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Keywords

statutetrustcorporationgood faith
statutetrustcorporationgood faith

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Sterrett v. Stoddard Lumber Co., 150 Or. 491, 46 P.2d 1023

Facts

The Stoddard Lumber Company, an Oregon corporation, sold lumber to the C. C. Woodall Company, a Washington corporation, and received payments of $450 after Woodall became insolvent. The receiver, Floyd B. Sterrett, claimed these payments were preferences under the Washington trust fund doctrine, which states that payments made by an insolvent corporation to a creditor are recoverable. However, the payments were made more than four months before the receiver was appointed, and there was no evidence that the Stoddard Lumber Company knew of Woodall's insolvency at the time of the payments.

The Stoddard Lumber Company, an Oregon corporation, sold lumber to the C. C. Woodall Company, a Washington corporation, and received payments of $450 after Woodall became insolvent. The receiver, Floyd B. Sterrett, claimed these payments were preferences under the Washington trust fund doctrine, which states that payments made by an insolvent corporation to a creditor are recoverable. However, the payments were made more than four months before the receiver was appointed, and there was no evidence that the Stoddard Lumber Company knew of Woodall's insolvency at the time of the payments.

Issue

Whether the receiver can recover payments made by an insolvent corporation to a creditor under the Washington trust fund doctrine, given that the payments were made more than four months prior to the appointment of the receiver.

Whether the receiver can recover payments made by an insolvent corporation to a creditor under the Washington trust fund doctrine, given that the payments were made more than four months prior to the appointment of the receiver.

Rule

Under Washington law, a receiver can recover payments made by an insolvent corporation to a creditor if those payments were made within four months of the filing for the appointment of a receiver, and if the creditor had knowledge or reason to believe the corporation was insolvent.

Under Washington law, a receiver can recover payments made by an insolvent corporation to a creditor if those payments were made within four months of the filing for the appointment of a receiver, and if the creditor had knowledge or reason to believe the corporation was insolvent.

Analysis

The court found that the payments were made more than four months before the receiver was appointed, and thus the receiver could not recover them under the Washington statute. Additionally, the court determined that the transactions were governed by Oregon law, which did not provide for the recovery of such payments when made in good faith without knowledge of insolvency.

The court found that the payments were made more than four months before the receiver was appointed, and thus the receiver could not recover them under the Washington statute. Additionally, the court determined that the transactions were governed by Oregon law, which did not provide for the recovery of such payments when made in good faith without knowledge of insolvency.

Conclusion

The court affirmed the judgment in favor of the Stoddard Lumber Company, concluding that the receiver had no right to recover the payments made by the C. C. Woodall Company.

The court affirmed the judgment in favor of the Stoddard Lumber Company, concluding that the receiver had no right to recover the payments made by the C. C. Woodall Company.

Who won?

Stoddard Lumber Company prevailed because the court found that the payments were made in good faith and that the receiver lacked the authority to recover them under the applicable law.

Stoddard Lumber Company prevailed because the court found that the payments were made in good faith and that the receiver lacked the authority to recover them under the applicable law.

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