Bank of California v. Puget Sound Loan, Trust & Banking Co.

Citations

• 20 Wash. 636
• 56 P. 395
• 1899 Wash. LEXIS 216

Syllabus

<p>INSOLVENT CORPORATIONS—FRAUDULENT PREFERENCE-CONSIDERATION FOR MORTGAGE - PRE-EXISTING DEBT - EQUITABLE ESTOPPEL - RECEIVERS.</p> <p>Creditors of a bank in the hands of a receiver who consent to the discharge of the receiver and the re-opening of the bank, under an arrangement whereby one of the creditors is to advanee money to the bank for the purpose of enabling it to resume business and partially pay outstanding claims, are estopped from claiming they had no notice of a mortgage for an antecedent indebtedness being given in consideration of such advance, when they have agreed to an extension of the time in which the bank might pay their claims, and have received dividends thereon out of the moneys so advanced; and they are also equitably estopped from setting up the insolvency of the bank at the time of the discharge of the receiver, for the purpose of showing that the giving of the said mortgage constituted a fraudulent preference.</p> <p>The subsequent insolvency of a corporation cannot be given in evidence for the purpose of affecting the validity of a prior instrument, which was valid at the time of its execution.</p> <p>Where general creditors have for more than a year acquiesced in an order of the court discharging a receiver and permitting an alleged insolvent bank to resume business, they cannot be heard to object that the receiver did not represent them at the hearing.</p>