First National Bank v. Armstrong

HOUSER, J.

Defendants appeal from a judgment rendered against them in an action wherein they were charged with liability as stockholders of a corporation.

It appears that the corporation of which defendants were stockholders was indebted to the plaintiff in approximately the sum of $90,000, and that said corporation, together with several other corporations, were being “merged” into a new corporation by a procedure which included the taking over by the new corporation of the assets of each of the old

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corporations and the assumption by the new corporation of the liabilities of each of the old corporations; to be followed by an issuance of a certificate of stock by the new corporation to each of the old corporations in proper proportionate amounts. The plan of consolidation also included the purchase for cash of additional stock in the new corporation by each of the old corporations. To that end, the corporation of which the defendants were stockholders made arrangements with the plaintiff to borrow money from it with which to purchase stock in the new corporation amounting to the sum of $68,000. In the late afternoon of the same day on which the $68,000 was paid by the plaintiff on behalf of the old corporation for the additional stock purchased by it, the indebtedness of $90,000 theretofore owed by it to the plaintiff was paid by the new corporation.

For a reversal of the judgment, it is first urged by appellants that since as to them (as stockholders), at the time the action was commenced, the statute of limitations had run on the $90,000 indebtedness owed by the old corporation to the plaintiff, for the reason that the entire transaction hereinbefore outlined amounted merely to a discharge in part of that indebtedness and a renewal thereof as to the balance of such obligation, the statute also had run as against the latter debt.

It is a rule of law, established by the weight of authority, that the benefits which may result to a defendant from the provisions of statutes of limitations are available only by means of an affirmative defense interposed by him; and that, especially when dependent upon facts not appearing in the complaint or introduced in evidence by the plaintiff, the burden of establishing the facts constituting such a defense rests on the defendant.