104 Wash. 594 | Wash. | 1919
This is an action of equitable nature, by the receiver of an insolvent domestic corporation against its trustees and officers, with whom the other stockholders are joined as defendants because of their participation in the wrongs charged, to recover for the amounts taken from the corporation’s assets by another corporation in whose possession and control it is alleged the defendants, in violation of their duties as trustees and officers, merged their own corporation. The facts stated in the complaint may be summarized as follows:
In the year 1908, there were engaged in the banking business at Fairbanks, Alaska, a Washington corporation, called the Washington-Alaska Bank, and a Nevada corporation, called the Fairbanks Banking Company. On September 16, 1909, the Washington company sold its business to the Nevada company, at the same time transferring all its shares of stock to the purchaser. The purchase price was $250,000, covering par value of the stock and a bonus of $100,-000. At the time of the sale, the deposits of the Washington company amounted to $1,848,027.72. The amalgamated banks were for more than one year operated by the purchaser ostensibly as two institutions, but on October 8, 1910, the Fairbanks Banking Company amended its articles of incorporation in Ne
Disregarding all questions as to the sufficiency of the complaint, except that it contains on its face facts germane to the question of when the alleged fraud was discovered, or should have been discovered, by appellant, we pass at once to a consideration of the question of whether the action is barred by the statute of limitations.
It appears on the face of the complaint that the alleged fraudulent acts of the respondents occurred on September 16,1909; that the receiver for the insolvent Nevada company was appointed in January, 1911, at which time he took charge of the books and assets of the company, including the books and accounts of the Washington company. It is alleged, however, as an excusatory fact, that the receiver did not discover the fraudulent character of the transaction between the two banks until May, 1915, when he learned for the first time that the Nevada company was without power under its domiciliary laws to acquire the stock of another banking institution.
The statute governing such cas.es, Rem. Code, § 159, subd. 4, provides a three-year limitation upon “an action for relief upon the ground of fraud, the cause of action in such case not to be deemed to have accrued until the. discovery by the aggrieved party of the facts constituting the fraud.” The present action was begun September, 1915, about seven years after the consummation of the alleged fraud. The fact which appellant contends it did not discover until May, 1915, and by lack of knowledge of which it is excused from bringing an action upon the grounds of fraud alleged sooner than that date, is that there is a Nevada statute prohibiting the purchase by Nevada banking
■ As we view the complaint, however, the substantive fraud alleged is not the ultra vires act of the Nevada company, but the conduct on the part of the stockholders of the Washington company in disposing of its entire assets in such a way as to inflict injury upon its creditors and depositors by means of a transaction impairing the resources upon which the creditors and depositors of the Washington company had a right to rely. The existence or non-existence of the Nevada statute, therefore, and whether it had any extraterritorial force or not — which is a question open to some debate — and knowledge or ignorance of that statute on the part of either the creditors or the receiver, was, it seems, wholly immaterial. Whatever fraud and injury there were, were then fully accomplished. The gist of the action would have been the same if the Nevada statute had never been enacted. The injury inflicted would have been the same with or without that statute. The fraud, if any, was consummated in Alaska, and would have been equally remedied under the common law of that jurisdiction without reference to a foreign statute governing or limiting the charter powers of the foreign corporation.
“A party defrauded must be diligent in making inquiry. The means of knowledge are equivalent to knowledge. A clue to the fact, which, if followed up diligently would lead to a discovery, is in law equivalent to discovery — equivalent to knowledge.’’ Deering v. Holcomb, 26 Wash. 588, 67 Pac. 240, 561.
See, also, Irwin v. Holbrook, 32 Wash. 349, 73 Pac. 360; McDonald v. McDougall, 86 Wash. 339, 150 Pac. 625; Hoy v. Burk, 92 Wash. 536, 159 Pac. 701.
Appellant here inconsistently urges that the transaction complained of is violative of not only the Nevada statute, but also of the common law; that is, of public policy. We are, ourselves, of the opinion that it was violative of public policy, and therefore of the common law, and must assume the common law to be the same in Alaska as in this jurisdiction. The transaction thus falls within the scope and spirit of many state and Federal decisions cited and quoted by appellant. If that be true, then the receiver or the creditors, upon knowledge of the admitted or pretended consolidation of the Washington and Nevada corporations, were immediately charged with knowledge of the violation of public policy and of the common law of Alaska, and it was immaterial in that case whether the act was violative of the statutory powers of the Nevada corporation. Ignorance of the law was not excusable, although ignorance of a fact often is.
Appellant also adopts a somewhat inconsistent theory that the law of the place of domicile of the corporation follows the corporation and governs its every act wherever performed, and that the general laws of
The broad assertion that the statute does not run until the fraud is discovered is not tenable. The statute begins to run when the fraud should have been discovered, and a clue to the fact which, if followed up diligently, would lead to discovery, is in law equivalent to discovery. Deering v. Holcomb, supra. A general allegation of ignorance at one time and knowledge at another is of no effect. Hardt v. Heidweyer, 152 U. S. 547. In order to excuse a want of knowledge of the fraud, a pleading must set forth what were the impediments to an earlier prosecution of the claim, how the pleader came to be so long ignorant of his rights, the means, if any, used by the opposing party fraudulently to keep him in ignorance, or how and when he first obtained knowledge of the matter al
The allegations contained in the complaint negative any excusable want of knowledge of any of the facts necessary to avoid the bar of the statute of limitations on the ground of fraud, and, on the other hand, demonstrate that all the substantive grounds of fraud were known at once, and any other fact necessary to have been known was not actively concealed, was not of a nature to conceal itself, and could have been known by the parties in interest by using ordinary diligence. This is sufficient to start the statute in question running, and justified the sustaining of the demurrer herein.
This being determinative of the matter, other questions presented by the briefs need not be considered. Judgment affirmed.