Bilby v. Morton

Citation247 P. 384,119 Okla. 15,1925 OK 360
Decision Date12 May 1925
Docket NumberCase Number: 14751
PartiesBILBY, Adm'r, et al. v. MORTON et al.
CourtSupreme Court of Oklahoma
Syllabus

¶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.

PER CURIAM.

¶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:

"Now on this 25th day of September, 1923, the court of its own motion hereby vacates and sets aside its order made herein on the 22nd day of September, 1923, on account of errors of the court made at said time in making said order and this cause coming on for further hearing upon the report of the referee filed herein on the 12th day of June, 1923, and the exceptions thereto by plaintiff and defendant, and the exceptions of the defendant are hereby sustained, to which the plaintiff excepts and the said report is hereby disapproved.
"The cause coming on for further hearing upon the pleadings, and the evidence taken prior to the appointment of a referee herein, and the evidence taken before said referee, and the report of said referee, defendants excepting to a consideration of the evidence taken before said referee, the plaintiff and defendants appearing by their respective counsel, and the court finds that the Indian Land & Trust Company is the owner of the equitable title to lands described in plaintiff's petition and hereinafter described, and the legal title to part of said lands is in the name of N. V. Bilby, and the remaining lands in the name of John S. Bilby, now deceased, as well as other property and assets, real and personal, all of which is in the possession of N. V. Bilby as administrator of the estate of John S. Bilby, deceased, and N. V. Bilby individually.
"That certain equities may exist between the said defendants, N. V. Bilby and the estate of John S. Bilby, deceased, on the one hand and the Indian Land & Trust Company on the other as to the interest which each may have in said lands, which said interest and equities can only be determined by an accounting had between said N. V. Bilby and the estate of John S. Bilby, deceased, and the Indian Land & Trust Company.
"That the said lands above referred to are described as follows: (Same as in petition, omitted here.)
"And it further appearing to the court that there is in the possession of the defendants, N. V. Bilby, administrator of the estate of John S. Bilby, deceased, and N. V. Bilby, individually, all of the property and assets of the Indian Land & Trust Company, and by virtue of R. I. Bilby and N. V. Bilby being officers of said corporation, are keeping and holding all of the assets of said Indian Land & Trust Company, and using the same for their own personal use and benefit and not for the benefit of the corporation, and refusing to account and settle up the affairs of said corporation, and are in full control of the Indian Land & Trust Company and appear in this action for the Indian Land & Trust Company, that a receiver should be appointed to take charge of all the books, papers, moneys, assets, personal property, real estate, and handle the affairs of said corporation. To each and every of such findings, the defendants and each of them except.
"The court further finds that a motion for new trial, filed by the defendants herein on June 14, 1921, should be overruled.
"It is therefore considered, ordered and adjudged by the court, that the report of the referee, James W. Cosgrove, filed on the 12th day of June, 1923, be, by the court disapproved.
"And it is further ordered and adjudged by the court that the motion for new trial, filed herein by the defendants, on the 14th day of June, 1923, be overruled, to which the defendants except and give notice of appeal in open court, and ask that the same be spread on the minutes and records of the court.
"It is further considered, ordered, adjudged and decreed, that the Indian Land & Trust Company, a corporation, be and it is hereby declared to be the owner of the equitable title in and to the following described real estate, heretofore described, subject to such equities as may exist between the parties as may be determined by an accounting. To all of which each of the defendants except.
"It is further ordered, and adjudged by the court, that Thomas Anglin of Holdenville, Hughes county, Okla., be and he is hereby appointed receiver of said defendant, the Indian Land & Trust Company, and hereby ordered to immediately take into his possession and under his control all the property and assets, real and personal, books, papers, and all evidence of indebtedness to the Indian Land & Trust Company, within the State of Oklahoma, and to collect, hold and
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7 cases
  • Resolution Trust Corp. v. Grant
    • United States
    • Supreme Court of Oklahoma
    • June 27, 1995
    ...... 10 .         Resolution Trust relies on Bilby v. Morton, 119 Okla. 15, 247 P. 384, 386-87 (1926) for application of the doctrine of adverse domination. 11 In Bilby, a minority stockholder ......
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    ......Bank v. Abercrombie, 211 Mass. 252, 97 N.E. 897 (1912); Ventress v. Wallace, 111 Miss. 357, 71 So. 636 (1916); Bilby v. Morton, 119 Okla. 15, 247 P. 384 (1925); Smith v. Lyle, 59 S.D. 534, 241 N.W. 512 (1932); Allen v. Wilkerson, 396 S.W.2d 493 (Tex.Ct.App.1965); ......
  • Skirvin v. Coyle
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    • Supreme Court of Oklahoma
    • May 16, 1939
    ......W. 836, 105 S. W. 851; Id., 107 Tex. 1, 106 S. W. 326; Palmer et al. v. Texas et al. 212 11. S. 118; Baker v. Allen (Mass.) 197 N. E. 521; Bilby" v. Morton, 119 Okla. 15, 247 P. 384: Buckley v. Anderson. 137 Ala. 325, 34 So. 238: Exchange Bank v. Bailey, 29 Okla. 246, 116 P. 812.        \xC2"......
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