Cohen v. George

Beck, P. J. (After stating the foregoing facts.) We are of the opinion that the court did not err in sustaining the demurrer to this petition. As was pointed out in the demurrer, there is no allegation showing that the creditors for whose benefit the trustee in bankruptcy instituted these proceedings were creditors at the time the bankrupt corporation purchased from George the 160 shares of capital stock and reconveyed to him the business which he, at the time of organization, had conveyed to the corporation in payment for the stock. This transaction took place in 1909. There is no allegation that this act was done in contemplation of insolvency or for the purpose of defrauding the creditors. The business of the corporation was continued for a long period, some eight or nine years. And then, even if the retransfer of the business to George and the transfer by him to the corporation of his shares of stock could be regarded as fraudulent as against the then creditors of the corporation, and as void under the trust-fund doctrine which obtains in this State, it was not void as to those who subsequently became creditors, unless the defrauding of those who might become creditors was an end purposed by the parties to the transaction. See, in this connection, Almand v. Thomas, 148 Ga. 369 (96 S. E. 962). [703] Moreover, if the creditors for whose benefit this proceeding was instituted had been creditors at the time of the transfer, their right of action would have been barred after the lapse of the statutory period, unless there had been some concealment of the transaction, or they had remained in ignorance of it through no negligence on their part. The trustee, relatively to the interposition of the bar of the statute of limitations, stands in no better shoes than the bankrupt; and after four years had elapsed from the time of the transaction complained of, the corporation could not have maintained a suit upon the'ground that it had no right to reconvey the business originally conveyed to it by George in consideration of his retransferring to the corporation his 160 shares of stock. Judgment affirmed. All the Justices concur.