90 P. 1012 | Or. | 1907
Lead Opinion
Opinion by
The principal questions involved in this ease are: (1) Is the defendant company liable to plaintiffs either as a stockholder for dividends received upon its stock, or by reason of having caused the liquidation of the defendant bank and having taken over its assets? (2) Is it necessary that the plaintiffs procure a lien upon the property before they have a standing in equity to sue defendant company? (3) Are plaintiffs barred by the statute of limitations? That is, is this a concurrent, equitable proceeding to which the statute applies? (4) If the statute applies, does it begin to run from the date of plaintiffs’ judgments, or from the date defendant company received the property?
However, the defendant company’s liability is upon a constructive trust to which the statute of limitations will apply in an equity proceeding. And, although the statute of limitations will run against the constructive trust, it commences to run only from the time the cause of action arises; that is, when the party might bring a suit: Story, Equity Jurisprudence, § 1521a. The plaintiffs’ cause of suit did not arise until judgment was obtained against the corporation and its insolvency disclosed. This is the holding of Powell v. Oregonian Ry. Co. 38 Fed. 187, and Chewy v. Lamar, 58 Ga. 541. Defendant cites a great many authorities upon the proposition that the statute of limitations has
Therefore we conclude that the transfer by the defendant bank of all its assets to the defendant company without provision for payment of its debts was a constructive fraud against the plaintiffs; that by the very nature of the transaction and defendant company’s relations to the defendant bank it took the assets with notice and cum onere, and in a suit by plaintiffs in the nature of a creditors’ suit to reach the assets or their value in the hands of defendant company the limitation begins to run from the date of return of execution upon plaintiffs’ judgments nulla dona. Therefore there was no error in the decision of the lower court, and the same is affirmed.
Aeeirmed.
Rehearing
On Motion for Behraring.
Opinion by
Counsel cite authorities in the motion to the effect that, whe/re plaintiff’s remedy is primary and direct, the creditor need not procure judgment and return of execution before suing the transferee, but may bring suit in the first instance against it. But these are cases in which the primary liability is created by statute, and are therefore not in point. We believe that Case v. Beauregard, 101 U. S. 688, 691 (85 L. Ed. 1004), states the rule correctly, viz.: “Whenever a creditor has a trust in his favor, or a lien upon property for the debt due him, he may go into equity without exhausting legal processes or remedies. * * Indeed, in those eases in which it has been held that obtaining a judgment and issuing an execution is necessary before a court of equity can be asked to set aside fraudulent dispositions of a debtor’s property, the reason given is that a general creditor has no lien; and, when such bills have been sustained without a judgment at law, it has been to enable the creditor to obtain a lien, either by judgment or execution. But when the bill asserts
Upon the statement of facts in this complaint, plaintiffs had no standing without the allegation of judgment and execution returned nulla bona against defendant bank: D‘. A. Tompkins Co. v. Catawba Mills (C. C.), 82 Fed. 780. We understand that the case of Taylor v. Bowker, 111 U. S. 110 (4 Sup. Ct. 397: 28 L. Ed. 368), is directly in point upon this question. In that case, prior to 1867, the insurance company had wrongful^, as to creditors, made a division of a portion of its property among stockholders, and afterward surrendered its charter. Bowker obtained judgment on April 4, 1868, against the insurance company upon a suit commenced prior to the surrender of the charter. Execution was returned nulla bona July 8, 1868, and on April 11, 1874, being more than six years after the judgment, but less than six years from the return of execution, Bowker commenced this
The foundation of the proceeding by a creditor to follow the property of an insolvent corporation in the hands of a third party is not identical with such a proceeding to reach property of an insolvent individual fraudulently conveyed. The authorities clearly maintain a distinction. The quotation in the opinion from 10 Cyc. 1265, which was prepared by Seymour D. Thompson, author of Thompson on Corporations, we think states the law correctly as gathered from the eases. In Clapp v. Peterson, 104 Ill. 26, 31, the corporation had bought in its own stock, giving in exchange therefor certain city lots, and the creditor, after the judgment obtained and execution returned nulla bona,
Motion for rehearing is.denied.
Affirmed: Behearing Denied.