Whitney v. Hazzard

Citations

• 18 S.D. 490
• 101 N.W. 346
• 1904 S.D. LEXIS 87

Syllabus

<p>1. An independent action in equity to set aside a decree foreclosing a mortgage on property of a corporation will lie wbere plaintiffs were not parties to the foreclosure suit, being stockholders of the corporation, and the decree therein was obtained by the fraudulent collusion of the corporation’s president and the mortgagee, and plaintiffs’ motion in the foreclosure suit to set aside the decree therein was defeated by the fraudulent and untruthful statements of the mortgagee.</p> <p>2. The right of stockholders to maintain an action to set aside a decree, obtained by fraud, foreclosing a mortgage on property of the corporation, is not defeated by their failure to appeal from an order denying their motion in the foreclosure suit to set aside su'ch decree, they not having, till after the time for appeal, obtained the evidence to disprove the false and fraudulent statements of the mortgagee by which he defeated their motion.</p> <p>3. Stockholders of a corporation are not guilty of laches defeating their right to maintain an action to set aside a decree foreclosing a mortgage on the property of the corporation, which decree was obtained by the fraudulent collusion of the president of the corporation and the mortgagee, where they resided in a distant state, and had no notice for three years that the decree was entered, when they made a motion to set it aside, which was defeated by the false and fraudulent statements of the mortgagee, and did not obtain the evidence to disprove such statements till two years later, when they commenced the action.</p> <p>4. Stockholders of a corporation may maintain an action in their own names to set aside a decree, obtained by fraud, foreclosing a mortgage on the property of the corporation, where they applied to the managing officers of the corporation to bring the action, and they refused to do so.</p>