Union Trust Co. v. Amery

Citations

• 67 Wash. 1
• 120 P. 539
• 1912 Wash. LEXIS 1112

Syllabus

<p>Limitation of Actions — Relief on Ground of Fraud — Corporations — Reduction of Capital Stock. An action by a trustee in bankruptcy to recover the sum paid to the bankrupt’s president on a sale of its capital stock, thereby diminishing the capital stock of the corporation, is one for. relief upon the ground of fraud, and is not barred until the lapse of three years after the cause of action accrues, as provided in Rem. & Bal. Code, §159, subd. 4; in view of Id. §§ 3697, and 3704-3706, making it unlawful to make a dividend or reduce the capital stock of a corporation except in the manner provided.</p> <p>Bankruptcy — Transfers — Action by Trustee — Corporations — . Capital Stock — Unlawful Reduction — Fraud — Subsequent Creditors. Where a corporation, before bankruptcy, unlawfully reduced its capital stock by purchasing the stock of its president, the trustee in bankruptcy may maintain an action to recover the money paid without alleging the existence of creditors at the time of the unlawful sale; since subsequent creditors are equally entitled to redress.</p> <p>Bankruptcy — Fraudulent Transactions — Action by Trustee— Statutes. The bankruptcy act does not require that creditors should first acquire a lien before the trustee can sue to set aside an unlawful transaction in fraud of the rights of creditors.</p>