Tacoma Ledger Co. v. Western Home Building Ass'n

Citations

• 37 Wash. 467
• 79 P. 992
• 1905 Wash. LEXIS 755

Syllabus

<p>Corporations — Fraudulent Conveyances — Selling Out to Another Corporation. The assets of an insolvent corporation being a trust fund for the benefit of creditors, one corporation cannot dispose of all its stock, assets and business to another corporation, itself ceasing to do business, and neither corporation making provision for the payment of the debts of the selling corporation.</p> <p>Same — Dividing Capital Stock Among Stockholders — Assets Sold to Another Corporation. An arrangement whereby all the property and business of a corporation is to he sold and turned over to another corporation in consideration of shares of the capital stock of the purchasing corporation, issued to and for the benefit of the stockholders in the selling corporation, which agreed to cease to do business, is in violation of Bal. Code, § 4265, making it unlawful for the trustees to divide, withe raw, or in any manner pay to stockholders any part of the ca pital stock of a corporation, and is fraudulent as to creditors.</p> <p>Same — Boata Pide Puechaseb — Notice oe Debts. In such a ease if the selling corporation was in failing circun stances at the time of the transfer, the fact that the purchaser w¡ s unaware of the indebtedness is immaterial.</p>