a debt executed, beyond of December 18th when the contract having question contract, fully performed, been created creditor the relation of debtor and date of its execu- tion. reasons, my foregoing opinion, judgment
For be reversed. should by appellants
A to have cause petition heard in the Court, judgment in Supreme after the Distinct Ap- Court of Supreme ¿fanuary Court on was denied peal, 1939. notes due from their date to the date par ninety-four per (94%) of their value 1932, and cent at delivery, plus to the date of interest from their date accrued in 1931. of the notes due earnings statements and Furnishing of sheets “(e) balance satisfactory to the Bankers of conditions showing financial subsidiaries, Transit Company and also of Motor and Securities, Inc., Transportation and Corporation, Pacific Greyhound Lines, Inc. Pickwick sheet, prepared Company’s balance “(d) Pro forma accountants, showing Company the condition after financing. to this effect giving (C Company Bankers, do so requested to “9. If permit Corporation from the negotiation a secure agrees to California, authorizing the the State of Commissioner prices notes on the and con- said for the sale of negotiation forth. set herein ditions precedent the conditions Upon the “13. fulfillment forty-eight (48) no- notes, hours purchase of ready notes are for de- Company said from tice up agree pay to take for Three Bankers livery, ($375,000.) Seventy-Five Thousand Dollars of said Hundred (50%) being thereof of the 1931 per matu- cent fifty notes, being (50%) thereof of the 1932 matu- cent fifty per rity, pay up remaining take for the shall Bankers rity. ($375,000.) Seventy-Five Thousand Dollars Hundred Three being of the 1931 (50%) thereof fifty cent per of said being (50%) thereof of the 1932 fifty per cent maturity, and February 1st, 1930. on or before any time at maturity,
Notes
notes on the following all of the tified executed indenture. trust January 8, 1930, opinion an Thereafter, the attorneys trustee, was delivered to the and the for bankers indenture January 9, latter on 1930. recorded Delivery of the notes to bankers made their varying amounts, convenience ten instalments of first January 9, 1930, on- final on March and the instalment 1930. payments Interest on the notes regularly were made until December when default was payment made in the of interest due on that date and on $242,000 principal maturing sum of the notes on that date. January 28, 1932, On went into a federal
notes 6% paid bankers, sold the bankers payment date of such sale and being January earliest January 1933, 9, 8, day 1930. before the upon date commenced, Sunday, which this action was was a and there purpose it is conceded that for the fore the statute of may it be that limitations assumed this action was commenced (Tilden January 8, Perino, 1933. Lumber Co. v. Cal. 466].) (2d) No contention App. (2d) 133 Pac. made [37 is barred if the by appellants upon that this action brought the suit was incurred on or January after 9, appellants, claim however, 1930. It began limitations to run on statute of either of the follow (1) December ing dates: date of signing original agreement corpora and execution between the bankers; (2) 31, and the the date signed indenture was which the trust acknowledged, of the notes were prior to which all certified. appellants in the contention merit We find no that the agreement by the of December created 1929. executory in agreement was merely pro- character. This It corporation perform should the acts, viz., certain vided of the commissioner approval corporations secure proceedings and should the issuance of the obtain counsel, etc., of the bankers’ then approval the bankers
notes
payment
corporation
bankers and
therefor received
January
9, 1930.
an action for breach
This is not
performed.
agreement
fully
December
In
18th
as that was
us,
the case
corporation
before
ever be
whether
should
depended upon
liable
ability
come
the condi
perform
precedent
tions
contained in the
contract of
18th.
performance
After the
of those
contract
conditions such
extinguished,
corporation’s liability
and the
was then im
posed by
buyers
delivery
reason of the
notes to the
of its
receipt
thereof and
therefor.
consideration
liability upon
The
incurred no
the notes unless
comply
it was
precedent.
able to
with the conditions
In
words,
other
no
the cor
debt
was incurred
poration
(Finch
until it had issued
delivered the notes.
Finch,
App. 72
v.
68 Cal.
;
Pac.
v. Bishop,
Yule
[228
553]
notes retrospectively as of the date execution or recordation (Germania indenture. the trust Trust Co. v. San Fran 178].) cisco, 589, Pac. 128 Cal. 593 [61 independent claim, that Appellants’ next notes, by indenture claimed appellants the trust terms of to have 31, delivered as of December 1929, executed and been created started pay the statute promise limitations supported running, the well finding falls before of the trial indenture the trust was not delivered until court Janu- ary previously expressed that and our conclusion delivery notes and impressed was not until receipt of the therefor. consideration not argued findings are in It is next that certain truth have do with findings all, at of law. These but conclusions at the finding first arose the court that delivery of the and that issuance, sale and time of the corporation was not issuance, delivery, the until such sale and or in liability in whole subject indebtedness or to “said alleged.in finding causes action that “the part”; and- the 359 of the Code complaint barred section plaintiffs’ are not 338 or of section Procedure subdivision Civil
fore notes per par cent agreed buy notes for bankers from date of notes to accrued interest value and delivery. date of opinion based, reasoning which the prevailing The correct, is in understanding my thereof substance if pay no that there was the effect issued, delivered until notes were amount Hence there be no therefor. could consideration received time. until liability of flaw judgment, my taking results from argument, in into ac- such