Carstens & Earles v. Hofius

Citations

• 44 Wash. 456
• 87 P. 631
• 1906 Wash. LEXIS 857

Syllabus

<p>Corporations — Conveyances—Selling Out to Another Corporation — Creditors — Liability of Trustee of Selling Corporation. Where a corporation sells all of its assets to a corporation newly organized by part of the trustees, which assumed the old indebtedness, the balance of the consideration passing directly to the trustees and for their benefit, a trustee who participated therein and received benefits from the transaction is liable to the creditors of the corporation, under Bal. Code, § 4265.</p> <p>Same. The fact that the new corporation assumed the indebtedness of the other, does not relieve the trustee from liability to a creditor who had no notice of the transaction.</p> <p>Corporations — Sale of Assets to New Corporation — Rights of Creditors. Where a corporation is organized to take over the business and all the assets of another corporation, which it purchases, paying over the consideration directly to and for the benefit of the trustees, knowing that the selling corporation is unable to pay its creditors, the new corporation is liable for the debts of the other, although it is not alleged that it assumed to pay the same; since the assets were 'a trust fund for creditors, as to whom the transaction was fraudulent.</p>