Daily capital journal. (Salem, Oregon) 1903-1919, 1911-09-26

associates, with intent TO cheat and
defraud the plaintiffs, Withdrew SS2,-
900 Of the mortgages and securities
Of the company from the trust de-
posit and proceeded to swap these Sc
curities to stockholders and to Sc
eretly dispose of them, 50 that plain
tiffs could obtain no benefit from
said fund; and that they refuse to
give plaintiffs any information as to
how the assets have been disposed of,
and that they have chosen Miller as
trustee Of the company with the in
tent 20 keep secret and cover up
their past transactions.
By Secs. 674S, 6749, $3.50, L. o. L.,
savings and loan associations are re-
quired to deposit their mortgages
and securities either with the secre-
tary of state or with some duly char
tered trust company. as a trust fund,
for all the stockholders. aud such Sc
caIities can only be withdrawn for
the purpose Of foreclosure cr when
the same have been paid. The with
drawal Of them for any other pur-
pose constitutes a fraud IN law upon
the stockholders for which the law
will afford remedy, and every
stakeholder is entitled to require an
accounting; and If the proceeds Of
these unauthorized transfers by the
officers has impaired the trust fund
to their injury, they should be COM
PEELED to make good the deficit.
1t Is contended that plaintiffs
should first have sought redress
within the corporation and first
should have demanded that the trus-
tee should sue, but to this there are
two answers: Q) That where the
complaint charges, as in this case.
that the trustee is one of the con-
splrators and active in the conspir-
acy, an application to him is not re-
quired. ~ That there is no statute
in this state providing for the selec-
ton OF a trustee for the purpose of
winding up the affairs of a savings
and loan association. Chapter 3. l.
o. l.. Is a statute complete in itself
ana there Is no provision for the
winding up of this corporation by the
intervention Of trustee. Chapter /
OF Title "a, i. o. L., treats of cor
porations In general and Sec. 67O1 of
this title expressly confines the right
10 dissolve corporation by the Sc
lection of a trustee to wind up its af-
tairs to such corporations as are or
ganized under the provisions of this
chapter. The defendant company
having been organized under the pro-
visions Of different chapter. cannot
claim the benefit of the provisions of
the preceding chapter. How far the
cholce OF Miller as trustee may oper-
ate as an equitable assignment for
the benefit of creditors and STOCK
holders, it is not now necessary IN
inquire 1t seems plain that he has
no legal status as trustee to wind nm
the affairs of this corporation.
While the complaint is badly
drawn and fails to state fully and
definitely many things which ought
to be so stated, we are of the opinion
that In the absence of demurrer or
other motion to make more definite
1t is sufficient to sustain a decree
Perhaps the plaintiffs would have
chosen the wiser course, had thew
acquiesced in the ruling of the cir
cut court and began a new suit
with a complaint more completely
ana artistically drawn. But. badly
drawn as 1t is, it states a cause of
SUIT In respect to the matters herein
indicated, and we. therefore adhere TO
our former opinion