Bilby v. Morton
Citation | 247 P. 384,119 Okla. 15,1925 OK 360 |
Decision Date | 12 May 1925 |
Docket Number | Case Number: 14751 |
Parties | BILBY, Adm'r, et al. v. MORTON et al. |
Court | Supreme Court of Oklahoma |
¶0 1. Limitation of Actions--Action for Fraud--Time for Discovery of Fraud--Question of Fact.
The question as to when fraud is discovered, or could, with reasonable diligence, have been discovered, under the third subdivision of section 185, Comp. St. 1921, is one of fact to be determined from the relation of the parties the nature of the acts involved, and all the facts and circumstances of the particular case.
2. Corporations -- Stockholders' Action -- Laches as Defense.
Laches is a defense only when the stockholder, with full knowledge of the facts, has delayed an unreasonable length of time in bringing his action. These two elements, knowledge and delay, are the essential elements of the defense. Until the stockholder has full and complete knowledge of all the essential facts which would be likely to induce him to institute the action, the beginning of time from which laches will run cannot be said to commence. Endicott v. Marvel, 81 N. J. Eq. 378.
3. Same--Judgment--Res Judicata--Former Adjudication Between Corporation and Officers.
The matters and facts adjudicated between a corporation and its officers as codefendants in a creditor's suit to discover property belonging to the corporation, but held by the officers in their individual names, are res adjudicata between said corporation and said officers in an action on behalf of the corporation, by a minority stockholder, and on behalf of himself, asking for an accounting, the appointment of a receiver, and the liquidation of the corporation.
4. Same--Stockholder's Action for Accounting and Liquidation-- Receivership.
In an action for an accounting and for liquidation of the inactive corporation by a minority stockholder on behalf of said corporation and on behalf of himself against defrauding officials of said corporation, it is proper for the court to appoint a receiver, under article 19, chap. 3. Comp. St. 1921, to take possession of the affairs of the said corporation, where the evidence shows mismanagement and fraud on the part of the officers.
Commissioners' Opinion, Division No. 3.
Error from District Court, Muskogee County; Guy F. Nelson, Judge.
Action by John Morton, a minority stockholder, on behalf of the Indian Land & Trust Company, a corporation, and on behalf of himself, against N. V. Bilby, as administrator of the estate of John S. Bilby, deceased, N. V. Bilby and R. I. Bilby, for an accounting as officers of the Indian Land & Trust Company, a corporation, and for liquidation of said corporation. Judgment for plaintiffs, and defendants appeal. Affirmed.
N. A. Gibson, J. L. Hull, and T. L. Gibson, for plaintiffs in error.
W. W. Noffsinger and A. L. Harris, for defendants in error.
¶1 This case was decided by this court in an opinion by Commissioner Threadgill, filed May 12, 1925. On September 22, 1925, the opinion was withdrawn, and on October 27th the cause was submitted to the court on oral argument.
¶2 After a full review of the case and the authorities submitted thereon, the former opinion filed in this court May 12, 1925, is readopted and ordered refiled:
¶3 Opinion by THREADGILL, C. This action was commenced October 24, 1919, by John Morton on behalf of the Indian Land & Trust Company, a corporation, and on behalf of himself, a minority stockholder, as plaintiffs, against John S. Bilby, N. V. Bilby and R. I. Bilby, as defendants, for an accounting of the Bilbys as the officers of the corporation and liquidation of the same. While the action was pending John S. Bilby died and the action against him was revived in the name of N. V. Bilby, as administrator of his estate, and on December 15, 1920, plaintiffs filed their second amended petition, in which they stated, in substance, that the Indian Land & Trust Company was a corporation, organized November 20, 1901, under the laws in force in the Indian Territory, with its principal place of business in Muskogee; that the Bilbys had been the officers of the company since 1902, and owned two-thirds of the stock; that John Morton became a stockholder about January 1, 1904; that said John Morton's residence was in St. Louis until 1905, when he moved to Atlanta, Ga., where he has resided since that time; that besides paying for his stock in cash he had furnished the said company from $ 40,000 to $ 50,000 as his part of the operating expenses; that the officers of the company had used the money of the company in buying and leasing lands, and had taken the title in their individual names and had used the same for their own benefit instead of the use and benefit of the company, and by their mismanagement of the company and misappropriation of its funds, had caused it to be insolvent; that they had failed to keep books for the company, and plaintiff had not been able to determine what lands were bought and leased with the company's money till a suit of discovery was had by R. L. Owen in 1917, wherein it was revealed that the lands described in said action and in this action were lands belonging to said company; that the said company is mismanaged by its said officers and has not been a going concern for a long time, and a receiver should be appointed to wind up its business and distribute its assets. The corporate existence and officers of the company were admitted and the issues joined on the other facts stated by the answers of the Bilbys and the answer of the company by the Bilbys as its officers. The cause was tried to the court and the following judgment was rendered:
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