203 F. 16 | 7th Cir. | 1913
(after stating the facts as above). The findings of fact made by the trial judge are, in substance, supported by the evidence. The record conclusively establishes the fact that, at the date of the sale by the Merrill Company of its entire plant to the Grandfather Falls Company, the former was in desperate financial straits, without power of- recuperation. Through what at this time seems to have been deplorable lack of foresight, its substance had been expended in securing a vast factory- equipped with every facility for
“Laches is not like limitations, but is a question of the inequity of permitting a claim to be enforced, and it depends on whether, under all the circumstances, the plaintiff is chargeable with a want of due diligence in failing to institute proceedings before he did.” Venner v. Ry. Co., 236 Ill. 349. 86 N. E. 266; Townsend v. Vanderwerker, 160 U. S. 171, 16 Sup. Ct. 258, 40 L. Ed. 383.
“But, as indicated, it was in good faith and with the knowledge of all the stockholders, each of whom was at liberty to bid on the sale and become a purchaser if he saw fit to do so. The company could only sell to some one willing to purchase. * * * No .creditor is here complaining, but only a stockholder who had the same right and opportunity to purchase as any other stockholder. The result of the transaction was to pay and satisfy all the debts of the corporation. It was in effect for the benefit of the creditors of the corporation.”
In Leavenworth County v. Ry. Co., supra, the court says of a similar state of facts:
“Notwithstanding this commingling of officers, the corporations were distinct corporations. They had a right to make contracts with each other in their own corporate capacity, and they could sue and be sued by each other in regard to these contracts, and the question is not, could they do these things, but, have the relations of the parties, the trust relation, if indeed such exist, been abused to the injury of the Southwestern Company?”
“The stockholders had been called together, and they were urged to make advances in proportion to the stock they severally held, and thus relieve the company and preserve its existence, but this they refused to do; and as it could not be preserved, and must come to an end by a sale under the power in the trust deed, no reason is perceived why appellants might not become the purchasers at the sale.
“They were under no moral or legal obligation to advance their own means, pay the debts, and preserve the property for the use of the other shareholders, who had declined to join in making pro rata advances to relieve it from debt. Appellants seem to have acted fairly, as they purchased at a sum sufficient to pay all the debts of the company. They chose to do so rather*21 than make an effort to obtain all of the property for the debts secured by the trust deed and the certificate of purchase. On the contrary, they gaye many thousand dollars more, that honest creditors might he fairly paid, and the company wrong no one. This does not have the appearance of fraud. Appellants had faith that the enterprise could be carried out with success, and that they could thus save the means they had advanced; but appellees, by the course they adopted, manifested an entire want of confidence in its ultimate success. They were even offered the opportunity to come in, for a considerable period afterwards, and share in the new enterprise, by advancing a ratable portion of the means, but they ail declined; but, when success was achieved, they then saw the advantages they had lost and then sought to set aside the sale and have the property restored to the old company, and thus reap the benefits arising from the enterprise and means advanced by others. To do so, they should show fraud or a want oí power to make tho sale or the purchase by appellants, neither of which has been done.”
Otherwise the decree of the trial court is affirmed.