Fogg v. St. Louis, H. & K.R. Co.

• Decision Date: 24 September 1883
• Citation: 17 F. 871
• Court: U.S. District Court — Eastern District of Missouri
• Parties: FOGG v. ST. LOUIS, H. & K.R. CO. and another. [1]

17 F. 871

FOGG v. ST. LOUIS, H. & K.R. CO. and another. ^[1]

United States Circuit Court, E.D. Missouri.

September 24, 1883

George D. Reynolds and James Carr, for plaintiff.

Smith &amp Harrison, for defendants.

TREAT J.

The only facts disclosed which are essential to the present inquiry are that prior to May 4, 1870, the plaintiff's demand against the second corporation named was in existence and could have been pursued and enforced; that no suit was brought on said demand until September 21, 1881; that judgment was recovered in said suit on said demand at law on October 3, 1882; that execution thereon was duly issued and return of nulla bona made, March 19, 1883; that on March 4 1873, the last-named corporation, to-wit, the St. Louis &amp Keokuk Railroad Company, conveyed to the other defendant corporation all its property and franchises, the latter assuming all the debts, liabilities, and obligations theretofore made or incurred by or legally imposed upon the said St. Louis & Keokuk Railroad Company, for right of way, station grounds, ties, or bridging, and other good and valuable considerations in said conveyance mentioned; that under said conveyance the first-named corporation entered into possession without knowledge of plaintiff's claim, which is alleged to be on a construction account. This suit was commenced May 3, 1883.

There are many other averments and denials looking to possible aspects of the controversy which need not be now noticed. It clearly appears that the last-named corporation conveyed to the former all of its assets and franchises (except its franchise of corporate existence) on March 4, 1873, on the terms stated, and that the latter took possession accordingly, and has enjoyed the same ever since. Under the admitted facts is seems that the grantee assumed all the liabilities of the grantor; but, if that be not so, by the express terms of the conveyance there was devolved on it, in equity, the payment of plaintiff's demand, when established. When one corporation conveys to another all of its assets and franchises, and the latter becomes thereby substantially, if not formally, the legal or equitable successor of the former, it must be held to take cum onere. A full consideration of the questions involved in said conveyance might show that it was ultra vires, (Thomas v. Railroad Co. 101 U.S. 71;) but if so, it has been executed, and, so far as the parties thereto are concerned, their respective obligations thereunder, as between themselves, will be permitted to stand. As to third persons, creditors of the grantor, said conveyance may be fraudulent and void. However that may be, it still remains to consider whether, under the facts and circumstances stated, the plaintiff has lost his right to pursue the grantee, through laches or lapse of time.

The general rule is not disputed that courts of equity will follow statutes of limitations in other than exceptional cases, and that creditors at large must reduce their claims to judgment, and have executions issued thereon and returned nulla bona, before they have any standing in equity. This follows from the principle recognized by the statutes of the United States,...