Riley

Here we are asked to decide whether appellants, as sole shareholders of a dissolved Texas corporation and assignees of its assets, may prosecute an action asserting injuries to and fraud upon the corporation after the three-year postdissolution survival period provided by Texas law. We hold they may not and affirm the judgment.

*874 James C. Riley, Jr., and James C. Riley III (Rileys), Texas residents, appeal from judgment on the pleadings based upon the trial court’s holding that Rileys’ causes of action are barred because, pursuant to Texas common law and article 7.12 of the Texas Business Corporations Act, claims for damages to dissolved Texas corporations must be brought within three years of dissolution.

Facts

April 20, 1978, a day prior to voluntary dissolution, Mindevco, Inc., a Texas corporation, assigned to Rileys, Mindevco’s sole shareholders, all its tangible and intangible assets in exchange for cancellation or redemption of all outstanding capital stock pursuant to provisions of a plan of complete liquidation. December 19, 1983, Rileys filed a complaint in the San Luis Obispo County Superior Court for fraud, breach of fiduciary duty, restraint of sale or…

I respectfully dissent.

I agree with the majority that Texas law should be applied in this case. I also agree that our position is a unique if not an anomalous one. It is difficult *884 enough deciding cases based on California law, but the majority suggests we are California judges deciding how Texas judges, relying on Illinois and Texas law would decide this case. Perhaps we are just California judges deciding a case based on Texas law. Under either of the above approaches, I would reach a different result.

I would apply equitable principles to the survival statute here, and I think Texas courts would do the same. Prior to the enactment of article 7.12 of the Texas Business Corporations Act, the equitable “trust fund theory” permitted creditors of a dissolved corporation to pursue the assets of that corporation which were held by third parties, including corporate officers, directors, and shareholders. The dissolution of the corporation did not therefore bar all suits involving that corporation. In Hunter v. Fort Worth Capital Corp. (Tex. 1981) 620 S.W.2d 547, 551 (dis. opn. of Spears, J.) the Texas Supreme Court held article 7.12 restricted the use of the trust fund theory to…

Here we are asked to decide whether appellants, as sole shareholders of a dissolved Texas corporation and assignees of its assets, may prosecute an action asserting injuries to and fraud upon the corporation after the three-year postdissolution survival period provided by Texas law. We hold they may not and affirm the judgment.

James C. Riley, Jr., and James C. Riley III (Rileys), Texas residents, appeal from judgment on the pleadings based upon the trial court's holding that Rileys' causes of action are barred because, pursuant to Texas common law and article 7.12 of the Texas Business Corporations Act, claims for damages to dissolved Texas corporations must be brought within three years of dissolution.

April 20, 1978, a day prior to voluntary dissolution, Mindevco, Inc., a Texas corporation, assigned to Rileys, Mindevco's sole shareholders, all its tangible and intangible assets in exchange for cancellation or redemption of all outstanding capital stock pursuant to provisions of a plan of complete liquidation. December 19, 1983, Rileys filed a complaint in the San Luis Obispo County Superior Court for fraud, breach of fiduciary duty, restraint of sale or…